Barack Obama sent a letter to G20 leaders this week urging them to continue to run massive budget deficits in order to “keep economic growth strong.” Obama believes that running high deficits will actually improve the economy. However, European and Chinese leaders disagree with Obama on this dangerous path of economic destruction. They are working to reduce deficits in their countries.
Barack Obama is having a difficult time talking world leaders into continuing to pile up massive budget deficits.
He tripled the US deficit his first year in office.
The AP reported:
The president noted that “significant weaknesses” linger among the major and developing economic powers. He told his summit partners “it is essential that we have a self-sustaining recovery that creates the good jobs that our people need.” The White House released a copy of the letter on Friday.
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In the letter, Obama said that the June 25-27 summit should also focus on efforts to stabilize public deficits in the “medium term,” a reference to the administration’s position that governments need to run huge deficits currently to provide the stimulus needed to ensure a sustained recovery but then move in future years to deficit reduction efforts.
But several European nations including Germany, France and Britain are already moving to attack high deficits in an effort to calm global financial markets which have stumbled in recent weeks over concerns that Greece or other highly indebted nations could default on their loans.
Obama is having a tough time making the argument for increased deficit spending at home as well. The Senate has blocked a scaled-down jobs bill with critics complaining that the $120 billion pricetag is still too high.