Instead of embracing a policy of fiscal responsibility, it appears world leaders are going to simply "grow" their respective economies out of the world wide recession.
Mr Obama has somehow found the leverage to influence the G-8 leaders to rein in the demands by Germany's Chancellor Angela Merkel, to fix the problems posed by various countries who are exceeding their GDP by enormous percentages.
Somehow, the idea of Chicago Thugocracy Politics doesn't seem to account for the preponderance of G-8 leaders who now stand in array against Ms. Merkel.
Mr. Obama did however find the time to arrange a meeting, it is reported at MSNBC, with his European Socialist counterpart and newly elected French President Francoise Hollande and took the opportunity to forge an alliance with the new Socialist leader of France.
Ms. Merkel has led the German government's attempts to push for austerity measures in nations such as Greece, Spain and Ireland, where the GDP numbers are, in real estate parlance, "under water" and have been that way for quite some time, with the result that they all required EU bailouts to stay afloat.
For Greece, as recently as February, 2012 (IB Times) the thought was that it would take eight years for Greek debt to GDP to rise to the 160% of GDP level.
The facts appear to have altered somewhat though, inasmuch as Greece's debt to GDP (Wall Street Journal blog) is already at 160%.
It seems some of the worlds Socialist leaders are blaming the austerity package for the Greek crisis, rather than the intractable nature of the Greek population for consistently haranguing their government to stop laying off government workers.
With Mr. Obama touting the benefits of a new round of stimulus spending in Europe, I suggest the world as a whole is poised to go down as hard as the Titanic did. For Mr. Obama to suggest more spending to spend the world's economies out of the current recession/depression is like the Titanic backing up and taking another shot at the iceberg it hit.
No serious economist is suggesting that all government spending must be stopped. There is a good case though to suggest that a nation can simply not spend more than a "moderate" percentage of its total GDP.
As soon as the GDP is eaten up by spending, the nation becomes a debtor nation, with lien holders waiting in the wings to take the interest without the balance being paid off. Just as any good Mafioso loan shark would do. Or the nation has to start printing paper money to offset the cost of the loans it's incurred. That will always cause hyperinflation as it did in Nazi (National Socialist) Germany and now in Zimbabwe, where the Zimbabwean money is so worthless it isn't used since April 2009.
The purpose of the G-8 getting together to "solve" the world's economic crisis seems to have taken on only a tertiary purpose while the leaders of the world try to figure out how to maintain their power base while holding on to their jobs, and keeping the populations in a state of confusion, and fear.
As for the process of denying the viability of insisting on austerity for those nations, the stimulus spending approach has certainly not worked in the US, and that is despite the enormous economic engine this nation still possesses.
Without austerity measures being enacted, including in the US, the economic meltdown has nowhere to go but a downward spiral. Just like a toilet, loo, or water closet.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com