The Economic Summit
In normal times we don’t expect a lot from summit meetings. But with the global economy imploding, leaders at Thursday’s meeting of the world’s top 20 economic powers had an urgent responsibility to come up with concrete policies to fix the global financial system and restore growth. They fell short.
The meeting certainly produced more than the usual photo ops and spin — and its participants did not go away yelling at one another as they have in the past. The leaders pledged to fight protectionism and to help badly battered developing countries and — putting their money where their mouths are — committed $1 trillion for loans and trade guarantees. The group also agreed to crack down on tax havens and, on a country-by-country basis, impose stricter financial regulations on hedge funds and rating agencies — necessary though insufficient steps to avoid a repeat of the current disaster.
Where they fell dangerously short was their refusal to commit to spend the hundreds of billions of dollars in additional fiscal stimulus that the world economy needs to pull out of its frighteningly steep dive. With consumer spending and business investment collapsing around the world, rich countries are the only ones that have the resources to do what is needed.
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