We are not attacking the real problem

Daniel Alpert says that the world is no longer a supply-side economy.  Hence, economic solutions that have worked in the past — easy money, reduced taxation, fiscal belt-tightening and deregulation — will not work now.  The 21st century economic world is one of oversupply; we have too many people available for work, too much capital and too much productive capacity.

We've moved to an oversupplied world because of the rise of countries that are now competing with the Western world.  These countries were poor but now have huge surpluses and sovereign wealth funds.  The Western world is a debt-laden world that is having problems competing.  

Alpert thinks "We need a new economic multilateralism with the developing world, to encourage them to rebalance their economics away from savings and toward consumption, while we in the West must curb our addiction to credit and consumption."