Editore"s Note
Tilting at Windmills

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November 11, 2010

OBAMA REMINDS G20 ABOUT ECONOMIC PRIORITIES.... For the better part of 2010, much of the West has embraced austerity measures in the wake of the global financial crisis. And for the better part of 2010, President Obama has reminded allies that such efforts are a mistake.

To his credit, Obama continues to take the right message to the world.

President Barack Obama, in a clear message to other leaders at the G20, said on Thursday that the best way to control the massive U.S. budget deficit was to help the economy grow faster.

"The single most important thing we can do to reduce our debt and our deficits is to grow," Obama said in his first public response to bold early recommendations from a White House debt panel that was quickly attacked by U.S. lawmakers.

Obama has been forced to defend U.S. policies blamed for pushing up the U.S. budget deficit, while other Group of 20 partners, such as Britain and Germany have embarked on harsh spending cuts.

U.S. officials say this is exactly the wrong thing to do while a global economic recovery is still fragile, and Obama has stoutly defended a decision by the U.S. Federal Reserve to print another $600 billion to spur U.S. growth.

Good for the president. It seems like common sense -- it's a lot easier to reduce a deficit when an economy is growing and more people have jobs and can pay taxes -- but it's a point that's too often overlooked, especially in countries where austerity measures are all the rage.

What I'm especially pleased with is the administration's consistency on this. President Obama and Treasury Secretary Tim Geithner have both been making the case to the G20 all year about the need to prioritize growth over short-term deficit reduction.

It's hard to say whether anyone's actually persuaded by the message, but I'm glad the administration is sticking to it. The White House might even try to making it more often to domestic audiences, many of which still think more jobs will be created if we take money out of the economy and make things harder on the middle class.

Steve Benen 9:50 AM Permalink | Trackbacks | Comments (10)

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Yeah, if Europe keeps on this austerity kick, Republicans might actully start to not denigrate everything European.

Posted by: c u n d gulag on November 11, 2010 at 9:59 AM | PERMALINK

It would be particularly nice if Obama would deal with the GOP with the right economic principles front and center. The word "compromise" should not be used in the next 2 years. And why did he appoint the Catfood Commission again?

Posted by: Terry on November 11, 2010 at 10:01 AM | PERMALINK

If Geithner is in favor of it, it is probably fucked up!

Posted by: AngryOldVet on November 11, 2010 at 10:06 AM | PERMALINK

There is no way that the U.S., or any other country, is going to be able to "save" their way out of this mess.

A radical restructuring of the global order is needed, and everyone is still firmly in the denial stage on this issue.

Posted by: bdop4 on November 11, 2010 at 10:36 AM | PERMALINK

"It seems like common sense -- it's a lot easier to reduce a deficit when an economy is growing and more people have jobs and can pay taxes -- but it's a point that's too often overlooked, especially in countries where austerity measures are all the rage."

The problem is its not "common sense". Increased government spending during an economic downturn is counter-intuitive to most people who haven't studied economics or thos who ahve but don't believe in some form of the Keynesian model. People work and live on a micro-economics model, which has very different principals at work. Its sort of like saying the principals of relativity are common sense to people who've spent their whole lives living in an apparently Newtonian world.

Posted by: kahner on November 11, 2010 at 10:45 AM | PERMALINK

This is one place I am thankful Obama learned something from Reagan. Why Republicans (and Europeans) want to adopt the Jimmy Carter position on this is beyond me though.

Posted by: Th on November 11, 2010 at 11:22 AM | PERMALINK

What I'm especially pleased with is the administration's consistency on this. President Obama and Treasury Secretary Tim Geithner have both been making the case to the G20 all year about the need to prioritize growth over short-term deficit reduction.

They failed to add that TAX CUTS DO NOT PRODUCE ECONOMIC GROWTH.

Posted by: Joe Friday on November 11, 2010 at 11:27 AM | PERMALINK

"It seems like common sense -- it's a lot easier to reduce a deficit when an economy is growing and more people have jobs and can pay taxes"

Only if those incremental jobs are being grown in the private sector!

Posted by: CT Voter on November 11, 2010 at 11:35 AM | PERMALINK

Terry: And why did he appoint the Catfood Commission again?

Because when a leader doesn't want to deal substantially with a particular issue, but can't afford to ignore it politically, one tactic is to give it to a powerless committee.

Posted by: cr on November 11, 2010 at 11:43 AM | PERMALINK

It's too late to sell this message to the American people. The GOP has been successful at pushing the panic button on the deficit, and this panic was fueled further by yesterday's budget-cutting proposals from the deficit-reduction commission. The Republicans have been smarter than the Democrats in selling their economic message. The GOP has ignored Economics 101 and instead made the "common sense" argument that the government is just like the average American household: if it takes in less money, it has to spend less. It's economic idiocy, but it makes sense to the average voter. The GOP has now succeeded in setting the stage for the dismantling of the social safety net, which has been its dream for years, and its insane economic policies will make economic recovery nearly impossible. Another fine job of messaging by the Democrats.

Posted by: ameshall on November 11, 2010 at 12:26 PM | PERMALINK
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