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Morning Bell: The G20 Threat to Economic Recovery

Posted By Conn Carroll On April 1, 2009 @ 8:10 am In First Principles | Comments Disabled

The official G-20 talks that President Barack Obama is in London for today do not begin until tomorrow. But outlines [1] of the deal President Obama and other world leaders will agree to have been noticeable for weeks … and it is not good news for the American people.

From the beginning, the Obama Administration and European Union leaders have been clear about what they wanted from Thursday’s meeting. Obama wants European nations to engage in more deficit spending (even though they have to pay significantly higher interest rates) to help jump start the global economy. EU leaders want firm commitments from the Obama Administration to agree to global financial regulation. Slowly but surely the two sides have come together.

For example, on March 14 [2] German Chancellor Angela Merkel said she would not enact any further economic stimulus until the first round had time to take effect. But just twelve days later [3] Merkel injected 82 billion euros ($110 billion) into the German economy, the largest bout of European stimulus spending to date.

Returning the favor, U.S. Treasury Secretary Timothy Geithner signaled the Obama Administration was more than willing to submit to global financial regulations telling reporters: “Our hope is that we can work with Europe on a global framework, a global infrastructure which has appropriate global oversight. [4]” This is just about the worst agreement [5] that the summit could possibly have produced. It’s the worst of both worlds: more so-called stimulus spending for everyone, a globalization of Europe’s slow-growth economic model, and a subversion of U.S. sovereignty by a new global super-regulator. Heritage analyst Theodore Bromund explains [6]:

Europe’s call for a global regulator with a mandate to ensure the stability and balance of the world economy would be a tremendous step toward forcing its slow growth model on the rest of the world. … These policies are a return to the concept of one size fits all and to the belief that politicians and unelected bureaucrats on the global level can effectively manage the world’s economy. Europeans should ask why, if this model works so well, it failed to stop the build-up of systemic risk in Europe.

Instead of more deficit spending and increased bureaucratic control G-20 nations should be working to fight rising protectionism worldwide [7] and addressing the common entitlement crises [8] that they all share.

Quick Hits:

  • Ranking House Budget Committee member Paul Ryan (R-WI) released numbers [9] today showing his alternative budget achieves lower deficits than the Obama Administration’s plan in every year, and by 2019 yields half the deficit proposed by the president.
  • After Justice Department lawyers concluded that the left’s D.C. House vote bill was unconstitutional, Attorney General Eric Holder overruled their determination and ordered up a second opinion [10].
  • Health and Human Services Secretary appointee Gov. Kathleen Sebelius (D-KS) became the fifth Obama Administration cabinet appointee to admit to failing to pay taxes [11].
  • The Obama Administration announced they will play a key role [12] in naming members to General Motors Board of Directors.
  • A Milwaukee Journal-Sentinel [13] analysis found that the vast majority of Wisconsin bridges slated for economic stimulus funding carry fewer than 1,000 vehicles a day, including one bridge awarded $426,000 that gets fewer than 10 cars a day.

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2009/04/01/morning-bell-the-g20-threat-to-economic-recovery/

URLs in this post:

[1] outlines: http://www.foundry.org/2009/03/19/the-outlines-of-the-g-20-deal-emerge-and-they%E2%80%99re-not-good/

[2] March 14: http://www.number10.gov.uk/Page18617

[3] just twelve days later: http://www.bloomberg.com/apps/news?pid=20601109&sid=an0ME5IcV5bY&refer=home

[4] Our hope is that we can work with Europe on a global framework, a global infrastructure which has appropriate global oversight.: http://www.telegraph.co.uk/finance/financetopics/g20-summit/5057267/G20-summit-Timothy-Geithner-calls-for-global-regulation.html

[5] the worst agreement: http://www.foundry.org/2009/03/30/do-as-they-say-not-as-they-want-to-do/

[6] explains: http://www.heritage.org/Research/Europe/wm2369.cfm

[7] to fight rising protectionism worldwide: http://www.heritage.org/Research/tradeandeconomicfreedom/wm2366.cfm

[8] addressing the common entitlement crises: http://www.foundry.org/2009/03/20/global-financial-crisisminnow-entitlements-crisiswhale/

[9] released numbers: http://online.wsj.com/article/SB123854083982575457.html

[10] overruled their determination and ordered up a second opinion: http://www.washingtonpost.com/wp-dyn/content/article/2009/03/31/AR2009033104426.html

[11] the fifth Obama Administration cabinet appointee to admit to failing to pay taxes: http://latimesblogs.latimes.com/washington/2009/03/kathleensebeliusanotherobamacabinetscofflaw.html

[12] key role: http://www.washingtonpost.com/wp-dyn/content/article/2009/03/31/AR2009033101521.html

[13] Milwaukee Journal-Sentinel: http://www.jsonline.com/news/wisconsin/42103902.html

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