The world economy is perilously close to slipping into a vicious downward spiral of lowering economic activity and deflation.

Thursday, the Washington Post reported that “sharply lower consumer spending in the United States and other high-income countries is stalling global trade, causing a surprise downturn in exports from China that is dramatically slowing its economy and rippling through other countries that rely on international commerce.” The World Bank says that a “very deep global recession” cannot be ruled out.

Thus, now is the time for concerted, bold action. A new report from the Center for American Progress outlines steps that the United States and countries around the world can take to reverse the downward spiral and turn it into a “virtuous circle of synergistic advances of living standards in rich and poor countries as they integrate.”

The plan calls for the U.S. to first implement a large fiscal stimulus to jumpstart global demand. Next, it calls on the United States and the G20 to re-focus international economic priorities towards institution building, in order to ensure broadly shared gains from trade. The paper contains specific proposals for institution building in three areas:

1) Helping developing countries institute the labor, investor, environmental, and consumer protections and basic social insurance programs that can help them to diffuse the benefits of trade and growth more broadly among their populations

2) Updating international financial institutions to enhance the stability and contribution to real economic activity of financial markets

3) Improving the management coherence of the international economic system as a whole

As the paper’s author, Richard Samans explains, a “Global Deal along these lines amounts to a populist approach to globalization in the best sense of the term — a concrete plan to make it work for more people.“