David Lipton, IMF First Deputy Managing Director writes that when G20 leaders met at the height of the GFC they had two simple objectives: i) to resolve the crisis; and ii) to make sure it did not happen again……..
Progress has been hard in part because the measures called for under each agenda item to some extent undermine the other agenda item. The first objective, exiting the crisis requires strong enough demand to restore growth and jobs. At the same time, the second objective, ensuring sustainability and laying the foundation for a stronger global economy, requires deleveraging in many advanced economies, which will dampen demand, particularly if it happens simultaneously in many sectors in many countries.
Lipton points out that the actions of all major players impact on each other. He calls for deficit countries to continue fiscal consolidation and private sector deleveraging “in a sustainable way” and for “structural reforms to improve competitiveness”. Surplus countries also need to cut back on “reserve accumulation” and allow “more exchange rate flexibility”.
Yes, Mr. Lipton…….”Charge on G20 with your deleveraging genocide”.
I say—- What has happened to miss “Liberty”, it has been an instantaneous and silent death; she was executed by the state.
ehmu