The Organization for Economic Co-operation and Development just cut its 2016 global growth forecast again and warned that new ideas and approaches are needed to get the world back on a stronger economic foundation. Monetary has been done to death, fiscal has been stuck in political impasse and structural reforms are unpopular because they require breaking up of status quo conglomerates and writing off bad debts (bad because they were recklessly lent and cannot be repaid).
Bottom line: financialization has milked the cow to the verge of demise, now it is time to stop focusing on extraction and start investing time and money in building back health in the herds. This means saving more and a focus on efficiency. And yes it means less short term spending and consumption while coffers are rebuilt. See: Act now or risk another deep downturn, OECD warns policymakers.
“Policymaking is at an important juncture. Without comprehensive, coherent and collective action, disappointing and sluggish growth will persist, making it increasingly difficult to make good on promises to current and future generations,” the OECD’s Chief Economist Catherine Mann said in a summary of the report. Here is a direct video link.
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