He comments on the IMF’s latest report on the fiscal situation worldwide, and notices something buried in the footnotes, that the large structural deficits currently forecast are due to depressed demand and economic activity causing deflation, not government spending.

The solution is therefore for governments to engage in stimulus activities of the sort that put an end to the great depression, while (hopefully) avoiding that whole “World War” thing:

It takes careful reading to discover what’s really going on:

The persistence of deficits reflects permanent revenue losses, primarily from a steep decline in potential GDP during the crisis, but also due to the impact of lower asset prices and financial sector profits.

(emphasis mine)

Aha. Most people who look at the IMF report will, I suspect, read it as telling a tale of government profligacy getting us into a hole. But what the report actually says is quite different: it says that the financial crisis has made us permanently poorer, which among other things reduces revenue, and governments have to tighten their belts to make up for that loss.

He is correct when he says that the IMF’s burying the lede means that , “[T]he report isn’t literally misinformation, but in practice it’s likely have that effect.”