Looks like Barack Obama has only two remaining allies in his theory that you can spend your way out of debt – John Maynard Keynes, who’s been dead for 64 years, and Greece, which will soon assume economic room temperature.
The Financial Times reports the G20’s return to reality:
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”.
Translation: It’s 2 o’clock in the morning and Barack Obama is the only drunken sailor left in the bar.
Source: Financial Times
