Inkwell Institute
International Studies Group
Recently in Toronto there was a meeting of the mindless…a group called the G20……a meeting of the top leaders from 20 different countries that meet to plan the world economy and here is what they decided:
The communiqué called for governments to halve their budget deficits by 2013 and for the ratio of national debt to gross domestic product to be stabilised by 2016. This was seen as a win for Germany and other countries backing deficit reduction. But the document made clear that these targets were not binding and, in a concession to the US, expressed the hope that governments would follow “growth-friendly fiscal consolidation plans”.
In a further bid to walk both sides of the street at the same time, the communiqué declared: “There is a risk that synchronised fiscal adjustment across several major economies could adversely impact the recovery. There is also the risk that failure to implement consolidation where necessary would undermine confidence and hamper growth.”
The G20 resolution on fiscal consolidation allowed all sides to claim a victory even as the differences widen. German chancellor Angela Merkel said the outcome was “more than I expected”. She claimed that the views of continental Europe had prevailed. German officials noted that the US had learned its lesson about writing public letters that sought to change the position of others. In the lead up to the summit, Obama issued a letter to G20 participants warning that too rapid fiscal tightening could impede global recovery. He noted that earlier G20 agreements had pointed to the need for export surplus countries—a reference to Germany and China—to increase domestic demand.
As usual this meeting was nothing more than a photo op for the leaders to appear to be working on solutions when all they were doing is a slow tap dance. The reality is that the world cannot solve these problems it is up to the individual countries to find the answers and to pretend any thing else is just absurd.
Well, yes – if the communique reflects what actually happened and was discussed (including in the corridors and the bar) then nothing except was achieved except some lip-service paid to “responsible” debt management – i.e…. zilch!
After watching the G20/G8 over the years I kinda believe it is not much more than a photo-op…..
I disagree that the G20 was “nothing more than a photo op.”
The summit concluded with a statement that the “advanced economies have committed to fiscal plans that will at least halve deficits by 2013 and stabilize or reduce government debt-to-GDP ratios by 2016.”
In other words, coordinated austerity. Particularly in Europe, but likely in the US, too.
China, on the other hand, is encouraged to “focus on structural reforms that support increased domestic demand,” including actually strengthening social safety nets so as to “reduce precautionary savings and stimulate private spending.”
Based on the statement, it seems that the G20 doesn’t have much optimism that the U.S. and Europe will be able to provide sufficient demand to grow the global economy, and they’re instead looking to China for that. An implicit acknowledgment of prolonged mass unemployment?
Well, yes – on the face of it. But what I heard was a promise to try, but no actual binding “commitment” from anyone. Not quite the same thing – perhaps I heard wrongly, but I don’t think so.
In any event, you’re quite right in one respect, they all want “the other guy” to go on spending whilst they all rush around like headless chickens trying to save the money they should not have been spending for the last eight or nine years, or more.
You cannot indefinitely spend what you don’t make or have. You can borrow for a year or two, but after that all you’re running is a giant Ponzi scheme and it WILL crash as soon as the economy turns down, which is more or less what happened in 2008 – globally!
Sorry, but I have little faith in the rest of the world….How many proposals have been signed or given that have actually been nothing more than filler for the evening news? If all this is actual then I will reassess me thinking, but I have no optimism either.
I agree – ignore the apparently fine words and listen to the “modifiers” – the “where possible”, “subject to”, “as soon as it is practical”, “we regard it as necessary” and all the rest – if you take note of all that – they’re saying zilch!
The next several years are going to be a bitch, but will it improve the future? I doubt it – not least because the electorate never actually learns anything!
Well said……it is like any other issue…words are cheap and action not forthcoming….it is just that simple….
Sadly, you’re right 🙁