G20 Drops Obama's Keynesian "Spend Your Way Out of a Recession" Economics
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.