IMF: Balance-Sheet Recessions

The IMF has been famous for imposing austerity upon economies in economic crises in the past two decades.  RortyBomb says, "One has good reason to dread hearing the policies the IMF recommends for a country in a crisis. Maximal labor "flexiblity"? Cat food for old people? Picking government functions out of a hat to privatize?"  IMF privatization, deregulation, and austerity policies didn't work out too well in the Asian and  Latin American financial crises so the IMF has completely reversed their thinking for dealing with the present recession. 
RortyBomb summarizes their latest report:
"1. A run-up in household debt and leverage explains the economic collapse across countries."
 This means a balance-sheet recession.  That is where consumers increase their debt to savers (the elites and elderly) and then they try to pay it down which reduces consumption because the savers don't spend more just because the borrowers are spending less.  
"2. Financial crises are not a driver of prolongued recessions. If anything they are a symptom."
The recession caused the financial crises: 
recession+debt -> financial crisis
not  
financial crisis -> recession & debt 
"4. Foreclosures are a problem."  
It is amazing that most economists have ignored this part of the problem of this financial crisis.  The slow foreclosure process destroys housing value and suppresses home values which makes indebted homeowners feel poor and spend less.   
"5. Demand demand-side stimulus. Across the board. Now."

Temporary macroeconomic policy stimulus...simulations of policy models developed at six policy institutions suggest that, in the current environment, a temporary (two-year) transfer of 1 percent of GDP to financially constrained households would raise GDP by 1.3 percent and 1.1 percent in the United States and the European Union, respectively...Monetary stimulus can also provide relief to indebted households by easing the debt service burden...A social safety net can automatically provide targeted transfers to households with distressed balance sheets and a high marginal propensity to consume, without the need for additional policy deliberation...

Support for household debt restructuring: Finally, the government may choose to tackle the problem of household debt directly by setting up frameworks for voluntary out-of-court household debt restructuring—including write-downs—or by initiating government-sponsored debt restructuring programs. Such programs can help restore the ability of borrowers to service their debt, thus preventing the contractionary effects of unnecessary foreclosures and excessive asset price declines.