It's an emergency. Long-term cures must wait

I've read an article about current credit crunch.
Anatole Kaletsky presents the credit crunch
as one kind of illness of the world economy like
cancer. He was talking about the main reasons
of this `cancer` and ways of solutions.

The main reasons of this credit crunch is excessive
borrowing, property speculation and reckless and
dishonest banking practices. Another cause of
this credit cancer was the global imbalance between
exuberant consumption and house-price speculation in
America, Britain, Spain, Scandinavia and Eastern Europe,
on one hand, and excessive saving and austerity, on the
other, in China, Germany and Japan.

Because of this problems required consumers in the US
and Britain to spend and borrow less, while the surplus
countries invested and spent more. Govenment must
support and subsidise banks to make eaier conditions
for people to borrow and spend money. They should do
everything to encourage consumption.

The best way to do it is to cut interest rates and taxes,
especially taxes on consumption and on lower income
households. As Mr.King said policymakers all over the
world must be willing to cut interest rates to levels never
imagined before. If it is necessary to cut it to the zero point.

If interest rates will be near to zero and taxes will be cut for
a big amount then probably in the middle of next year recovery
of the world economic system will begin. It will start in
America and China, spreading to Britain and eventually reaching
continental Europe in 2010.