More from the IMF

The International Monetary Fund is set up by the developed nations of the world to help guide the economies of the biggest countries.  They have, for several years, been arguing against Keynsian style economics and for austerity measures to be taken. So how's that been working for them? Eh, maybe not so well.

From the Daily Kos (see, I'm getting better at getting sources)...

-----------Earlier this week, the International Monetary Fund made a striking admission in its new World Economic Outlook. The IMF's chief economist, Olivier Blanchard, explained that recent efforts among wealthy countries to shrink their deficits - through tax hikes and spending cuts - have been causing far more economic damage than experts had assumed.
-----------Now, a new IMF working paper released today details the true damage of austerity:
    In a new paper published Thursday, IMF Economic Counsellor Olivier Blanchard and research-department economist Daniel Leigh show the IMF recommended slashing budgets too fast early in the euro crisis, starving many economies of much-needed growth.
    In "Growth Forecast Errors and Fiscal Multipliers," Messrs. Blanchard and Leigh calculate IMF and European economists underestimated the euro-for-euro effect of cutting government budgets. While economists expected that cutting a euro from the budget would cost around 50 cents in lost growth, the actual impact was more like 1.50 per euro.