International Monetary Fund rescue packages are usually associated with "structural adjustment", privatisation and liberalisation. But IMF economist Michael Kumhof's recipe for avoiding crunches is increased equality
In the interview, Michael Kumhof states
According to former IMF chief economist Raghuram Rajan, politicians who saw the drop in [the majority's] income chose not to deal with the inequality but rather to make more money available. Thus, people could take out loans to maintain the consumption they were accustomed to. The banks were granted permission to lend more money and the liberalisation of the financial market made big loans possible.
On what finally triggered the collapse:
It was initially the huge debts among individuals and later states that caused the explosion. Personally, I withdrew all my money from the market in 2005. It wasn't hard to see what was happening. I have personal experience from lending at a bank. The financial sector doubled in the period before the crisis. The debt burden accelerated in the ten years preceding the crisis. Insufficient regulation was the triggering factor. But it's a mistake to focus on the straw that broke the camel's back. My view is that it is a phenomenon that spans a generation, rather than a single business cycle.
I think stimuli can do a lot of good as long as state revenues do not cause imbalances in the economy. We should be trying to bring more money into the public treasury to stimulate the economy rather than cutting costs