Time to Reverse the Economic Stimulus

That’s what time it is according to G-8 finance ministers, who have already started to draft plans to retract budget cuts and bank bailouts in preparation for economic recovery. While this does not mean that the end of the recession is necessarily in sight, it does mean that economic officials know what to do when it comes.

G-8 Leaders outside Apple Store (Image: Flickr)

Right now, the consensus among economic experts is to keep the mechanisms in place that are allowing the economy to grow. “It is too early to shift toward policy restraint,” according to U.S. Treasury Secretary Timothy Geithner, as such action would potentially bring us back to the worst parts of the economic crisis.

From all indications, the G-8 ministers maintain a positive outlook on the economy, with their most recent report the most optimistic since September’s collapse of Lehman Brothers Holdings Inc. However, the same data used to craft these reports also shows that the situation remains tenuous and that much caution is still required.