Where belt tightening gets you: IMF cries uncle

So the IMF - scourge of the third world - transferred its sorcery to the advanced coutnries of Europe - with the entire Republican Party singing two part harmony.  Here's where it got Europe.  Thanks to a Democratic President and Senate majority we have actually been on the up-slope, however unsatisfying the grade- gwc

The IMF Game-Changer - FT Alphaville by Izabella Kaminska

Christine Lagarde has urged countries to put a brake on austerity measures amid signs that the IMF is becoming increasingly concerned about the impact of government cutbacks on growth. Ms Lagarde, IMF managing director, cautioned against countries front-loading spending cuts and tax increases. “It’s sometimes better to have a bit more time,” she said at the annual meetings of the IMF and the World Bank on Thursday.

The fund warned earlier this week that governments around the world had systematically underestimated the damage done to growth by austerity.

That’s from Thursday’s front page story on FT.com. To say it’s a big deal is possibly understating matters. Though, obviously, we had inklings that this sort of thing was to come as soon as the IMF released its latest World Economic Outlook this Tuesday, which highlighted the organisation’s disappointment with the fiscal multiplier effect being larger than previously anticipated.