By Ian Swanson - 06/23/10 08:34 PM ETSo much for the fools who insist that the US is "the last fortress standing."
The U.S. will be isolated at the G-20 summit on the subject of stimulus spending.
In the days ahead of this weekend’s summit, President Barack Obama and his economic team have pressed Europe and Congress alike on the need for more spending to drive economic growth.
But huge gaps have emerged between the Obama administration and allies in Europe.
Germany, France and Great Britain have all launched austerity campaigns designed to reduce public debt. They’re motivated in part by the Greek debt crisis, which continues to scare countries across Europe.
“In the run-up to the summit, a clear plurality of G-20 countries has come up on the side of fiscal consolidation and not stimulus spending,” said Dan Price, a senior partner at Sidley Austin and former President George W. Bush’s “sherpa” for G-20 summits.
Japan has also introduced a strategy to reduce its budget deficit, while Canadian Prime Minister Stephen Harper, who is hosting the summit in Toronto, has challenged G-20 members to cut their deficits in half.
The motivation for the Obama administration is different. In less than five months, voters will elect a new House and Senate, and Democrats are in danger of losing their majority in the House.
Higher unemployment figures this summer will hurt the Democratic case this fall, which makes it tougher to argue against spending that could increase employment.
We're the ones who are trying to bring everybody else down!