The Need From IMF Financing is BAAAACK!

''..A country with fiscal credibility can promise virtue in the future in exchange for fiscal laxity now. That permits it to escape the painful consequences of the paradox of thrift: that an ex-ante desire to increase the national saving rate (say though fiscal tightening or a shift upwards in the private propensity to save) may, at least temporarily, depress economic activity to such an extent that ex-post savings will not rise very much if at all. For the US, I see no alternative to a painful restoration of external balance through a higher national saving rate..''
''.. IMF needs an increase in its resources of about $2.25 trillion. Global capital markets are likely to remain impaired for years to come, not just for developing countries and emerging markets, but also for a large number of supposedly advance industrial countries. The need from IMF financing is BAAAAACK!
W.Buiter, Financial Times
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