|Davos--site of World Economic Forum|
Timothy Geithner , US Treasury Secretary said that cutting spending at a time when the US was "recovering" would be "irresponsible". The United States annualized rate of 2.6 percent has risen to 3.2 percent from last quarter. Cameron and Osbourne (the Prime Minister and the Chancellor of the Exchequer, respectively) insisted that their 81 billion pound cuts in spending was the only prudent thing to do. Geitner insisted that to cut spending at a time when the economy was just beginning to recover would be a "mistake" and that "governments ..stop too soon , to shift to restraint too early at the first signs of life." The British economy has shrunk by .5 percent in the final quarter of 2010 and the fear of a double-dip recession is a possibility. Cameron stated that "Our first priority is to kill off the spectre of massive sovereign debts. My argument is that you cannot put it off."
The OECD (Organization for Economic Co-operation and Development) stood by Britain's plans for fiscal restraint and cuts. But the billionaire investor, George Soros said such a move would trigger a new recession.
The word in Europe at the moment is how America is losing its credibility as a viable economic force. America is in debt by 1.5 trillion dollars. While America has had a history of being the country that is "good as gold" on honoring its debts and the paradise for investors, it stands to lose this. At the moment, the United States is looking like the cousin who shows up in a pink cadillac filled with bags of shopping from Neiman Marcus, but her house is about to be foreclosed. Our allies are looking to other countries to invest in...they are looking to China and India.
Geitner insists that the deficit will be dealt with..."later".
(America...that's why we aren't very popular on this side of the pond.)
One thing that the members who attend this very exclusive annual economic forum could do next year is to hold the meeting in a Swiss "Holiday Inn" instead and donate all the sybaritic sums of money they fork out to attend these brain-massaging forays toward paring down the deficits of their respective countries. Instead of being entertained by Bono, and dining on caviar, they could watch re-runs of "Gunsmoke" dubbed in German, send out for pizza and then go down to the hotel bar to down shots with their colleagues. Then, Geithner and Osbourne could arm-wrestle to see whose deficit-spending scheme would be the best one to adopt while Sarkozy can sit and regale the hostess at the bar with how "Frenchmen" are much better at balancing budgets than the Brits and the Yanks...and could he take her up to his room to see his spending cuts? And Angela Merkle sits visibly miffed that no one wants to arm-wrestle with her.
By the way, on that wrestling...I'd make it two out of three, boys. Just to hedge all bets.