IMF to world: spend stimulus money

The IMF last Friday urged governments around the world to fully implement spending measures that have already been crafted to lift the global economy out of the worst recession in decades.

An IMF spokesman said, “Tentative signs are emerging that the rate of decline in global output is moderating and that financial conditions are improving.” But it's still too early to draw firm conclusions. "After all, the breadth and severity of the financial crisis and economic slowdown are the most serious experienced since the 1930s.”

An interesting statement in the report sheds some light on how little concrete action the Obama administration has taken in tackling the crisis.

The IMF said that payroll tax cuts had been implemented relatively quickly, but only $46 billion, or 11% of authorized spending measures, had taken place through mid-May, concentrated in health and human services.

That's peanuts when compared to a $14 trillion economy, and it highlights the lengthy spending process versus tax incentives.

The Fed has taken dramatic action, cutting rates to zero and offering to buy nearly $1.8 trillion in government securities. It's time for fiscal policy to take a more prominent role.