The Washington Post is reporting that among the protests up in Canada, the G-20 leaders agreed on deficit cutting for their respective countries.Some leaders were more vocal about utilizing the fiscal scalpels, while others, like President Obama wanted a mixture of stimulus spending and cuts.
In the end, the G-20 leaders, knowing of the failure of Greece and those countries on the brink (Portugal and Spain), decided on curtailing their spending. They have gone so far as to pledge to cut their respective deficits in half.
German and Canadian leaders were the most vocal in their support to undertake massive spending cuts, and urging their people about the benefits of savings.
With all the promise of prudent spending by the G-20 leaders, President Obama still warned that too much cutting might slow down the fledgling world economic recovery.
The G-20 also urged developing countries like China and India to have their people spend more, and that these countries must provide living wages and adequate benefits for their workers.
In addition, leaders agreed that their banks should have more capital stored up as a safety net if there are financial woes. This safety net for the banks is a positive consequence of the banking failures, which took place mostly in the United States.
Unlike most of the G-20 countries who waxed eloquent about implementing financial changes in their institutions, President Obama can boast about actual legislation moving through the legislative process to address the U.S. financial shortcomings, which resulted in our recession.
President Obama also warned that too much spending might cause what it is deemed as a double dip recession.
Monday, the markets will show if they agree or place any credence into the promises made by the G-20 leaders.
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