Global New Deal Needed
Image via WikipediaI am in agreement with Gordon Brown.
Gordon Brown: Global New Deal: America’s path to growth through higher consumption is blocked by high personal borrowing and negative equity. Another well-trodden road out of recession—a private investment spurt—has failed to materialize as businesses hoard cash in the absence of a growing home market. ........ And now that the debt deal will forestall the other traditional path—a stimulus from public investment—just one route to sustained growth remains that can prevent a decade of high American unemployment. ....... Obama should now refocus his attention on securing a global growth pact that will free the world as a whole, and particularly the West, from years of anemic growth. ....... far bolder: “America’s plan for the world economy”—to achieve for global trade and growth now what Gen. George Marshall’s plan did for the faltering world of the 1940s. ........ a “global New Deal” ....... Today, 60 percent of China’s income comes from exports, while America’s export share is just 25 percent. ..... The need is urgent because as Asia’s middle classes double in the next decade, its consumer market will dwarf all others, accounting for 40 percent of all global consumer spending. Without a bigger footprint in Asia, America will be left behind. ....... if—as predicted—India, China, Brazil, South Africa, Mexico, Turkey, South Korea, Indonesia, and Russia, which today buy just 15 percent of U.S. exports, account for 70 percent of future global growth, then no American company can afford to stay at home. ........ Europe’s only hope of salvation from a decade of high unemployment is to export its way to growth. ....... an up-skilling of America’s middle class and calls for U.S. public and private sectors to frontload investment in education technology and infrastructure. And a global growth pact will require America to agree to common global financial standards that can prevent future financial crises. ......... with each iPad sale, only $4 of profit go to its Asian manufacturers, while $80 go to its American (and British) designers ........ From now until Election Day, the president’s opponents will frame his position as “burdening our children with debt.” Indeed, so adept have those on the right been at playing the politics of fear, on all continents, that even in Australia—a country with virtually no debt—the incumbent Labour government lost its majority when it was faced with a conservative onslaught about deficits. ....... Two thirds of a century ago, after the greatest of depressions and the worst of wars, General Marshall rejected the politics of fear for the economics of hope, and the Marshall Plan pioneered a global program that framed the new world order. It repaid itself many times over, doubling global trade and putting America’s flagging postwar economy on course for its most successful era ever. Now, with the same vision and by accepting that a global new deal is the only way forward, an America reborn can lead again.