G20 Drops Obama's Keynesian "Spend Your Way Out of a Recession" Economics
Posted by Jim Hoft on Saturday, June 5, 2010, 10:54 PM
Thank goodness.
There is some sanity in the world. It took the death of FDR to lift the United States out of the last Great Depression. Fortunately, we may not have to wait 4 terms this time.
The G20 dropped the Obama-Pelosi “spend your way out of a recession” Keynesian economic plan today.
The Financial Times reported (subscription required):
The communiqué of the meeting made it clear that the G20 no longer thought that expansionary fiscal policy was sustainable or effective in fostering an economic recovery because investors were no longer confident about some countries’ public finances. “The recent events highlight the importance of sustainable public finances and the need for our countries to put in place credible, growth-friendly measures, to deliver fiscal sustainability,” the communiqué stated.
“Those countries with serious fiscal challenges need to accelerate the pace of consolidation,” it added. “We welcome the recent announcements by some countries to reduce their deficits in 2010 and strengthen their fiscal frameworks and institutions”.
These words were in marked contrast to the G20’s previous communiqué from late April, which called for fiscal support to “be maintained until the recovery is firmly driven by the private sector and becomes more entrenched”.
Maybe they finally started to heed the Chinese warnings.
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Published May 24, 2012 at 8:46 pm - 89 Comments
Opus #6 commented:
You mean running up the credit cards is not the path to financial security???
mark commented:
That means the US markets are going to crash because nobody else around the world is believing this hope and change crap. (Dear liberal socialists, you just keep on buying. If it was a good deal at $100 a share, it’s even better at .50 cents/share isn’t it?)
Greg commented:
One can only hope that as this President continues to try and lead us into historically proven failed policies that he will realize it would be best for him to resign. I’d rather take my chances with Joe Gaffe-O-Matic Biden over someone who is truly unfit to lead. Better yet, I’d take Colonel Allen West(A GREAT AMERICAN!) in a heartbeat!
Moonbeam commented:
WELL, BUTTER MY BUTT AND CALL ME BISCUIT!
Best news I have heard in awhile..
BarbaraS commented:
It’s a sad, sad world when communist China has better fiscal policies than the president of the uS and lectures him on his dumbness. As far as the G20 goes how could some of the so-called best minds in Europe fall for this tripe. An iota of common sense would tell you that this overspending will bit you in the end. Those rainbows and unicorns were just fairy tales and Obama figures in one. However, I can’t make up my mind if he is the emperor with no clothes or an empty suit. Whichever it is, he has a vast amount of confidence in his ability to smooze.
Mary commented:
Your statement, “it took the death of FDR to lift the United States out of the last Great Depression,” makes me wonder what your reasoning is and if you are old enough to remember. Which I doubt.
Entering WW2 is what brought the US out of the Depression. The men not drafted were working in defense plants. Once hired as defense workers they were rarely drafted, women joined them as there were not enough men to fill the need.
Folks who had lived lives of poverty, some on hard scrabble farms, found jobs and widows were able to work and feed their children.
I cannot judge FDR politically, I know he kept our spirits up during a long and devastating war.
It appears to me, anyone my generation held as a hero or a leader, your generation wants to demean.
JPL17 commented:
Mary,
Are you really 80 years old? If so, then although you’re old enough to remember FDR, unfortunately you may be too old to understand this “Internet” thingy, so I’ll explain:
The words “the death of FDR” in the second line of Jim’s post appear in red because they are a “link”. If you “click” on the “link” with your computer “mouse”, the “Internet” will direct you to another “page” on the “Internet”.
At that “page,” you will find a long quote from a Wall Street Journal article, which explains in great detail how, after FDR’s death, Congress finally reversed many of FDR’s disastrous economic policies, and how these changes, rather than the country’s entry into WWII, finally led to sustained economic recovery.
I’m not demeaning FDR’s leadership in WWII, or his ability to keep up your “spirits…during a long and devastating war.” But that’s no reason to have faith in his disastrous economic policies.
Joe College commented:
Obama will wave this paper from now until election day and then throw it in the wastepaper basket.
You have to wonder if he engineered this, too.
Scott commented:
This news is likely to cause Paul Krugman’s head to explode.
Zachriel commented:
Jim Hoft: It took the death of FDR to lift the United States out of the last Great Depression.
That is simply not factual. GDP bottomed out and unemployment reached its peak in 1933.
GDP
Unemployment
Change in GDP
(The recession in 1937 occurred when the Roosevelt Administration trimmed back on the New Deal, but GDP had already reached pre-Depression levels, in constant dollars.)
F.D.R. in Hell commented:
Actually, it took our getting into World War II to lift us out of the Great Depression. And it took my ignoring warnings of the attack on Pearl Harbor to rally support for our getting into the War.
Now if you’ll excuse me, I have a date with Amelia Earhart.
P.S. Teddy and Murtha say HI and are asking when’s Arlen getting here?
We need a fourth for poker.
Richard Romano commented:
We should salute the fine Canadian Prime Minister, Stephen Harper — a conservative; he’s doing a great job influencing other nations to take austere measures and move away from bloated governments and endless entitlements.
VanZorge commented:
gee, and here i was thinking that i should take a loan in order to pay off my credit cards, which would then free up my credit balance so that i could go out and charge some more things – you mean to tell me that that won’t get me out of debt???
well, i’ll be damned
chuck in st paul commented:
“how could some of the so-called best minds in Europe fall for this tripe” – BarbaraS
It’s easy. Marxist socialism is just another Ponzi Scheme. It looks to work just fine until you run out of OPM. A recession or depression slows or stops the ever increasing income needed to support the scheme then the house of cards comes crashing down. QED.
chuck in st paul commented:
“It appears to me, anyone my generation held as a hero or a leader, your generation wants to demean.” – Mary
That’s baloney Mary. The recession right after WW II was as bad or worse that of 1929, so obviously you don’t remember very well. The period during WW II was merely a temprorary respite driven by war materials production. It did not fix the fundamental issues. Once the Supreme Court threw out most of FDR’s nonsense and America tooled up to produce goods for the restoration of Europe and the rest of the world we came out of the depression/recession cycle.
If you bother to read some accurate economic journals and books on the period from the twenties to the fifties you would know what a disaster FDR was. 1939 was much worse than 1929 and 1946/47 was a terrible time. If you don’t belive it I’ll put you in touch with my Mom and she can share with you the reality of that time.
Oh and BTW… FDR is the guy who gave the Soviets half the Northern Hemisphere to ruin after WWII. Yeah, he sure was a great guy.
Richard commented:
What is wrong do they realize the USA has no more money to give them.