Busted: Bankers and The Global Economy

October 29, 2008

Financial Perversion Gets New Meaning

Overspending in the United States is legendary. The economy is in such a state that the Federal Reserve lowered interest rates again in the hope of somehow spurring on the banking economy by offering interest at below inflation rates.

Unlike the United States, Britain has stringent limits in place to avoid overspending. With Britain and much of the world moving into recession, the British government is feeling the pinch and the need to spend more than ever to keep stability and guarantees in place. Reuters specifies that British conservative politicians are furious. “Alistair Darling’s speech achieved the worst of both worlds. He scrapped the fiscal rules that Gordon Brown based his reputation on, but put absolutely nothing in their place.” The chancellor called sticking to the old rules “perverse.”

Prime Minister Gordon Brown mandated fiscal rules a decade ago which tame British government spending at 40 per cent of GDP. Now the United Kingdom has joined the United States on spending without limits.

Arguably, the idea of overspending by government is considered by many parties to be perverse or in the United States, unconstitutional based on founding documents. Now the reverse is true. Failure to spend when there is an overarching crisis and need is perverse. So far, British government has proved to be quite responsible. Whether this remains the case remains to be seen, despite a case of global financial influenza. How the global digital economy, the sum total and unity or all economies, fits into global summit plans will be interesting to see indeed. ~ E. Manning


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