Go for it

10 November 2008 By Edward Hadas Follow @edwardhadas

The intensifying crunch threatens to turn a healthy rebalancing into a huge slump. Bank bailouts haven t slowed down the contagion. Government should move with quick coordinated tax cuts and in some countries increased spending. The deficits are risky, but inaction is riskier.

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The Group of 20 nations said on November 10 that it was prepared to act urgently to bolster growth and called on governments to cut interest rates and raise spending.

The Chinese government authorised a Rmb4 trillion (about $600m) stimulus package for investment on infrastructure and social welfare over the next two years on November 10. It said the spending plan reflected a decision to adopt an active fiscal policy to deal with the global financial crisis.

US Presidentelect Barak Obama emphasised the urgency of a fiscal stimulus package and longterm public investments in a radio interview on November 9. Obama intends to push a comprehensive programme of social and economic reform, according to Rahm Emanuel, the next White House chief of staff.

Gordon Brown called on governments around the world to coordinate tax and spending policies to shore up a slowing world economy on November 10.

Germany's cabinet agreed on a E50bn fiscal stimulus package on November 5.

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