But the insertion of QE2 into the negotiations was not the reason that the United States came away with so little at the G20 meeting in South Korea. The same thing happened at the previous Q20 meeting in Canada and there was no QE2 then. As I wrote at the time of the Canadian finance ministers and central bank governors meeting, the problem with the U.S. position then and now is that the idea that more deficit spending stimulus is needed to increase demand is an idea that other countries strongly disagree with, and in my view they are right. Indeed, the G20 has been getting on the right track despite the U.S. position. The United States was able to sell stimulus packages to the G20 in early 2009, but most see that it has not done much good and has made the debt higher. The way to have a more successful G20 meeting in France next year is for the United States to go with a credible plan to reduce the budget and stop increasing the debt.
Monday, November 15, 2010
John Taylor offers a precise analysis of the US administration's unconvincing performance during the G20 meeting: