The G20 will be meeting this weekend and are reported to agree that the worldwide economic stimulus approach needs to continue. This is generally good news for all, the best part being that if everyone is handing out money, then inflation will not be a major issue for anyone more than anyone else- at least in theory.

At a time when the U.S. dollar’s value and role as the world’s benchmark currency is being evaluated, I think this is a good thing. It may lead Congress to do more than the bits and pieces they have been handing out since the since the one $787 Billion stimulus package, and it certainly helps with the process of extending domestic assistance like unemployment benefits and housing tax credits. If we were on our own handing these out, the dollar would be sinking like a stone and the U.S. would be in even more trouble.

The expectation that the G20 will continue stimulus funds comes from a recent paper published by the IMF.

"One of the key lessons from the experience of similar crises (such as the Great Depression and Japan in the 1990s) is that withdrawing policy stimulus too early can be very costly, particularly if the financial system remains vulnerable and prone to adverse shocks.”

So there it is- we can all rest assured that the money will keep flowing. In some ways this is good- people can count on the stimulus money to maintain even when the jobs are not coming- U.S. unemployment reached 10.2% according to a new report out today- That’s more than 1 in 10 people out of work who could and would be working. More money coming from the IMF and the federal government along with tax breaks and unemployment funds will create a cushion for workers and an opportunity for businesses to expand, hopefully creating those jobs soon- but while I hear a lot about how the financial economy has a fragile recovery going, I don’t hear about people building new plants or launching new products.

Where are the incentives for renewable energy companies to make it happen right now? It seems like the time is ripe for subsidized investment- it would bring new jobs, new industry, and start making American energy more independent, which would be excellent news for this country.

The IMF was not all positive, though:

"The pace of recovery is uneven, particularly in advanced economies, with consumer confidence remaining subdued, the waning of temporary fiscal measures such as the cash for clunkers program in the U.S. and similar programs elsewhere is slowing production.”

Their complaint and assessment sounds very investment-focused, treating the economy in general as a business venture- put in the money and that will create the climate for growth and the growth will bring the returns- in this climate, those returns would be jobs and, finally, more confidence and spending from consumers.

The way our economy is structured, we need people to give money to business, not the government. Does that mean the government should just give the money to people? It does sound like the IMF would support that, and it sounds like the G20 will do the same. We’ll see what that means around the economy- perhaps every industry will get its own version of “cash for clunkers…”