Mervyn King: time 'running out' to solve world economy crisis

[FarCenter]

Despite record low interest rates, printing new money and other emergency measures, governments had not yet addressed the underlying problem of overspending that was at the root of the financial crisis, Sir Mervyn King warned. The consequences threatened to “inflict pain on everyone”, he said.

In a sobering assessment of the world economy, Sir Mervyn warned that even if world leaders managed to agree on emergency moves to support the banking system and debt-stricken economies such as Greece, they would still not have averted the threat to global stability.

Unless overspending by Western economies was curbed it would bring about an ever-larger debt crisis that would mean much lower long-term growth rates, he said.

Worse, he suggested, some of the measures being deployed to counter the short-term situation could actually exacerbate fundamental economic problems, worsening the debt crisis and leaving taxpayers footing an even larger bill.

Sir Mervyn delivered his gloomy verdict as official figures showed that inflation surged to 5.2 per cent last month, squeezing living standards and eroding the value of savings and pensions. Inflation was “at or close to” its peak and would soon start to fall back towards the Bank’s two per cent target, he said.

http://www.telegraph.co.uk/finance/financialcrisis/8835221/Mervyn-King-time-running-out-to-solve-world-economy-crisis.html

[paulk]

1. sounds like he's pushing for more austerity measures

what's the background on this guy?

[FarCenter]

2. Sir Mervyn Allister King is Governor of the Bank of England & Chair of the Monetary Policy Committee

He's the British Ben Bernanke.

http://en.wikipedia.org/wiki/Mervyn_King_(economist)

[paulk]

3. hmmm...

"King has consistently supported drastic cuts in public spending, and has been criticised for publicly airing such support.<30><31> In November 2009, he told MPs that the then Labour government's intention of halving the deficit over the next five years was insufficient;<32> in April 2010, just before that year's general election, he predicted that the cuts he viewed as necessary would be so severe, and thus so unpopular, that party which won the election—and which would therefore be responsible for instituting the cuts—would "be out of power for a generation";<33> and in May 2010, just days after the Coalition government was formed,<34> King said he had spoken to Chancellor George Osborne and supported his plans to cut spending by a further £6bn within the 2010–11 fiscal year.<32> The Liberal Democrats did not need to be talked around to agreeing to the severity of the cuts.<35>"

[abelenkpe]

4. Austerity

That should go over well. Nothing like continuing the downward spiral to really please a crowd.

[JDPriestly]

5. Push 'em down, 'n then kick 'em when they're down.

That sees to be King's philosophy.

Better: Tax the 1% to the maximum to pay off the debts that King believes are too high. Maybe then the economy will improve.

[PETRUS]

6. That's ok palliative care.

A cure would be better, followed by a little preventive medicine. Maybe a healthy diet and lifestyle, so to speak...