Sunday, June 27, 2010

Harper's Deficit Cutting Stage Show

When a guy has just shelled out a billion bucks for a chin wag the guests can at least be courteous. And that's pretty much what the G20 leaders (if "leaders" isn't too strong a word) did in endorsing Harper's resolution that they cut their deficits in half by 2013.

World leaders have become pretty adept these past many years at making hollow promises. Think carbon emissions. The easiest thing in the world is to sign a non-binding pledge that a stooge like Harper can then wave around as though it meant something.

The fact is that each nation will have to seek its own path to fiscal salvation. We're all sinners but we haven't all committed the very same sins and there is no one-size-fits-all formula for redemption. Harper knows this. Obama and every one of the other leaders knows it full well too. Not every nation had a prudent Paul Martin who kept them from plunging headlong into the abyss.

There is no homogeneous "G20 economy." The countries are quite diverse economically - from Argentina to Korea, Saudi Arabia to Australia and Mexico. A couple of economies are primarily agrarian, others are industrial, others yet are resource driven. What lies in store for each of those economies in the next two years may vary significantly. There's no uniformity in debtload as a function of GDP nor in balance of payments or balance of trade.

But as pure political theatre the 2013 pledge probably works for Harper. It's about as much as he could hope to extract. Then again, it's not much for a billion dollars.

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