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Sunday, 29 March 2009

As I was walking down the stair ....

... I met a stimulus that wasn’t there.
He wasn’t there again today.
Oh, how I wish he’d go away

According to the draft communiqué leaked to Der Speigel, Gordon Brown wanted the summit to commit to a $2 trillion stimulus package, as a sign of their commitment to bolstering their economies.

But “Downing Street sources” dismissed the draft as "old" and said the $2 trillion was not new money, but amounts already spent the G20 nations.

Pull the other one. The government may be able to get away with these re-announcements when it comes to UK domestic spending, but did they really think they could pull the same trick when they are dealing with the Finance and Foreign Ministries of 19 other major nations. They really aren’t that dumb.

So now it looks as though any G20 communique will avoid any mention of stimulus, i.e. exactly what Gordon Brown has been telling the world they should do – in order to justify his own overspending.

But we shouldn’t be surprised. All though a socialist like Brown don’t appreciate it, developed countries have vastly different economies which have competitive advantages a=in different areas and their economies reflect that. Countries such as Germany and Korea whose economies are heavily driven by exports have little need for a domestic spending stimulus.

The UK, which has little apart from some of the world’s finest high stakes casinos in the City of London, has no option other than to keep borrowing to cover its losses in the hope that its luck will turn, which it probably won’t.

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