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Submission + - Oops! Sorry, we got it all wrong, IMF says (herald.ie) 1

daem0n1x writes: Ireland, Greece and Portugal have been under draconian austerity measures after they have been forced to ask financial rescue from the IMF, in the aftermath of the 2008 bank crash. The results of these austerity measures are well known: Recession, unemployment and general social and economic meltdown.
After all this pain and suffering, the IMF suddenly finds a gigantic flaw in the formulas used to calculate the economic effects of austerity.
Well, at least they stepped forward to recognise they screwed up. But is it in still time for European and global economies to recover?
How is it possible that worldwide economic policies be conducted by such flawed systems? Numerous economists have been warning about this for years, but they faced deaf ears. Sounds familiar? Yes, just like before the subprime bubble bust.

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Oops! Sorry, we got it all wrong, IMF says

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  • Bank: I'll loan you 10 and when you can you pay me back 10 + 1
    Smuck: OK. I'll take the 10 and then pay you back. But where shall I get the +1?
    Bank: I'll loan you another 10 from which you can take the +1 - but don't forget that you will have to pay this 10 back +1
    Smuck: OK. Here is 11. Now I have 9 and owe you 11. I now need 2.
    Bank: I'll gladly loan you another 10 from which you can take the +2 - but don't forget that you will have to pay this 10 back +1
    Smuck: OK. Here is 11. Now I have 8 and owe you 11. I

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