Posted by WARREN MOSLER on May 27th, 2011
In the land of the blind, the one eyed man gets his good eye poked out.
While the statement regarding the US is perhaps a tad on the soft side, globally, political will and public support appears firmly in place for further stagnation and a too large output gap for the foreseeable future.
May 27 (Reuters) — The Group of Eight leaders agreed on Friday that the global economy recovery was becoming more “self-sustained,” although higher commodity prices were hampering further growth.
In a communique to be issued at the end of a two-day summit in France, a copy of which was obtained by Reuters, European nations, the United States and Japan all agreed to ensure their public finances were sustainable.
“The global recovery is gaining strength and is becoming more self-sustained. However, downside risks remain, and internal and external imbalances are still a concern,” the communique said.
“The sharp increase in commodity prices and their excessive volatility pose a significant headwind to the recovery. In this context, we agreed to remain focused on the action required to enhance the sustainability of public finances, to strengthen the recovery and foster employment, to reduce risks and ensure strong, sustainable and balanced growth, including through structural reforms.
Europe has adopted a broad package of measures to deal with the sovereign debt crisis faced by a few countries, and it will continue to address the situation with determination and to pursue rigorous fiscal consolidation alongside structural reforms to support growth.
The United States will put in place a clear and credible medium-term fiscal consolidation framework, consistent with considerations of job creation and economic growth.
In Japan, while providing resources for the reconstruction after the disaster, the authorities will also address the issue of sustainability of public finances.”