State money will be rolling around the world

The chief economic policy adviser to U.S. President Barack Obama, Larry Summers, calls for a global expansion of government spending to promote economic activity. A short-term increase in demand through additional expenditure was currently more important than the fight against inequalities in the global economy, Summers told the Financial Times.

Previously, you always have more demand in China and less spending in the U.S. demanded. “Nobody believes that now is the right agenda,” said Summers. At the moment no country should contribute to reducing global demand. Medium term should certainly not about his life circumstances, short-term, however, a significant increase in expenditure is necessary.

With his call buzzer, the G20 is under pressure. The Heads of State and Government of the 20 largest economies in the world meet on 1 and 2 April in London to discuss the financial markets and the world to advise. It is the first major international conference, attended by Obama participates. “The right macro-economic focus for the G20 refers to the global demand, and the world needs more demand,” said Summers.

China, most countries of the European Union and the U.S. have already carried out extensive economic programs. In Germany, for example, but so far there are no plans for a further increase in government spending on the two programs also decided economy.

At a preparatory meeting for the London Summit, where even a total 24 countries will be represented, it was agreed that the situation of the real economy on a large area should occupy. Germany and other countries, according to penetrate from G20 circles but that at the first meeting in Washington in November agreed to plans to stabilize the financial markets concretised and then be implemented. The summit will also discuss whether to invest to avoid CO2 emissions can be strengthened.

Summers said that the view that markets automatically stabilized, had a “fatal blow” suffered. Although this principle applies generally, but a few times in every century. Now is the time for “extraordinary public action.”