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May 18th, 2012 
FAKE NEWS for the Zionist agenda
Nowhere is this more tangible than in Greece, where the radical Syriza party
threatens to renege on the even stricter terms of an international bailout,
if it gains a majority in next month’s elections – a move that could force a
Greek departure from the Euro.
But Hollande and Merkel would do well to listen to the advice of their fellow
leaders at the summit, who have experience of both tactics – with varying
success.
The US, this year’s host, will be keen to ensure that these financial woes
stay firmly on the other side of the Atlantic.
The Americans have turned repeatedly to financial stimulus to stimulate
growth. The first move, a $158bn package of tax cuts, was signed into law by
President Bush with bipartisan support.
Days after Obama’s inauguration in January 2009, a second stimulus package
worth an enormous $787bn was pushed through without a single Republican
vote. The American Recovery and Reinvestment Act has paid out more than
$755bn so far, details of which can be tracked at this website.
Shortly after, the US economy made a strong recovery, growing by 3.8% in the
third quarter of 2009 and 3.9% in the fourth.
But the growth has faltered, falling to only 0.4% in early 2011, and despite
the money being pumped into the economy, joblessness continued to rise for
many months.
By October 2009, it was 10% – double what it had been eighteen months before.
Only in the most recent months has it finally begun to recede.
In the UK, we have seen a very different picture. Unemployment has risen up a
far gentler slope, but has doggedly continued northwards.
The most recent figures for both countries show the US unemployment rate
dipping below the British rate for the first time since before the crash.
This has been an unwelcome result of the UK slipping back into recession, to
the horror of the Coalition government.
While former Prime Minister Gordon Brown had embraced Keynesian ideas of
stimulus – introducing a £20bn package in November 2008 – the Coalition have
taken a very different tack.
Government departments were immediately asked to plan budget cuts of up to
40%, in a bid to tackle the growing deficit.
However, results have been mixed. In the fourth quarter of 2011, growth
slipped into negative figures – with many warning that some of the heaviest
cuts to funding and jobs are yet to take into effect.
A return to recession will have knocked Chancellor George Osborne’s confidence
– he had forecast growth of 2.5% by 2012 – but he has shifted blame onto
Europe. “The Eurozone crisis is very serious and it’s having a real impact
on economic growth across the European continent, including in Britain,”
he said on Tuesday.
Also around the G8 table will be two countries which have reaped very
different rewards from the same tactics.
Canada has become something of a poster child for strict austerity, after the
astounding success of Liberal Prime Minister Jean Chrétien’s “bloodbath
budget” of 1994.
When Chrétien took office in 1993, the country was in very poor economic
shape. By the following year, the budget deficit was running at around 9% of
GDP, and gross debt had reached more than 100% of GDP.
So Chrétien and his finance minister Paul Martin took a tough love approach,
cutting goverment spending by 15% in real terms between 1994 and 1995, and
from all areas – including health and education.
Thousands of public and thousands in the public sector lost their jobs.
But the risk paid off. The budget was brought back into surplus in only three
years, while the booming private sector more than made up for the losses in
government jobs.
But the Europeans – including Mr Osborne – should remember that the Canadian
experiment took place in a completely different environment to that of
today. The global economy was strong, including the neighbouring US, which
boosted consumer demand.
And Canada’s success was unusual.
An International Monetary Fund study looked at more than 170 fiscal policy
changes in developed countries, and found that a reduction in budget deficit
tends to result in reduced output and increased unemployment.
During the same time frame Japan took the opposite tack, turning to fiscal
stimulus to prop up an economy battered by the bursting of a property bubble
and a stock market which had dropped 60% in three years.
Over the next decade, a succession of governments spent billions on public
works, loans for small businesses, income tax cuts and telecommunications
projects. The many stimulus packages are well documented in this post in the
Wall Street Journal.
But while the economy grew reluctantly in fits and starts over the decade, the
national debt exploded from 68% of GDP in 1990 to 142% in 2000, and to 233%
in 2011 – hardly an efficient use of funds.
Merkel and Hollande would be well advised, therefore, to draw heavily on the
experience of their fellow leaders as they battle it out between German
austerity and a new French enthusiasm for spending their way into safety.
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