February 16th 2009
U.N. Wants A Piece Of Stimulus Pie
T
he folks who brought you oil-for-food and the post-tsunami aid debacle in Southeast Asia are looking at various G8 stimulus programs and practically drowning from their salivating.
A new U.N. report, World Economic Situation and Prospects 2009, worries that a global economic meltdown will impact people who recently left Third World farms for globalization-sparked jobs in cities – jobs that are disappearing as consumers worldwide hunker down.
Growth in world gross product (WGP) is expected to slow to 1.0 per cent in 2009, a sharp deceleration from the rate of 2.5 per cent estimated for 2008 and well below the more robust pace in previous years. While most developed economies are expected to be in a deep recession, a vast majority of developing countries is experiencing a sharp reversal in the robust growth registered in the period of 2002-2007, indicating a significant setback in the progress made in poverty reduction for many developing countries over the past few years.
The report blames the U.S. for the global crises, saying that anyone should have seen the credit crisis and housing meltdown coming – but not noting that the U.N. was a happy participant in the boom years, gleefully taking money from the U.S. without warning us that maybe we should be stashing more away. Once blame is placed, it looks for a global solution:
Furthermore, to ensure suffi cient stimulus at the global level, it will be desirable to coordinate the fiscal stimulus packages internationally. In a strongly integrated world economy, fi scal stimulus in one country tends to be less eff ective because of high import leakage eff ects. By coordinating fi scal stimulus internationally, the positive multiplier eff ects can be amplifi ed through international economic linkages, thereby providing greater stimuli to both the global economy and the economies of individual countries.
So it’s not enough that the U.S. spend a trillion or so on an effort (however flawed) to stimulate it’s own economy. There’s no provision here for the “rising tide lifts all boats” theory of the global economy, no recognition that a healthier U.S. economy would put people back to work from Botswana to Borneo.
No, what’s needed is to come to the bosom of the U.N., and create global stimulus packages so all the world can share in the deteriorating wealth of the West.
Come to think of it, as badly as the Congress botched the stimulus package, maybe even so corrupt and inefficient a group as the U.N. could do better …
One last note: I do not at all wish to make light of the suffering that will happen to the folks at the bottom of the economic ladder when the folks at the top of the ladder are hurting. Call me a broken letter, but I believe the free market is the best way to ensure they’re back on their feet quickly – and seeing Rahmbama/Pelosi/Reid at work only reassures me all the more of the superiority of the free market approach.
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