IMF Chief Says Nations in 'Depression'

[Joanne98]

International Monetary Fund chief Dominique Strauss-Kahn said the world's advanced economies -- the U.S., Western Europe and Japan -- are "already in depression," and that the IMF could slash its global growth forecasts further. The "worst cannot be ruled out," he said.

The IMF managing director's comments to reporters after a speech in Kuala Lumpur, Malaysia, represent the most dire estimate thus far of the state of the global economy by a major political figure, and were far more pessimistic than forecasts released by the IMF as recently Jan. 28.

Political figures generally avoid using the word depression because of the association with the Great Depression of the 1930s, when unemployment hit 25% in the U.S. and economic output fell even more steeply. Last week, when British Prime Minister Gordon Brown used the word "depression" to describe the global economy, his aides quickly said it was a slip of the tongue.

In the U.S., chief White House economic adviser Lawrence Summers said that while the economic situation was serious, it wasn't as bad as Mr. Strauss-Kahn seemed to suggest.

"We were really in a very different situation than" the Great Depression, he said on ABC television's "This Week with George Stephanopoulos."

http://online.wsj.com/article/SB123412011581660991.html?mod=googlenews_wsj

[ixion]

1. "We were really in a very different situation than" the Great Depression

Well, no, we're not, really. Certainly, there are differences, but the bottom line remains the same.

[madrchsod]

2. the imf has a great track record in bankrupting countries

but we are not in a depression yet.

[barb162]

3. I think we're getting there very quickly

Certain segments of our economy are certainly well in depression already, such as construction employment. Our entire economy is sinking really fast now.