The recent G20 meeting in Toronto came out with a joint statement endorsing “balanced and sustainable” growth for its members. It was one of those statements that are created by committees to placate all participants and don’t really amount to anything. In this case, no meaningful agreements came out of the G20 meetings. Each government will just go back to doing what they have been doing and mouth high-sounding speeches of solidarity and fraternal love for their world co-leaders.
What really happened in Toronto didn’t come out in the official statements (they never do). But the obvious and deep division between the U.S. and Europe was the main story of the event and that was fascinating to watch.
When Obama chides Merkel for Europe’s (Germany’s) proposed attempts at fiscal responsibility and when Merkel hits Obama for the U.S.’s fiscal profligacy, then you’ve got a good story.
The big split has to do with whether the world should continue fiscal stimulus. The Obama Administration believes that it’s too soon to stop. Recent numbers have them scared about the future of the U.S. economy and it wouldn’t hurt to have some global support when they try to beggar Congress for more spending to promote economic recovery. (“See,” Geithner will say, “even the Germans are begging us to spend so we can rescue the world economy.”)
… Continue reading An Outbreak of Fiscal Sanity in Europe? Insanity in the U.S.?
This recent video from Dan Mitchell at the Cato Institute deals with a very serious issue: the level of government spending and the impact on economic growth. I don’t think I’ve dealt with this enough, although it is implied in much of my work. In this video, Dan discusses the Rahn Curve, which says [...]
Today’s history lesson reminds us of current day Europe. Would France invade Greece at the behest of its bankers to oust Papandreou, insert their own candidate, and restore fiscal sanity to get its banks paid off? Here’s the tale of Ptolemy XII who, as Thatcher said, ran out of other people’s money and turned to [...]
In another data report unexpected by economists, jobless claims jumped last week:
In a setback for the May payroll outlook, initial jobless claims jumped 25,000 in the May 15 week to 471,000. The disappointment includes a 2,000 upward revision to the prior week. There are no special factors to explain the latest week’s jump. [...]
Even the Congressional Budget Office is conceding that things aren’t turning out as expected:
The Congressional Budget Office hiked its forecast Tuesday for how much the stimulus bill will add to the nation’s deficit, raising its estimate by $75 billion to $862 billion.
The American Recovery and Reinvestment Act, passed in February 2009, was [...]
More from Cato’s Dan Mitchell on Keynesian stimulus. It is an excellent recap of the promises and failures of the current economy.
I disagree with his conclusion that we are almost certain to recover in 2010.
I have previously written about the phenomenon that regardless of what the Obama Administration does, economies tend to [...]
By Jeff Harding.
This video was sent to me by Dan Mitchell at Cato. Dan presents an excellent summary of why government spending is harmful to the economy and prosperity. Whether or not it results in deficits, the greater the spending by government as a percentage of GDP, the greater is the negative impact on the [...]
By Jeff Harding.
The new jobs bill negotiations are apparently getting under the skin of our politicians. As reported in the Wall Street Journal Wednesday, the Republicans and Democrats were rather testy with each other during a meeting with the President. Here’s part of their exchange:
Republicans pushed Mr. Obama to freeze federal spending, [...]
