Sean O'Grady: Where is Gordon Brown, just when we need him again?

What happens if everyone deflates at the same time? You don't have to be Keynes to work it out, though it was he who first offered the world the revolutionary intellectual insight. Simultaneous "cuts" across the major economies mean a destructive global cycle of deflation, leaving budget deficits even higher than where they started, and everyone poorer. Unemployment mounts, property loses its value, debts rise, low interest rates are rendered useless in a world drained of confidence, and tax revenues evaporate.

Now governments lie trapped – as we see in Ireland, Spain and Greece – in successive rounds of austerity, ad absurdum. This is the classic Keynesian paradox: what is good for one nation is disastrous for all. Similarly, not everyone can depreciate their currency to gain a competitive advantage – by definition. Yet these are the "beggar my neighbour" policies now engulfing the world.

Is there an alternative? Yes and no. Much as we might wish it otherwise, "Keynesianism in one country" is impossible. If you alone, in a globalised economy, seek to stimulate growth through public spending and deficit financing, you will soon find gains and jobs wiped out as your trade balance lurches into the red, a sovereign debt crisis erupts and interest rates rocket (assuming the markets lend you the money in the first place). The IMF, perfectly fairly, argues that many countries have reached the end of the road when it comes to borrowing, especially in the eurozone. But some have more scope.

The alternative is what Gordon Brown offered in the financial meltdown in the autumn of 2008; only when all the major powers agreed to boost their economies at once was a slump averted. Yet the best the IMF can now do is issue a feeble plea (yet again) for China to import more and revalue her currency, for Germany to slow down her cuts, and for Americans to consume less.

The IMF also wants central banks to print more money, though the fund admits it will be pretty ineffective. The World Economic Outlook is, essentially, a counsel of despair, given the track record of the nations involved and a lack of global economic leadership.

So the IMF has shrugged and walked away. Deeply unfashionable as it is to say it, some of us are starting to miss Mr Brown's presence on the world stage. Even if, as is sometimes rumoured, he does end up running the IMF one day, he may arrive too late.