Workers take part in a demonstration for the defence of employment and industry in Marseille

Enough of the zigging; it's time to zag.

Remember all the talk about reigning in government spending, stiffening up bank balance sheets and reconsidering our addition to debt?

Yes, well, forget all that, at least for moment, because it's clearing not working. It's time for a bit of the "hair of the dog" strategy if we're ever going to right the good ship Global Economy.

That, in a nutshell, sums up the volte face that's starting to work its way around the world's academic and policy circles as they stare blankly at grim economic data from virtually every corner of the earth. If Saatchi & Saatchi were commissioned to design its PR campaign, it would be easy to visualise the catchphrase: "Austerity isn't Working."

The International Monetary Fund added another tenor to the growing chorus with a report released late last week suggesting austerity has blunted demand more than first anticipated - largely because central bank rates, already at record lows, couldn't fall further to offset the slowdown in government spending. Practical application of this change has already been applied to Portugal, where deficit targets were eased by around 0.5 percent last month in the face of rising unemployment, limp tax revenues and steepening recession.

The Fund helpfully suggested Chancellor George Osborne spread his programme of tax increases and spending cuts over another two to three years in order to limit the impact economic damage on what may become a potential "triple dip" recession.

Greece, as well, could do with a bit more time to weather the costs of the near evisceration of its public finances, IMF head Christine Lagarde said last week (I paraphrase), and urged her European friends to start thinking about how this might be done.

Political support for that particular about-face is much easier said from the safety of a fixed term in Washington than from an eroding political base and an upcoming election in Berlin, however, which might explain the European Union's priorities.

EU officials, it seems, would prefer to push back the deadline by which European banks must comply with stricter rules on bank capital requirements: in effect the increased amounts of cash they'd need to set aside (i.e. not lend) to absorb potential losses on this like property and business loans. The concern is that banks might not have the breathing space needed, even with near zero interest rates and a "come on, come all" approach to collateral from the European Central Bank, to lend into the broader economy if they're hamstrung by the so-called Basel III rules.

So, three years into the grand experiment where the twin engines of economic growth - government spending and bank lending - were choked off by policy, the grandees are just now realizing the impact it's having on consumer demand?

Most of us have realised - after many Christmas-binge induced January fitness regimes - that losing weight requires exercise and exercise requires fuel.

Starving yourself *and* schlepping 10 kilometres on the treadmill usually results in head-spinning, wobbling legs and a face plant. In other words, the opposite of the desired effect.

What's needed, of course, is a change the *kinds* of foods you eat while you still maintain your caloric intake. That way you can be certain you're strong enough to withstand the new physical effort.

The same seems true with austerity: starving your economy of the two main growth drivers induces similarly dizzying affects: rising unemployment, social upheaval and, in most cases, deteriorating public finances.

In other words, you guessed it, the opposite of the desired effect.

Economies need fuel; literally and metaphorically. Right now, that fuel simply isn't coming from consumer demand and likely won't ever do so until we see sustained improvement in the jobs market (and a pie in the face for anyone who argues that unemployment is a "lagging" indicator).

Absent that catalyst, credit growth or government spending has to pick up the slack. Given that we can't seem to entice the banks to lend into a risky economy - after having spent the last five years castigating them for irresponsibly doing exactly that - we're really only left with one choice.

And I'm not talking about the sugar-rush of quantitative easing, which has been a categorically miserable failure in the three economies in which its been unleashed. I'm talking about targeted and intelligent investment that may bust budgets but at least creates jobs.

Politically, however, that's just not going to happen.

It can't happen in Britain, where the architects of austerity, Prime Minister David Cameron and his sidekick George Osborne, are sinking in the polls and facing rebellion from within. A U-turn on spending - the government's raison d'etre - would cement a thumping defeat at the next general election (or sooner) and return the Conservative Party to the electoral wilderness once again.

It can't happen in Europe, where paymaster Chancellor Angela Merkel faces similar electoral pressures and a newly-revived opposition led by former Finance Minister (and uber fiscal conservative) Peer Steinbrueck, who's Social Democrats are polling at a six-year high.

It can't happen in the United States, where the nation's bizarre fiscal laws (no limit on annual spending, but a fixed limit on total debt) threaten to shut down the Federal government on an almost annual basis, regardless of who gets elected in November.

So in many respects we've blown right past the original debate - austerity versus stimulus - and found ourselves in the quagmire of the second - practical logic versus political reality.

No points for guessing the winner of that one.