A few months ago the pro market OECD gave the thumbs up to austerity but now they are in retreat and yesterday said central banks must issue debt free electronic money to prevent slide into economic depression. http://www.guardian.co.uk/business/2010/sep/09/oecd-advice-to-g7
The OECD's caution came as the UK registered its worst-ever trade deficit in goods and services of £13.2bn and ratings agency Standard& Poor's said the coalition's austerity programme could trigger a wave of home repossessions.
The OECD added, however, that stronger action would be required if the slowdown reflected "longer-lasting forces bearing down on activity". In those circumstances, it said that central banks might need to carry out more quantitative easing and commit to rock-bottom rates for a longer period: "Where public finances permit, planned fiscal consolidation could be delayed."
OECD calls for more quantitative easing to you and I that means the central banks of nation states must issue new debt free money because recessions are caused principally by a reduction in the overall supply of money into the economy and since the banking crash that is exactly what has happened.
Any attempt by governments to pay down its debt significantly will also trigger recession. A combination of both leads to economic depression and that was the lethal cocktail of the 1930's.
Ultimately for any significant progress in economics our money supply has to be reformed and returned to the state as a principle economic programme for the benefit of all of us.
