March 12, 2009

• The US to Other Countries: How DARE you guys not spend money?

  Trust me, I’m not much of an economic Conservative at all, and I think the Stimulus bill makes a lot of sense even though it could have been better. So far I think the Obama administration has been doing an ok job on the economy, far from great but not as bad as during the last months of the Bush administration. Will it work? I have no idea.

  But anyway sometimes the US just disturbs me in its attitude toward the rest of the world and in this the Obama administration is no different. News reports show that when the US meets with the G20 they’re main point is going to be pushing the other nations to use more money to stimulate their economies. We’re going to be lecturing them about how they aren’t doing as much as us.  And ironically in the news just now I heard the justification for this policy is that the Obama administration thinks the American people will get pissed off if we feel we’re doing our fair share to help but other countries aren’t.

  Whether it’s our administration or our people, that’s just unbearably ARROGANT. We CREATED the crises. We did. Just us. It’s entirely unarguably our fault. And yet we want to claim the high ground? Ridiculous!

  We want other countries to spend proportionally as much as we do, but… does that make sense? Surely we should spend considerably *more* to help get the global economy back on track if only out of a sense of guilt and responsibility.

  Moreover, it’s considerably easier for some countries to give than others. And in particular, the US in its position as having the reserve currency has it easiest of all economically. We can borrow with impunity. Maybe we shouldn’t, that’s another debate, but certianly we can.  Other countries, however, that’s not necessarily the case. Some are rich enough that they can pay outright for stimulus through surpluses they’ve kept in the past, but those who don’t have that kind of ready cash on hand can’t really borrow like we can. They don’t have the dollar. Nor do they necessarily consider it a good idea.

  And here’s the other thing, if we really think stimulation is the best investment of our money for the long term, surely we should laugh when other nations unwisely refuse to stimulate their economies. Yes we’re all connected but we’ll come out ahead in the end if monetary stimulation really is the best policy. The fact that we are so adamant could mean either that we’re really altruistic or we aren’t that confident in our own strategy and want other nations to take an equal risk.

  Of course the other nations are actually making a good amount of sense. Yes stimulus is an important part of the agenda, but what’s REALLY important is redesigning the system from the ground up. To create a more balanced world where these kinds of economic catastrophes are less likely to happen. That in itself will help stimulate the economy by making investers more confident in the system itself.  The reason that’s not important to Americans of course is that it likely will mean a lesser role for the United States in driving the direction of the World Economy. Don’t get me wrong, we’ll still have a huge role, but it might be one of first amongst equals rather than the sole super power economy like we are now.

  Other countries really should contribute a lot to getting us out of this economic crises. Some need to do more than they are doing now, including the US. But more importantly, the United States needs to get off its high horse first. Nobody wants to hear us lecture to them about what’s the right thing to do. Nor should they. Nobody will listen to us at all until we do that.

  • 11:34 am
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