President Obama signaled on Friday that countries in Europe should not withdraw their extraordinary spending programs too quickly.
In a public letter to other leaders of the Group of 20 nations in advance of a summit meeting in Toronto next week, Mr. Obama wrote, “Our highest priority in Toronto must be to safeguard and strengthen the recovery.”
Mr. Obama also addressed currency exchange rates, which are likely to come up at the meeting, and repeated his support for market-based rates, a reference to views that China is holding down the value of its currency.
“This is obviously going to be an issue that we’ll continue to discuss,” a White House spokesman, Bill Burton, told reporters traveling with Mr. Obama to Ohio on Friday, according to the Associated Press.
Mr. Obama also wrote in the letter, “We must be flexible in adjusting the pace of consolidation and learn from the consequential mistakes of the past when stimulus was too quickly withdrawn and resulted in renewed economic hardships and recession.”
That statement represented a signal to Germany and other European countries, which have moved in recent weeks to pare spending, mindful of the wrenching consequences of excessive public debts in Greece, Portugal and Spain. The United States is trying to pare its own substantial deficit. Mr. Obama reiterated a pledge to cut the deficit, now about 10 percent of gross domestic product, in half by the 2013 fiscal year, and to 3 percent of G.D.P. by the 2015 fiscal year, a level he said would “stabilize the debt-to-G.D.P. ratio at an acceptable level” by then.
But American officials are concerned that fiscal retrenchment by too many countries at once could imperil the global recovery.
It's one thing to truly believe that increased government spending actually helps economies, but Obama takes it beyond that and starts lecturing other nations about it. The EU is teetering on the brink of failure because of debt, but if you looked at Obama's remarks you would think they were just being panicky. Europe burns and Obama tells them that now is not the time to stop playing with gasoline.
One has to wonder if Obama is truly ignorant to the problem. Democrats have wracked up incredible deficits since 2007, and continue to pursue expensive measures as if there wasn't a very real, very dangerous problem. He continues to pay lip service the idea of cutting the deficit and the debt, but turns around and offers us expensive budgets and says we need another stimulus.
If Obama understands the problem or not is irrelevant since his ignorance would still be born from his ideological view of economics. Europe and America have problems with spending, and Obama's priorities are set on getting them to spend more money. It defies all sense, and this is what I mean when I use the term ideological.