Check Please! Can’t We Go Dutch On The World Economy?
Are you that friend that always picks up the bill for lunch or dinner? The kind whose friends are never at a loss to tell you how well their doing but suddenly go blind when the check arrives? Well, now you know what it means to be the U.S. economy. Yes, yes, we can read about the very fine numbers regarding other nations’ trade surpluses or their financial discipline but the plain fact of the matter is that it is the United States through investment that picks up the tab for the global economy.
And wouldn’t you know it was our ‘ol best pal Canada who finally said “enough.”
“America is carrying the world economy at the moment, that is simply not sustainable,” said Canadian Finance Minister Joe Oliver, before flying to Turkey to take part at the G20 meeting of finance ministers and central bank chiefs. “We need key pillars of global growth to reassert themselves.”
Translation: Pay up, bros!
This is especially critical given that the global economy seems to have stagnated. Europe and Japan are still struggling—don’t get us started on Greece—and China failed to reach its annual growth target of 7.5 percent for the first time in 16 years.
“There is a lot at stake. Without action, we could see the global economic supertanker continuing to be stuck in the shallow waters of subpar growth and meager job creation,” said International Monetary Fund Managing Director Christine Lagarde in a blog post before the two-day G20 meeting which concluded Tuesday.
While U.S. Treasury Secretary Jack Lew said the U.S. and American investors would, as usual, do their part, the United States could not be “the sole engine of growth.” And while, in the recent past, much of America’s critical comments economically have been directed toward China, when it comes to not pitching in, the U.S. actually fixes most of its gaze toward Europe … and some of Europe agrees.
“We need to be bolder in Europe in terms of risk taking … I hope that policy action will indeed facilitate stronger private sector investments, especially infrastructure investments,” said Italian Economy Minister Pier Carlo Padoan to a financial gathering in Istanbul.
In fact, there was enough of that sentiment that a proposal was put forward to set specific investment targets for specific countries intended to spur economic activity but which only seemed to spur countries to excuse themselves from the table.
Germany argued that it was doing what it could while France argued that setting targets would be theoretical and “quite complicated.”
Translation: “Yes, yes, certainly, why would anyone want to make the machinations of a global economy, involving billions of people and trillions of dollars, into something complicated? Let’s keep this simple, shall we? Hey America, you got this? Check!”