Western countries seem to be running out of ideas to revive their increasingly imperilled economies.
On Wednesday, there were indications that US President Barack Obama will unveil a “revival” package in September. Going by the details given out so far, it looks like it is going to be a rehash of sops and cuts in deficit spending—hardly the kind of steps needed now.
Across the Atlantic, in Britain, there are signs that the Bank of England may launch its own version of quantitative easing. This is likely to be just another spoon of sugar in an otherwise badly brewed beverage. After an initial kick, it will only lead to a bad hangover.
The fact is the West has exhausted all the tools of stimulation at its disposal. Unless deeper structural reforms—that will be painful—are carried out, a Japan-like stagnation looms large. The choices require political courage that is in short supply.