For those on the right who are promoting hard cuts, keep repeating those claims because there’s very little doubt of a double dip arriving in Europe. It will be more shocking if it doesn’t happen. I’ve spent the last week traveling in two countries who are in the thick of this discussion and for most everyone the talk is when, not if. The Tories brought on their familiar nasty face earlier in the week with their chopped budget. The consensus there seems to be more pain for the middle class who are going to take on the brunt of the pain, again.
While down in Portugal, I was told that 2009 produced record number of millionaires. (I believe I saw a similar report out of the US recently as well.) The middle class is shrinking and the top and the bottom are growing. When the next drop comes, those promoting austerity will be locked in to harsh cuts and it’s going to be too late to change course. The US needs to be very cautious in this environment. It’s completely false and out of touch to suggest cuts (or limits) will not impact the economy. The cuts do have an impact and we’re going to be seeing the results of these actions soon. The Guardian:
Signs of deep rifts at the G8 and G20 summits in Toronto over how quickly governments should cut deficits added to financial market jitters today, with the Americans warning of the dangers of a double dip recession if all countries started to rein back spending at once.
The leading European economies, especially Germany, are putting a new emphasis on cutting back government spending, and there is a possibility that a G20 communique, due to be released on Sunday , will set out an indicative timetable of how far and fast countries should retrench spending.
David Cameron, making his first appearance at a world summit and packing in a frantic round of bilaterals to start building personal relations, was praised by the summits’ host for his deficit slashing budget earlier this week.