OECD: Delayed Spending Cuts and More Stimulus Money May Be Needed

The Organization for Economic Cooperation and Development (OECD) cautioned world economic leaders that they may have to forestall plans to reduce spending, and said central banks may have to provide more stimulus money if economies slow for an extended period of time.

Numbers released by the Paris-based think tank show that the global economic recovery may be stalling slightly, as planned growth in the second half of this year is less than expected.

“Annualized growth in [the Group of Seven's leading industrial nations] gross domestic product will slow to 1.4% in the third quarter and 1% in the final three months of the year,” the Wall Street Journal reports. “That follows expansions of 3.2% and 2.5% in the first and second quarters of 2010, respectively.”

“It is not yet clear whether the loss of momentum in the recovery is temporary … or whether it signals greater underlying weaknesses in private spending at a time when policy support is being removed,” the organization said.

Should the slow down persist, “additional monetary stimulus might be warranted,“ and ”where public finances permit, planned fiscal consolidation could be delayed.”

Still, according to the Associated Press’s account of the report, another global recession is not imminent. “It is unlikely that we are heading into another downturn,” it quoted chief OECD economist Pier Carlo Padoan as saying.

But as the AP reports, the recommendation that spending cuts be delayed “represents a shift from [the OECD's] view just a few months ago when it urged governments around the world to get a grip on ballooning budget deficits.”

The news comes after President Obama proposed an additional $50 billion in infrastructure spending this week.

Comments (25)

  • chuchu12
    Posted on September 13, 2010 at 1:14pm

    If this simple plan was enacted our economy would turn around on a dime and begin to recover.

    If congress and the president were to have a window period of 0% capital gains tax on any real estate purchased it would get the investors to let loose of some of the trillions of dollars they are sitting on and buy property which will create jobs.

    * This should only be allowed for properties bought from the day it is passed moving forward for a window period of 3 months or 6 months or whatever. We should then analyze it and adjust the window as necessary. It should not be used for properties already owned because that would flood the market, we want people to want to buy instead of sell to create demand again so that prices will stabilize and consumers will begin to have confidence in their homes and begin to spend again to support the economy and create jobs.

    * This should qualify for any buyer of any property whether it be an investment, owner occupied or commercial. The goal is to get the big investors with all their cash on the sidelines to start buying to stimulate the recovery and also to make it widespread so to have a quick effect. This will bring quick money into the treasury by quickly creating jobs and consumer confidence.

    * The new property purchased should have no restrictions on when you sell it, if sold in 1 day, 1 year 10 years or 100 years it should be exempt from capital gains tax. This will be the quickest way to incentivize buyers, remember this is just a window period and we can adjust the window anytime either to avoid over heating or lack of desired results.

    The largest commodity held by Americans is real estate and over the last 3 years as their home values dropped they lost confidence in their future. If home prices stabilize and slowly begin to increase again people will start regaining confidence, they will also hire builders, painters, landscapers, plumbers, Realtors, loan and mortgage officers etc. They will also spend on vacations, restaurants, new cars, etc. In my opinion, one mistake the current administration did was the cash for clunkers, why in the world would we incentivise people to put a monkey on their back in the form of a higher payment to purchase a depreciating asset when we could incentivise them to purchase property that typically can go up in value and then they would buy the car on their own along with other goods and services?

    Another great reason to put the 0% window on the cap gains is because for all practical purposes there is no cap gains tax being collected now anyway because nobody is selling at a profit so there is little to lose and much to gain.

    Also by doing this foreclosures will cease quickly and banks will begin lending again. Banks will realize that values have stabilized and not be so fearful of lending.

    Sure, this will probably help the professional investor but most importantly it will create jobs for the guy who has to put food on the table for his children. We need to get the big money that the investors have buried back into the system and real estate is the best way because it will create a snowball effect of jobs.

    Report Post »  
  • paulblack
    Posted on September 11, 2010 at 5:55am

    Hay can anybody hear me??????????????????????????????????, in order to revive the economy, yes you need some jobs, but guess what, if 25% of the population cannot qualify to buy a car, new furniture,a home, receive a credit card than sorry but the economy will not improve. A program for dept forgiveness has got to happen for the citizens of this country, NOT for the lenders, not for the big business, it must be for the people first. Someone can figure it out I sick of laying it out and you idiots aren’t listening.

    Report Post »  
    • paulblack
      Posted on September 11, 2010 at 6:09am

      Opps I meant credit reestablishment NOT DEBT FORGIVENESS, Fica, and exporian and what ever the other one is called need to be seriously looked at as well. people that are serious about a second chance can be offered a three month course, to reestablish their score, and test can determine their tier level, and it has to be done or we will all scurry around wondering what happened to this economy. Start with the three credit reporting agencies. Did you know many cash paying Americans have never been late on a bill but our credit agencies would report they are not trust worthy of a lone, simply because they don’t track rental payments and utility bills . Is that Constitutional ??? fix these things and watch the economy boom again.

      Report Post »  
  • The Bees
    Posted on September 9, 2010 at 11:03pm

    If these nut cases think the US citizen are going to pony up another 3/4 of a billion for another bail out they are off their rockers.

    How much LSD are these nut case politicians ingesting a day. Time to get these waste cases on some Thorazine. Double up their doses.

    November just can’t get here quick enough!

    Report Post » The Bees  
  • TwoMinuteMan
    Posted on September 9, 2010 at 6:39pm

    How about they spend all of the first 900B before they come back for more.

    Report Post » TwoMinuteMan  
  • missmarie
    Posted on September 9, 2010 at 5:26pm

    Here’s what I need – EVERYBODY TAKE YOU DARN HANDS OUT OF MY POCKETS! THEY ARE EMPTY ALREADY! (Sorry to yell, but this one really ticked me off!)

    Report Post » missmarie  
  • Skwerl
    Posted on September 9, 2010 at 3:53pm

    To quote Dr. Evil: How about ‘no’?

    Report Post »  
  • phoenixbetrayal
    Posted on September 9, 2010 at 2:14pm

    let’s just keep throwing “money” at the economy. that’ll fix everything. it’s all made up monopoly money at this point anyway. Dollars back by hope, change, and the dreams of the immigrants (that’d be everyone not full blooded native americans, for clarity)

    Report Post »  
  • gerrygrass
    Posted on September 9, 2010 at 1:23pm

    This is all part of the ‘one world government’. It’s all prophetic. This president, this administration, and this progressive movement is making it happen in front of us. And we can as a free people only do so much. When the ruling class no longer listens to its people, well you all think about it. History has provided the answers.

    Report Post »  
  • brinksmom
    Posted on September 9, 2010 at 12:49pm

    Don’t Feed the Trolls!

    Report Post »  
  • 2Smart2BaLib
    Posted on September 9, 2010 at 12:47pm

    I’d start budget cutting by eliminating the Department of Education, privatizing Social Security, securing our borders and deporting all illegal’s. I’d like all these things to happen immediately after voting out all incumbents this November.

    Report Post » 2Smart2BaLib  
    • GlennBeckIsADemagogue
      Posted on September 9, 2010 at 3:24pm

      Don’t stop at eliminating the Dept of Education. Close all the public schools, too. This country spends way too much money on giving away a free education to anyone and everyone. Better to let the private sector take over educating those in our great nation that can afford it. Then it could be more like the health care system we’ve lived and died with for so long.

      Report Post » GlennBeckIsADemagogue  
    • GlennBeckIsADemagogue
      Posted on September 9, 2010 at 3:28pm

      To freelancer: Just babbling. I know it was silly. It was kind of fun, though.

      Report Post » GlennBeckIsADemagogue  
    • FLALawMan
      Posted on September 9, 2010 at 5:25pm

      Does anyone even know why we have a Federal Department of Education, 50 state level departments of education, and countless county and city boards of education? It would seem we are spending far too much money having a few thousand people doing the same thing and getting in the way.

      Report Post »  
  • Corinthian in TN
    Posted on September 9, 2010 at 12:40pm

    Until people’s hearts change, and the individual stops thinking about NOW at the EXPENSE of tomarrow, nothing will change. This ties into Glenn’s 8-28 message…. when we get our Values and Principles right, everything else will follow suit.

    Report Post » Corinthian in TN  
  • Resolved
    Posted on September 9, 2010 at 12:25pm

    I still think we’d be better off if we did the common sense thing. If your household is in mountains of debt, you don’t go deeper in debt to solve the problem, you cut spending where you can. The free market system is brilliant, and is more than capable of correcting itself. Just my opinion however.

    Report Post » Resolved  
  • notimeforthis
    Posted on September 9, 2010 at 12:17pm

    Who is the Organization for Economic Cooperation and Development. What are Pier Carlo Padoan credentials?

    Report Post »  
  • GlennBeckIsADemagogue
    Posted on September 9, 2010 at 12:16pm

    If Glenn Beck reported $32 million in income last year, surely he can solve the planet’s economic woes.

    Report Post » GlennBeckIsADemagogue  
    • Freelancer
      Posted on September 9, 2010 at 12:28pm

      Dude, are you just babbling to yourself or are you forgetting to switch names before you post comments?

      Report Post » Freelancer  
    • Les Panek
      Posted on September 9, 2010 at 1:09pm

      I appreciate a leftist posting to remind us of the mentality we are dealing with. Thanks for not providing any intelligence, meaningful debate or insight whatsoever. Your indoctrinators would be proud.

      Report Post »  
    • Beckofile
      Posted on September 9, 2010 at 1:36pm

      No more money. It is the same as me realizing I can’t pay my 2nd mortgage so I will take out a 3rd mortgage to pay the 1st and 2nd. This is stupid and only a politician/keynesian economist could believe these lies. How about limited government and leave the folks with the fruits of their own industry. It’s funny to watch and see that Freedom got us here and the more we decrease it the more the wheels fall off the country. Remember in the 1930′s an ounce of gold would buy you a finely taylored suit and an ounce of gold will do that today. 20 paper American pesos back then would buy you a nice suit but what does 20 paper dollars buy you today????? They have stolen your wealth without you barely knowing it:)

      Report Post » Beckofile  
    • Hugh Williams
      Posted on September 9, 2010 at 1:59pm

      Do you ever criticize George Soros for making money?

      Report Post » Hugh Williams  
  • GlennBeckIsADemagogue
    Posted on September 9, 2010 at 12:14pm

    No doubt about it. The global economy would be in better shape if Glenn Beck or Sarah Palin was president. just kidding, of course

    Report Post » GlennBeckIsADemagogue  
    • gerrygrass
      Posted on September 9, 2010 at 1:28pm

      No, the world economy would not be better. What would be better would be the United States and their people and businesses. Definitely without a second thought, so would be our economy.

      Report Post »  
  • GlennBeckIsADemagogue
    Posted on September 9, 2010 at 12:12pm

    If Glenn Beck or Sarah Palin was president, I’m sure none of this would have ever happened.

    Report Post » GlennBeckIsADemagogue  

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