Christina Romer
The Obama Administration continues to spend money faster than anyone other than Paul Krugman and his ilk could imagine or wish.
Increasingly, the rest of the world is seeing this behavior as adding to the problem rather than a solution. The following quote from an article in the Financial Times provides an example of the growing dissatisfaction with the Obama Administration’s economic policies:
Public spending cuts and tax increases should be imposed immediately across the industrialised world as evidence of a healthy European recovery mounts, according to Jean-Claude Trichet, president of the European Central Bank.
In a strident article for the Financial Times, Mr Trichet argues that policymakers who want to prolong the stimulus are mistaken and that cutting borrowing would have “very limited” effects on growth.
Trichet, of course, is correct for criticizing our behavior. That is of no matter to the U.S. political elite who continue to burden future generations with debt in a hopeless effort to avoid the inevitable.
It will be of interest to see how Europe actually behaves as opposed to how it speaks. The economic crisis they have is not over. Their banks and several individual countries have severe insolvency problems that could flare up at any moment. Perhaps Trichet differentiates between fiscal policy and monetary policy. Regardless, they have major problems still unresolved. When they metastasize European political cowardice likely will produce policy actions not inconsistent with those currently being criticized.
“Public spending cuts and tax increases should be imposed immediately across the industrialised world…”
And he means it too. Except for the part about public spending cuts.