Now that David Cameron has clearly taken a different approach toward government spending than Barack Obama, what better way to settle the argument of which approach works? May the best man, and the best country, win.

This extract from today's New York Times:
In so doing, David Cameron and his coalition of Conservatives and Liberal Democrats have charted an economic course of almost savage austerity, an approach that contrasts starkly with the policies of Mr. Obama, who wrote to Mr. Cameron and other leaders last month warning against premature cuts in government spending that might drive the world into a double-dip recession.

Mr. Obama has chosen a different path for the United States, deferring the kind of sharp budget cuts now being rolled out across Europe, and at his meeting with Mr. Cameron the two leaders, in effect, agreed to disagree.

The UK government, along with a number of other European governments, are carrying out a series of spending cuts that will phase in over the next 1/2 years. As your post highlights, this contrasts with the US at a Federal level, which is still spending more and more.

I'm not sure this is an issue of "who is right". The US, at a Federal level, has no market funding issues. because the USD is the worlds reserve currency. The US therefore receives automatic funding from those countries with trade surpluses, China, Japan, various Arab states etc. So the US can spend as much as it wants, because it receives as much funding as it wants. I'm not saying it is a good thing, but it is true.

Other countries, UK included, have to fund their deficits by borrowing, but investors do not HAVE to buy the debt instruments they issue. So too much spending, will equal large deficits, that may spook potential investors in UK government bonds. UK and other European governments have to make sure they dont become the next Greece, where investor confidence is shot and they can't access debt markets. Hence the need for appropriate spending cuts to reduce a fiscally overstretched position.

So, it's not a question of right and wrong, more a question of the special reserve currency status of the USD giving the US government an added option to go wild and have other trading surplus nations foot the bill. This isn't available to other nations.

One other thought, although the US IS spending wildly at a Federal level, believe me at a state level there are plenty of spending cuts going on.

All in all, the whole financial "mess" is going to take many years to work out of, so better people stop asking when things are going to get back to "normal"...... they won't. At least not if you call the ten years prior to the credit crash "normal"

Within the USA there is a group of theorists that show Obama following "The Cloward and Piven Strategy". One can Google it to see what it exactly is. Basically, they are saying that the Obama administration is carefully orchestrating a fall in dollar value, running up deficit spending, dragging out the environmental disaster in the Gulf of Mexico and giving bail-outs to business rather than citizens to lead to the downfall of the system within the USA as we know it in order to implement a "national emergency" and dispense with civil law and elected form of government and implement his own structures and ensure his not needing to be re-elected in 2012. He will be installed for as long as he see fit to remain in office. Far fetched? Surely it is. Impossible? Not at all..........

luangtom wrote:He will be installed for as long as he see fit to remain in office. Far fetched? Surely it is. Impossible? Not at all..........

He probably calls Venezuela often to get pointers from Chavez.

I take it that this topic is not about the individuals, but about their respective "Economic policies".

luangtom wrote:Within the USA there is a group of theorists that show Obama following "The Cloward and Piven Strategy". One can Google it to see what it exactly is. Basically, they are saying that the Obama administration is carefully orchestrating a fall in dollar value, running up deficit spending, dragging out the environmental disaster in the Gulf of Mexico and giving bail-outs to business rather than citizens to lead to the downfall of the system within the USA as we know it in order to implement a "national emergency" and dispense with civil law and elected form of government and implement his own structures and ensure his not needing to be re-elected in 2012. He will be installed for as long as he see fit to remain in office. Far fetched? Surely it is. Impossible? Not at all..........

you forgot to mention that he is an alien send here to take over our world....

I was merely pointing out that Obama and Cameron are employing opposing economic strategies. Given that there's a fair share of Americans who are opposed to Obama's economic policies, I'd like to think a year down the road will give us an opportunity to see which economic policy worked best.

I've always considered economics a voodoo science (sort of like people predicting lottery numbers or currency futures). From what I read, the looong recession following the depression of the 30's was, at least partially, the result of FDRs attempts to balance the budget. Obama's priority at this point in time seems to be economic recovery, with a reduction of the budget in due time. There are naysayers on both sides of the tracks.....but I'm inclined to support Obama's policies for the time. I really didn't intend this to be a pro-Obama or pro-Cameron thread......rather to follow who's policies may be most effective at a time of economic downturn.