Posted on 03/11/2009 2:15:20 PM PDT by NormsRevenge
The US raised the stakes in its drive for an aggressive response to the global financial crisis on Wednesday, calling for a tripling of the International Monetary Fund’s firepower and bigger fiscal stimulus measures worldwide.
Tim Geithner, US Treasury secretary, called for the radical changes ahead of the Group of 20 finance ministers’ meeting in the UK this weekend.
“Lots of things that did not seem realistic in the past are not just realistic but compelling,” he told reporters. “Forceful financial sector actions are critical to rebuild confidence, restore market functioning, get credit flowing again and bring stability to the global financial system.”
The US proposed that the IMF, which currently has about $250bn in easily usable resources, should get up to $500bn more to help it combat instability in crisis-struck countries. The agreements would involve massively expanding the so-called “New Arrangements to Borrow”, an arrangement by which the fund can borrow from its richer members, and expanding it to include more emerging market countries.
The demand outstrips the call even from the fund’s own management, which has asked for $250bn more in resources from its member governments.
Mr Geithner said that each G20 country should set a target of spending 2 per cent of gross domestic product for 2009 and 2010 in fiscal stimulus, and that the IMF should monitor progress towards that goal.
The target is far more than is planned in discretionary spending by several European countries, including the UK, whose discretionary spending is set to fall from 1.4 per cent of GDP this year to minus 0.1 per cent in 2010, according to IMF analysis.
European ministers have countered that their automatic fiscal stabilisers, which increase spending when the economy slows, are much higher than those in the US.
European ministers this week rejected calls to announce more stimulus at this stage, threatening a damaging rift ahead of the G20 summit. But the Treasury secretary tried on Wednesday to paper over disagreements with the Europeans, saying that reform of financial regulation – a key European focus – should also be discussed at the G20. Reports of criticism from European ministers “is not what I hear from my conversations with my counterparts,” said Mr Geithner.
As well as expanding the size of the IMF, the US also called for fundamental changes in the governance of the global economy.
The Financial Stability Forum – an association of rich nations set up in the aftermath of the Asian financial crisis of 1997-8 – should be expanded to include all G20 countries and should play a role alongside the IMF and World Bank, the US said.
Obamanomics— spreading bad ideas and foolish policies world wide.
Did he say this just before lunch, eastern time?
not sure when he spoke but it may well have been.
The Dow was doing ok up to that point and then ... Bam!
“Forceful financial sector actions are critical to rebuild confidence, restore market functioning, get credit flowing again and bring stability to the global financial system.”
Yes, I’ve seen the current pork-crammed stimulus and I’m sure confidence in the Obama economy will be ignited. LOL
$1.7 million for pig odor research in Iowa, $2 million for the promotion of astronomy in Hawaii, $475,000 for a parking garage in Provo City, Utah, $300,000 to build a Montana World Trade Center, and $150,000 for a rodeo museum in South Dakota.
BIS Quarterly Review, December 2008 ( Global Financial Information )
Now that is what they are really after.
Are we the laughing stock of the world? or what! What an embarrasement. The court jester is now the president and big top washington circus of clowns is now our government.
Now wouldn’t it be a special if Obama was found not to be a citizen and all his idiotic socialist policies are NULL AND VOID! Nice to dream , HAVE HOPE!
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