Posted on 08/31/2006 10:43:50 AM PDT by blam
UN study knocks Japan and Germany
German shoppers need to buy more imported goods, the report says Japan and Germany need to do more to help stimulate the world economy, a United Nations report has warned. The study said that the US was having to shoulder too much of the burden of sustaining worldwide demand for goods and services.
With the Japanese and German economies underperforming, the report warns that any big downturn in the US could have serious global repercussions.
It said Japan and Germany needed to lower their trade surpluses.
The annual development report, issued by the UN Conference on Trade and Development, it said both countries should start buying more imports.
It pointed to the contrast between Japan and Germany's large trade surpluses, and the US's record trade deficit.
'Warning signal'
"It's a big credit to the US economy that it has been providing the growth impetus while some parts of the world have not been participating, like Europe," said Supachai Panitchpakdi, Unctad's head.
He warned that America's trade deficit - $160bn (£84bn) in 2005 - needed to be reduced, and that Americans could not continue buying so many foreign goods forever.
Mr Panitchpakdi said the issue was now so serious, the time had come to issue a "warning signal".
He said economies in the developing world will significantly suffer if the US cuts its overseas spending and other developed nations - most notably Germany and Japan - do not pick up the slack.
A spokesman for the German Economics Ministry rejected the suggestion that his country was not doing enough to stimulate world trade.
He added that the German economy grew 0.9% in the second quarter of 2006, its fastest pace in more than five years.
The Japanese economy is also continuing to recover after a number of years of recession and deflation.
Everyone needs to lay off the protectionism, as it is teh suck. Free trade produces the best results for all consumers, all the time.
IOW, the USA is financing the rest of the world, still.
If the US goes into recession the whole world is sucking wind. Nothing we havent known for a long time. makes you wonder why they want to attack us economically doesnt it?
It's not the shopper's fault, it the government's fault. Quotas and tariffs are bad economics.
Well, a sustained growth of 0.9% per quarter would equal 3.65% per year, that's OK-ish for a developed economy.
Duh...
Bush's fault !!!!!!!!!!!!!
When the US sneezes the World catches a cold....
That probably won't be enough. The Germans would also need to change their habits. The savings quota in Germany is 10% of the income, whereas it's around 0% on average in the US.
USA carries world economy on it's shoulders.WOW there's a big surprise :) !!!
I'm so impressed!
Probably because they don't give as much to charity as Americans do.
If the American economy were to crash big time (1929 stock market crash) the EU may not survive the aftermath.
"Sustained" being the key word. Here's Germany's annual GDP growth over the past few years:
2002: 0.4%
2003: -0.1%
2004: 1.7%
2005: 0.9%
Add to those dismal stats an unemployment rate of 11-12% and it's easy to conclude that Germany has some serious problems. Taxes and protectionism are two of the most glaring. Some people on FR think that a high rate of personal savings, as measured by the government, and a trade surplus is all that's required to produce a healthy economy.
We benefit from it, though -- through lower prices, plus consider how many Americans invest in foreign countries and are actually pocketing the proceeds, which in turn create higher-skilled jobs for more Americans.
Wealth is not a global zero-sum game.
That 0% is a bogus number. It doesn't include any of my savings. Smart Americans put their money in stocks, bonds, 401(k) plans, etc, and some invest in life insurance, when interest rates are as low as they (still) are.
The only thing that goes into that "savings rate" is your checking account and savings account balance at the end of the month.
I agree with your first statement to a degree. I believe we are coming down to the break even line in a hurry though.
The second statement, I'm not so sure that I agree with all of that.
There may be a few that are pocketing proceeds but I'm not so sure that it in turn creates higher skilled jobs for Americans.
After all, the products we are buying are being manufactured in the other country, not America. That means the jobs will be in the other country, not America.
I'm not an isolationist. There must be give and take between countries for us to stay where we need to be.
I just think we are rapidly approaching the line where we need some countries to buy more things from us.
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