Harper and Cameron warn of global debt crisis

British Prime Minister David Cameron addressed the Canadian Parliament yesterday evening.

The text of his address can be read here, CTV video can be seen here. (Cameron’s delivery varied slightly from the prepared text, most notably by paying respect to the recent death of Jack Layton.)

Cameron and Prime Minister Stephen Harper raised concerns about current economic instability and the necessity of taking serious steps to prevent another global recession.

According to the Ottawa Citizen, speaking to reporters after his Parliamentary address…

Cameron also told journalists that the British government’s austerity cutbacks should be a lesson to other nations.

“I don’t pretend it is popular with everyone. It isn’t.” But he said that when governments are honest with people about the need for tough measures, they are more likely to get public support.

Read that full article here.

What does government austerity mean to you? If this is indeed a “debt crisis”, is austerity an essential element of recovery, or just one ingredient?

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14 Comments on “Harper and Cameron warn of global debt crisis”

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  1. myown says:

    Cameron and Harper are wrong. Obviously there is debt, but it is not a crisis. We have had large debts before and have grown out of it quickly. Government austerity will only make things worse, think 1937 recession. The government needs to jump start the economy with a much larger stimulus program than the prior one or Obama’s latest weak proposal. The US government can borrow right now at at miniscule interest rates. It is the time to make big investments in physical infrastructure and educational upgrades for the work force so that we can lead the world out of this depressionary funk.

  2. myown says:

    Long article on why European government spending and deficits did not cause the Eurozone financial crisis. The biggest factor was the adoption of the Euro and the subsequent capital inflows to peripheral Eurozone countries.


  3. Lucy Martin says:

    In the bury-the-lead department, in the same address Cameron also made an impassioned defense of…free trade.

    He had this to say (quoting from the advance text):

    “We’ve got to re-fight the argument for free trade all over again. And for me there’s nowhere better to do it than here in Canada – a country built on trade.

    Because the truth is that trade is the biggest wealth creator we’ve ever known. And it’s the biggest stimulus we can give our economies right now.

    A completed trade round could add $170 billion dollars to the world economy.

    And yet too many people still seem to believe that trade is some sort of zero sum game. They talk about it quite literally as if one country’s success is another country’s failure. That if our exports grow then someone else’s will shrink. That somehow if we import low cost goods from China we’re failing. As if all the benefits of China’s exports go to China alone.

    When actually we benefit too from choice, competition, low prices in our shops.

    The whole point about trade is that you’re baking a bigger a cake.

    Everyone can benefit from it.”

    When leading economists can’t agree on the nature of current woes, let alone the solution, I’m certainly not going claim I know the answer.

    But most regular folks have spent some time musing about globalization, free trade and the effect on jobs & wages at home.

    If offered a chance to re-think free trade, would you want more, less, or the same of that particular path?

  4. myown says:

    Free trade is like free enterprise. The concept is fine but it just never happens in the real world. Money and power quickly distort the “free” part and we get governments and monopolies trying to control things to maintain their positions.

    Yes, more free trade can bake a bigger cake. But the problem is not everyone benefits from it. The distribution of benefits tends to concentrate in the hands of multi-national mega-corporations and their shareholders while the average person or worker’s standard of living declines. Countries need to make sure the distribution of benefits from free trade is spread out more evenly by coordinating uniform tax rates for corporations so they can’t play games by shifting profits to offshore tax havens to avoid paying taxes.

  5. Pete Klein says:

    Corporations have a long track record and the experience gained by from shifting jobs in the north to the south. The next step was to move the jobs out of the country completely in their constant search for lower wages. It also gave them the opportunity to move manufacturing beyond the reach of labor unions.
    One solution might be, if at all possible, to allow unions to become international just like big business.
    But there is a deeper problem I have said before and is worth repeating.
    We insist on deluding ourselves into thinking growth can continue forever and ever. We simply cannot expect to have the world population continue to grow at the same time there is less and less need for workers because of the continuing advances in automation and computerization. Everyday business figures out how to produce more with fewer and fewer workers. Just as natural resources have their limits, so to do human resources have their limits.
    I could be wrong and I hope I am but I do believe 9% unemployment could become the new standard for what we jokingly call full employment. And, it could go higher.
    I saw something really sick today. It was in the latest issue of the North Creek Enterprise, a Denton publication.
    In it was an editorial that read, “There is something very wrong with a society that pays people not to work.” They were talking here about people on unemployment insurance.
    The editorial went on to suggest the government require the unemployed to work on farms, doing the work currently done by migrants, both legal and illegal.
    Sounds like a page right out of Chairman Mao’s little red book. Is this where we are going?

  6. tootightmike says:

    The great tragedy of the 20th century was the failure of the unions to go international. Racism stopped otherwise good American workers from supporting their brown skinned brothers, and it has been a downward slide since the fifties.
    Now we find ourselves in the end-game. Conservatives and big money interests, and corporations will work to put an end to all of the world’s social programs.

  7. newt says:

    Racism? May be a small part of it, but I think self-interest should have tipped the scales toward international expansion of unions, were it more practical. It was not racism that prevented most unions from expanding into the US South. Corporate anti-union campaigns, and moving into labor markets with huge, largely uneducated populations, with undemocratic regimes that gleefully suppress unions were larger causes. Also the fact that in much of the world workers a grateful of dirty, low-paying, dangerous industrial work that is nonetheless infinitely better than life on the farm..
    And there may be a natural cycle in place, as many economists claim. Chinese workers in developed areas have demanded, and gotten, better pay, hours and conditions. Family size tends to taper off in industrial societies, and, of course, W. Europe and Japan are shrinking.
    Declining resources and Big Money control of what is left are truly serious, and perhaps insoluble problems.

  8. JDM says:

    If we can’t stop a man-made global recession, what makes us think we can do anything about changing the climate?

  9. Mervel says:

    If borrowing worked then Europe would just do more of it and everything would be okay right?

    Europe is not the model they are failing.

    The advantage we have is that we are still a magnet for immigration and we have hardworking family oriented people moving here and although some have a problem with this change; most do not, and this is how we are different from Europe and Japan, which both still are essentially xenophobic.

  10. oa says:

    You may be right, Mervel, but the austerity Europe is using now is pushing them further in the tank.

  11. hermit thrush says:

    i think it’s important to understand that situations in the u.s. and europe are really different. there simply is no debt crisis in the u.s.* (well, apart from purely manufactured garbage like the debt ceiling debacle). that’s genuinely not the case in europe. the euro is a disaster. greece is going to default. without accommodative monetary policy from the ecb, countries like italy may spiral into default as well. the fundamental economic problems in the u.s. are much more tractable. whether our political system is up to the task is another story entirely.

    * which is not to say that the current fiscal trajectory is sustainable. but we can, and should, afford to have deficits for a while longer. the weak economy is a much more immediate problem.

  12. Mervel says:

    Its too bad we can’t really trust the political process into the future. I think cutting back on anything right now is a bad idea and so an austerity plan in the middle of deep recession is going the wrong direction. The CBO had it correct, don’t cut now, but restructure and cut latter. The problem is that very few governments have ever kept that promise, the US never has, the follow on cuts just don’t happen, so they get forced into the corner like an alcoholic who no one believes is actually going to quit on Monday, so they say hey you have to quit now. No one really believes that we have the will to actually cut medicare, medicaid, social security and defense voluntarily.

  13. Mervel says:

    If you unable to cut voluntarily you end up cutting when the international credit markets lose confidence in you and refuse to loan you money then you will cut and it will not be pretty.

  14. oa says:

    “The problem is that very few governments have ever kept that promise, the US never has…”
    Not quite true, Mervel. After the Cold War, there were big cuts in defense spending and through welfare reform.

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