That’s what the IMF says and that repeats my earlier claims (and those of all sensible macroeconomists). Increased personal savings, savings by firms and pressure on governments around the world to reduce deficits are driving a situation that replicates events that ocurred during the Great Depesssion of the 1930s. Too little demand due to excessive savings. The desire of firms and citizens to rebuild personal balance sheets is natural enough but the moves by Republicans in the US to rein in government spending, by debt-obsessed Europeans to force massive fiscal contractions in profligate southern European economies create very substantial risks. In Australia the nitwit right and the Coalition are harping on the need to cut government spending and debt to meet pre-imposed deficit reduction targets even though the latter are not a concern.