[My comment: interesting that this is showing up in the Indian press. So much of the rest of the world was counting on us Americans to just magically keep on buying, buying, and buying. At the same time, these same folks were insulting us, claiming we got paid too much, borrowed too much, and wanted too much. Be careful what you wish for is a saying the third world needs to hear now, I guess]

US consumer cannot sustain global economy: IMF head

11 Sep 2009, 2209 hrs IST, AGENCIES

PARIS: The savings-conscious US consumer can no longer be counted on to drive the global economy and new sources of momentum will have to be found,
the head of the International Monetary Fund has urged.

IMF Managing Director Dominique Strauss-Khan, in an interview with the newspaper Le Monde to be published Saturday, also urged Group of 20 leaders convening in Pittsburgh, Pennsylvania on September 24 and 25 to approve measures to tighten financial system regulation.

He added that the G20 was not acting "quickly enough" on the question of exorbitant bonuses taken by executives at major banks.

"The economy is recovering, great. But we have to remain cautious ... and not give the impression that the crisis is behind us," he told the paper.

"We have emerged from the financial crisis" but continue to grapple with "economic" and "social" crises.

"For the worker who will lose his job in November the crisis is not behind him -- the crisis is ahead of him," Strauss-Khan said, warning that an increase in unemployment will not be checked before the second half of 2010.

He argued that global economic growth can no longer be expected to come from such macro-economic imbalances as US indebtedness.

In the United States, hard-hit by recession, "the household savings rate, which was practically zero, is now at 5.0 percent ... Good news for the deficits. But who will replace the US consumer to power global growth?"

He recalled that the United States accounts for 25 percent of global output.

"The question of new sources of growth must be considered," Strauss-Khan said, voicing doubts that emerging market countries will be able to provide the driving force behind worldwide momentum.

He also urged the United States to maintain its economic support measures.

"With private demand still extremely weak, we could see another slide" in the world economy, he warned.

http://economictimes.indiatimes.com/art ... 000532.cms