At Camp David, world leaders agree on more spending to boost Europe’s economy

Washington Compost ^ | 5/19/2012 | David Nakamura and Howard Schneider

[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.”

[MinuteGal]

In Germany, when out-of-control hyperinflation set in after WW1, the volks were toting their near-worthless paper money bills around in wheelbarrows and suitcases.

I'd invest in wheelbarrow company stock tomorrow, but our wheelbarrows are all made in China now. The suitcases too, probably.

Pretty soon, our paper money will be made in China, also.

Things don't look too good from any angle, do they!

Ach du lieber!

Leni

[Loyal Buckeye]

I all B.S. Spend more, but rein in debt? This statement was written to benefit Obomber.

[GeronL]

The last thing these governments need is more spending

[ColdSteelTalon]

Its funny. when I paste the link into a facebook post it does not come out right.

[justa-hairyape]

In the long run it may be cheaper for Germany to just conquer Europe.

[tet68]

You have to figure Angela is not happy about this.
I think the Germans were on the right track, but
now obama has gotten them ALL to drive off the cliff
in order to placate the leftist base in each of their
countries.

[justa-hairyape]

This time I think I will root for the Germans !

[DNME]

Nobody is protesting higher spending (even though they should).

But lots of people are rioting and getting violent over austerity measures.

Which course of action would your average political coward follow, when pushed?

More spending, coming right up sir!

[Texas resident]

Problem is that there has been NO austerity, spending cuts.

Only threats of spending cuts and the riots follow.

IF actual spending cuts happened, the riots would be huge and the pols in power would be held responsible.

So in order to keep their cushy jobs, they threaten cuts, then scale back, then go back to promises of more spending thus extending and expanding the problem.

No one on the public dole wants to give up an inch, but in the end they all will lose everything.

When your outgo exceeds your income, your upkeep WILL be your downfall.

Socialist idiots cannot accept reality.

[piasa]

IIRC, I think BP got to write off all its losses in one fell swoop thanks to a convenient change in the law. It was BP’s competitors that got screwed with the moratorium on drilling in the Gulf.

[darrellmaurina]

Thank you for reminding us of the “up is down,” “war is peace,” “freedom is bondage” Orwellian gobbledygook being advocated by the Keynesians.

Essentially these people are saying “thrift is bondage!” or “debt is freedom!” when they says the solution to government deficits is to spend more money.

Without this background, trying to read the New York Times columnists attacking Republican budget-cutting (Krugman, for example) makes no sense.

[darrellmaurina]

You beat me to the Orwellian reference! I should have read the entire thread before posting.... argh....

[21twelve]

I just read a paper by one of Obama’s economic advisers. She wrote that one of the reasons why the Depression last so long was there was not enough “fiscal and monetary expansion”. Confusing to me, but the gist of it was “not enough debt and not enough stimulus funding - FDR stopped too soon”. Oh, she also went on and on about how confiscating the private gold and revaluing it was such a great thing. (Odd though, I don't recall her using the word “confiscate”).

And this is one of Obama’s current advisors.

But of course FDR didn't go far enough. SOME of the power still does rest with the people.

[palmer]

Oh, she also went on and on about how confiscating the private gold and revaluing it was such a great thing. (Odd though, I don't recall her using the word "confiscate").

Once the EU and the US inflate, the Chinese and Arabs will demand gold for their stuff (consumer products and oil). There will be middlemen who will get the gold to them and the stuff to the consumers in the West. Uncle Sam will try to become the exlusive middleman. They will ban transactions in precious metals (but they will not confiscate or ban private ownership).

[surfer]

I remember reading a story about a person getting robbed in Weimar. They left the useless money and took the bag that money was carried in.

You would negotiate a price for your breakfast before you ordered and paid for it then because by the time the order was under-way in the kitchen the price had already skyrocketed.

American’s need to realize that something like this can happen here. It is what the globalist progressives need, a crisis of such proportion to bring America and our dollar to its knees to usher in real hope and change...

Look at the Fabian socialist imagery:

http://fabiansocialism.moveoff.net/

They need to forge a new world through hammering.

[Vanders9]

I'm not an economist, but it seems to me that within the narrow confines you describe keynes' theory is logical and will work, but - and its a big but - you can't build an entire economy on doing that, because the economy is not a completely closed system. Money moves round and round, but there has to be a some basic production that actually generates wealth, rather than just move it around.

The impression that I get is that these stimulus packages are an economic kick start that might get things back on an even keel (i.e. get us out of debt), but you cannot use it as an alternative to a sound, thrifty economy. And what happens if the kick start doesnt work? What do we do then? Interest rates cant get any lower. What else is there but "quantitative easing" - a euphemism for the horror of currency devaluation?

[ArrogantBustard]

So ... the world's communist leaders get together, smoke some crack, and conclude (again, and against all evidence to the contrary) that we can tax our way to prosperity.

We're living in bizarro world.

[tacticalogic]

In the long run it may be cheaper for Germany to just conquer Europe.

It's starting to sound like it might be more a process of foreclosure than conquering.

[21twelve]

I sure hope that the rumors that Fort Knox is empty are not true!

[TLI]

I just read a paper by one of Obama’s economic advisers. She wrote that one of the reasons why the Depression last so long was there was not enough “fiscal and monetary expansion”

I will venture a guess... Christina Romer.

She is ALWAYS going on about FDR.

But of course FDR didn't go far enough.

They are communist agenda "progressive liberals."

There is no "far enough" for them.

.