The OECD said Tuesday more stimulus is needed to pull the world economy out of a recession.

The world economy is now gripped by the worst recession in 50 years, the OECD said Tuesday, calling on governments to step up stimulus spending to spark a recovery in 2010 likely to be “muted” at best.”The world economy is in the midst of its deepest and most synchronised recession in our lifetimes, caused by a global financial crisis and deepened by a collapse in world trade,” OECD chief economist Klaus Schmidt-Hebbel wrote in a report.

The economies of the 30 industrialised members of the Organisation for Economic Cooperation and Development are projected to contract 4.3 percent this year before strengthening somewhat to show negative growth of 0.1 percent in 2010.

At the same time, the World Bank forecasts “unprecedented” declines in global economic output this year, especially in the vulnerable developing world. The Bank’s latest projections show the world economy contracting 1.7 percent in 2009.

Bad news, certainly. But does continued economic decline automatically mean we have to ‘invest’? Or is it wiser to wait and let the market sort itself out now that Western governments have done everything in their power to prevent banks from going bankrupt? The OECD, the World Bank and the White House all obsess over the short term. They don’t look years ahead, they look months ahead and stop there. Western governments don’t have money. They’ve spent everything they had. This means that ‘investments’ are only possible if they borrow money from citizens and / or other governments (like China). Stimuli cause debts to skyrocket. These debts have to be paid off. Not by the ones currently in power, but by their children and grandchildren.

We don’t need a worldwide stimulus plan. Taxes can be cut in order to ‘stimulate’ the economy, but nothing more should be done. If businesses can’t survive, it means they’re not healthy. Unhealthy companies are a drain on the economy and therefore on society. They should disappear.