Fiscal stimulus: Go for it

The credit crunch is not under control. Despite global efforts to recapitalise the financial system, credit is still in short supply and potential borrowers are afraid to take on new debts. Governments need to take more direct action to break the downward spiral – tax cuts and, in some countries, increased spending. Some of the current deleveraging is healthy – the elimination of the credit fat that made the financial sector flabby and houses look like money machines. A mild recession that helpe...