UN says if the US fails to increase government spending, they risk a double-dip recession

The UN has seen the obvious economic weakness in the US, and Western Europe and has offered their prescription... more spending.  They call it fiscal stimulus, but it doesn't matter what its called, it is probably welcomed in Washington. 

They also want more cooperation on printing money.  In other words, everyone should print money everywhere.  No one should complain. 

The UN joins Krugman and other Keynesian economist in calling for additional spending to cure the vexing unemployment weakness.  This leads me to the obvious baffling question of if increased government spending is required to reduce unemployment, is there ever a time for reduced spending?  Via UN:
The cooperative spirit among major economies is waning, which has debilitated the effectiveness of responses to the crisis. Uncoordinated monetary responses, in particular, have become a source of turbulence and uncertainty in financial markets. The recovery may suffer further setbacks if some of the downside risks materialize, in which case a double-dip recession is looming for Europe, Japan and the United States. WESP 2011 says that in the short run more fiscal stimulus will be needed to reinvigorate the recovery, but that it will need to be better coordinated with monetary policies and reoriented to provide stronger support to employment generation and facilitate a sustainable rebalancing of the global economy. This cannot be done without better international policy coordination.

Among developed economies, the United States has been on the mend from its longest and deepest recession since World War II. Yet, the pace of recovery has been the weakest in the country’s postrecession experience. At 2.6 per cent in 2010, growth is expected to moderate further to 2.2 per cent in 2011 before improving slightly to 2.8 per cent in 2012, according to the report. This pace will not make much of a dent in unemployment rates, and recovering the jobs lost during the crisis would take at least another four years.

Comments

Popular posts from this blog

October retail sales come in strong, especially auto sales

Tea Party Buffalo Pictures

How to spot a fake Tea Partier