During the recent G-8 summit, after the world leaders agreed on the “easy” stuff such as sanctions on Iran and North Korea, there was a clear divide among the US and the others. With the belief that the US sparked the global recession coupled with the recent bankruptcy of the Greek economy, the call by Obama to keep deficit spending up by all nations was not received with complacency.
World leaders know the value of their fiat currency is largely subjective. China has demonstrated how well it can manipulate its currency to keep their exports cheap. The current request by the US is an attempt to enable continued deficit spending on large initiatives such as Health Care without weakening the US Dollar substantially. As more money is printed by all nations without any commodities to back the currency, it is the middle class families with savings who are penalized the most.
A sound fiscal policy is at the heart of every stable nation and instead of learning the lessons of Greece et al. the addiction to spending is overpowering to US politicians. Instead of promoting a “we suck less” attitude in the global economy, the US needs to lead by example to rein in spending and strengthen the Dollar by making the country a more business friendly place to create more jobs. Republicans are guilty of over spending as well so there is plenty of blame to spread around. For starters, the US needs to assess what global military footprint needs to be maintained. Pulling the 100,000+ troops from fellow G-8 nations, Germany, Japan, Britain and Italy would be a good start but one that Republicans would generally not favor.
