Posted on 05/20/2012 9:22:07 AM PDT by mojito
CAMP DAVID, Md. — Leaders of the world’s wealthiest nations opened the door Saturday to more government spending in Europe as way to revive the continent’s struggling economy, shifting away from the idea that the surest way to recovery was through strict fiscal austerity.
Meeting at the Group of Eight summit at Camp David, President Obama and his fellow leaders said they were committed foremost to creating jobs and growth, a shift, at least in emphasis, from previous gatherings dominated by German efforts to reduce high government debt through drastic fiscal reform.
In a joint statement, the leaders of eight of world’s richest countries said they would promote investment in education and infrastructure, as they also sought to rein in government debt. Obama, who has pushed for additional fiscal stimulus in the United States, said the new agreement affirmed the course his administration pursued during the financial recession at home. He said the move toward economic stimulus bolstered Europe’s chances of surviving the crisis.
“The direction the debate has taken recently should give us confidence that Europe has taken significant steps to manage the crisis,” Obama said in a brief statement to reporters outside his wooden cabin nestled in the leafy presidential retreat in the Catoctin Mountains. “There is now an emerging consensus that more must be done to promote growth and job creation right now in the context these fiscal and structural reforms.”
(Excerpt) Read more at washingtonpost.com ...
More spending requires Merkel’s money and printing Euro’s.
BALANCE THE BUDGET NOW! Want to know how much to cut. Well. that’s simple: If the deficit is $1.2 trillion, then the next federal budget should cut exactly that amount — maybe a bit more, just to be sure. NONE of that should come out of defense. Not one cent.
Yes, they aren’t even applying their Keynes stimulus theory correctly, Government spending “may” start an economy in a depression;
A REVIEW OF KEYNESIAN THEORY
http://www.huppi.com/kangaroo/Keynesianism.htm
Keynes explanations of slumps ran something like this: in a normal economy, there is a high level of employment, and everyone is spending their earnings as usual. This means there is a circular flow of money in the economy, as my spending becomes part of your earnings, and your spending becomes part of my earnings. But suppose something happens to shake consumer confidence in the economy. (There are many possible reasons for this, which we’ll cover in a moment.) Worried consumers may then try to weather the coming economic hardship by saving their money. But because my spending is part of your earnings, my decision to hoard money makes things worse for you. And you, responding to your own difficult times, will start hoarding money too, making things even worse for me. So there’s a vicious circle at work here: people hoard money in difficult times, but times become more difficult when people hoard money.
The cure for this, Keynes said, was for the central bank to expand the money supply. By putting more bills in people’s hands, consumer confidence would return, people would spend, and the circular flow of money would be reestablished. Just that simple! Too simple, in fact, for the policy-makers of that time.
If this is the proposed definition and cure for recessions, then what about depressions? Keynes believed that depressions were recessions that had fallen into a “liquidity trap.” A liquidity trap is when people hoard money and refuse to spend no matter how much the government tries to expand the money supply. In these dire circumstances, Keynes believed that the government should do what individuals were not, namely, spend. In his memorable phrase, Keynes called this “priming the pump” of the economy, a final government effort to reestablish the circular flow of money.
That’s why their buttering up Merkel, get the Germans to spend their money and give up on Austerity.
Our kids and grand kids will curse us for this, and we'll deserve it.
Oh, you are talking about the link. I thought you meant the title of the article. I never pay attention what the link says, just the title
I think the whirlwind is clearing its throat; there won’t be decades before it shows up.
This use of the debunked Keynesian economic policy shows their willful placing of the world’s economy on the railroad to disaster.
The question is, why are they willfully doing it?
They just keep telling voters...
Debt = growth!
Like
war = peace
freedom = slavery
ignorance = strength
It’s obviously not true, but it’s good propaganda!
Spot on!
IMHO, Obama is trying to kick the can down the road a little further, to get enough "improvement" by November to get himself re-elected.
Zer0 wants to destroy Western Civilization so that the Islamic system rules mankind. He is using the seduction of socialism against us.
I am looking at the idea of destroying Western Civilization so that the third world, ruled by Islam, emerges over the ashes.
At that point there will really be austerity, not the trivial cuts that are being complained about.
Germans know a little about inflation and will throw out politicians who want to give their money away to deadbeats.
You'll have to ask Audi (nicely). They just bought Ducati in April. After adding Lamborghini to their portfolio a few years back. Can Ferrari be far behind when Fiat finally runs out of government money (or is sucked down the money hole by Chrysler)?
As long as they are spending the money to create government jobs the government will get bigger and bigger. Thus government will cost more and more. Then taxes have to go up to pay for the larger government and we go “broker” and “broker”. These are financiers????
How are you going to rein in government debt by trying to stimulate the economy by increasing government spending financed by increased government deficits? Inflation? Higher taxes? More government borrowing? All of those are destructive to the economy in the long run.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.