Even with the top economists, except for Obama mouthpiece Paul Krugman, calling for austerity and deficit reductions, team obama is set to push a continue of the massive deficit spending to prop up his artificial "recovery".

Not so fast Mr. President


Germany Rejects Obama's Call on Growth, Stoking G-20 Conflict..

Chancellor Angela Merkel’s government rebuffed U.S. calls to focus on bolstering growth over debt reduction, setting a course for conflict at the Group of 20 summit in Canada this week.

“Nobody can seriously dispute that excessive public debts, not only in Europe, are one of the main causes of this crisis,” Finance Minister Wolfgang Schaeuble told reporters in Berlin today alongside Merkel. “That’s why they have to be reduced.”

Germany is holding to G-20 commitments on exit strategies from fiscal stimulus, and “not violating international requirements for a coordinated strategy for sustainable growth,” Schaeuble said. “We will face up to the international debate and I think we can do that with a great deal of self- confidence,” he said.

Five days before G-20 leaders meet in Toronto, the economic-policy divide between Europe and the U.S. is hardening. President Barack Obama, in a letter to his G-20 counterparts dated June 16, urged a focus on economic growth, saying order to public finances should be restored in the “medium term.”

German Economy Minister Rainer Bruederle, at a separate press conference earlier today, said the U.S. must join Europe in “urgently” cutting spending.

“It’s urgently necessary for monetary stability that public budgets return to balance,” Bruederle said. “This is something we should also tell our American friends.”

Canada’s ‘Minimum’

Canadian Prime Minister Stephen Harper, in his own letter to G-20 counterparts, said June 18 that he wants leaders to agree to a target of reducing their deficits by half by 2013, and to stabilize or begin reducing their ratios of debt-to- output by 2016.

The European Union is “somewhat wary” of these targets because Europe’s goals are more ambitious, according to a senior EU finance official, who said the proposals by Canada should be the “minimum.”

“A number of advanced countries will have to go further,” said the official, who spoke to reporters in Brussels today on the condition of anonymity. “For us, it has to be absolutely clear that this is a minimum.”

European G-20 members will make deficit reduction a central theme in Toronto, Merkel said June 19 in a video message on the Internet.

“We will talk about when we’ll switch from the phase of economic stimulus programs toward lasting budget consolidation,” Merkel said. “In the opinion of Europe’s participants, and especially Germany, this is urgently necessary.”

‘Unity of Purpose’

Whereas Obama called on the G-20 to reaffirm its “unity of purpose to provide the policy support necessary to keep economic growth strong,” Merkel said that “it’s not about growth at any price, it’s about sustainable” growth.

She said June 11 that she expects to have a “hard time” at the summit, with pressure from fellow leaders to spend to boost growth while she sees “no alternative” to budget savings.

Nobel prize-winning economist Paul Krugman said the U.S. isn’t worried about “loose monetary policy” and said it would be a risk for the euro region to allow Axel Weber, president of the Bundesbank, to succeed Jean-Claude Trichet as head of the European Central Bank, German newspaper Handelsblatt reported

“If you’re looking for somebody who aims at an inflation rate of zero percent while unemployment rises to 13 percent, then Weber is certainly the right man,” the newspaper quoted Krugman as saying.

http://www.bloomberg.com/news/2010-06-21/u-s-urgently-needs-to-reduce-deficit-economy-minister-bruederle-says.html

priorities are hard to agree upon at any level

Id be happy with economic growth OR deficit reduction, I really dont care in which order

kind of like in my home, would I rather get a raise or pay off my debts? either one would be great but it may be easier to do the latter if I accomplish the former,,,

'The UN' better get used to rejection ... the world - and everyone else - has him figured out ... he's an unqualified little boy in short pants playing 'president' and his incompetence is just overwhelming in its scope and depth ... he is ALWAYS the LEAST competent person in any room he enters ... The Germans are just the latest and loudest to tell him 'Stuff it where the sun don't shine' ... there'll be a whole lot of others - inlcuding the members of his own 'Partei' ... especially when it gets closer to the November elections ... Let's start gettin' the 'Goodbye!' signs ready ... Meanwhile, don't waste time holding your breath waiting for him to 'accomplish' anything significant - if he can't steal it or 'redistribute' it (like there's a difference?), he doesn't know how to do squat ...

I find this part of the article the most important.

“Nobody can seriously dispute that excessive public debts, not only in Europe, are one of the main causes of this crisis,” Finance Minister Wolfgang Schaeuble told reporters in Berlin today alongside Merkel. “That’s why they have to be reduced.”

If this is true, and In my opinion it is, we would already be in full on recovery mode. I can't fault Obama for the massive debt he inherited, but based on the facts at the time, his substantial increase in it was certainly irresponsible.

I'm sure the "he kept us from a depression" argument is coming from someone, so to preempt that, by saying that during the real great depression FDR tried spending his way out of it and it failed miserably. Some would argue it made it much worse.


As an example... If you made $100,000 per year and had $150,000 in debt that you paid interest on, at what point would you find that type of lifestyle unsustainable?

Would you say that right now it doesn't matter because I might get a raise 2 years from now?

no, Id never say it didnt matter,,, but would it matter as much as having the money to feed my family THIS month?

Good for Merkel. That's one of the few remotely smart things one of the Elites of the PIGS (Portugal, Italy, Germany, Spain) have said lately.