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...Chinese government has quickly awakened to the threat of a sharp slowdown. Until a few months ago, Beijing's top priority had been fighting inflation. Now policymakers are easing off the brakes and hitting the gas again in an effort to stimulate growth. The central bank lowered its benchmark interest rate twice in the past 45 days, the first cuts since 2002. In mid-October, the State Council announced plans to increase infrastructure spending, to offer tax rebates for exporters and to boost government-controlled prices for agricultural products. Beijing is also widely expected to introduce measures to resuscitate...

Author: /time Magazine | Title: How Will China Weather the Financial Storm? | 10/23/2008 | See Source »

...Washington's Answer: Charge! This, you'll not be surprised to learn, is what the government is trying to avoid at all costs. "We're going to see an evaporation of concern about fiscal restraint simply because the threat of an economic collapse is so great," says Robert Reischauer, president of the Urban Institute, a public-policy think tank. In other words, as the real world sheds debt, the government takes on more and more in the hope that at some point the economy will stabilize and then begin growing again...

Author: /time Magazine | Title: Living in a World with Less Credit | 10/23/2008 | See Source »

Instead, what we are seeing now in Washington and other world capitals is fear we might be headed for an economic collapse caused by a collapse of demand caused by a collapse of credit. Confronted with that threat, governments seemingly cannot help turning to the remedy formulated by Keynes during the dark years of the early 1930s: stimulating demand by spending much more than they take in, preferably but not necessarily on useful public works like highways and schools. "I guess everyone is a Keynesian in a foxhole," jokes Robert Lucas, a University of Chicago economist who won a Nobel...

Author: /time Magazine | Title: The Comeback Keynes | 10/23/2008 | See Source »

Pakistan's leaders say their own response to the terrorist threat has likewise stepped up a notch. They point to the Bajaur offensive as exhibit A: The operation, which began in early August, was initially a defensive action to stop militants overrunning the regional headquarters of Khaar. Over the past few weeks, Pakistani troops have gone on the offensive, using aerial attacks and ground troops supported by tanks and artillery in one of the fiercest battles inside Pakistan since 9/11. Pakistan's army bosses say they have killed more than 1,200 militants, including foreign fighters from the Middle East...

Author: /time Magazine | Title: The US vs. Pakistan: With Friends Like These | 10/22/2008 | See Source »

...this month in the run-up to Sunday's municipal elections. Politicians around the world have long realized that a pledge to crack down on crime tends to win votes, and Chile's politicians are no exception. And when their message is that crime is a major and growing threat (to which they are the antidote) many voters start to believe that they are more threatened than is really the case...

Author: /time Magazine | Title: Is Chile Imagining a Crime Wave? | 10/22/2008 | See Source »

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