Just what Kool-Aid are they drinking in the White House? The question is occasioned almost daily now, but today’s issue isn’t Afghanistan, the oil spill, or health care reform. The Kool-Aid question arises today in the antics leading up to the upcoming G-20 meeting in Toronto.
According to press reports, Obama is pressing Europe to focus more on sustaining their deficit spending rather than debt reduction. Germany, Europe’s de facto bailout banker-in-chief, has essentially responded, “Are you nuts?” Wolfgang Schauble, Germany’s Finance Minister diplomatically told reporters in Berlin,
Nobody can seriously dispute that excessive public debts, not only in Europe, are one of the main causes of this crisis.
Europe is faced with a financial meltdown due to excessive government spending. The euro itself may not survive in its current form. Governments across the continent are frantically crafting austerity packages and unwinding anti-growth socialist policies in a desperate attempt to convince creditors to continue to buy and hold their sovereign debt. The Europeans know full well the U.S. must also slash spending for these measures to be effective. Note the words “not only in Europe” in the Schauble quote. This is squarely directed at the United States.
In the face of these painful steps across the Atlantic, the U.S. President responds with a refrain vaguely reminiscent of that great Longfellow poem, quoted by President Roosevelt to Winston Churchill in a famous missive sent during an earlier dark hour. The Obama version, however, strikes a somewhat different stance:
Spend on, oh Ship of State,
Spend on, oh debtor strong and great,
Creditors with all their fears
Are quaking nervously on ye profligate
In Obama’s defense, at least in observing his management of the federal budget one can credit him for practicing what he preaches. This, of course, conflicts with the message Germany is trying to send. Rainer Bruederle, the German economics minister observed the U.S., too, must join with those in Europe setting aside their rigid ideologies and “urgently” cut spending.