As world leaders have gathered in Asia for the Group of 20 (G-20) summit to discuss measures to revitalize the frail global economy, tensions have risen over struggling currencies and trade. Likewise, President Obama and other world leaders in Seoul, South Korea for the two-day summit are having to contend with one another's opposing strategies for fostering a more stable economic environment and preventing a looming financial meltdown.
The United States would never, ever consider devaluing the dollar for export advantage, Treasury Secretary Timothy Geithner assured an audience of Silicon Valley business leaders in Palo Alto on October 18. “It is very important for people to understand that the United States of America and no country around the world can devalue its way to prosperity, to (be) competitive,” Geithner said. “It is not a viable, feasible strategy and we will not engage in it.” Geithner’s words appeared timed to allay concerns about the U.S. dollar before this weekend’s G-20 meeting in South Korea.
The Associated Press reports that a government investigator has discovered that 89,000 stimulus payments of $250 went to people who were either dead or in prison. The 89,000 payments were among nearly 52 million sent to Social Security recipients and federal retirees as part of the mammoth economic recovery (stimulus) package enacted in 2009. In making the $250 payments, the government simply failed to confirm that the recipients were not incarcerated and not deceased.
Nobel prize-winning economist and Princeton Professor Paul Krugman provided the Associated Press with some unpleasant commentary on the huge debt that Americans and their institutions owe now. Krugman argues that eventually default on these loans is inevitable. That would mean bankruptcies for individuals and corporations and defaults by governments — or, if the Krugman approach is followed, this would mean calculated govenrment inflation of the money supply, which would make it easier to pay off debts.
In the midst of speculation over possible changes to President Obama’s economic team, the chair of the National Economic Council, Lawrence Summers, announces his plans to resign his position at the end of the year. Considered the “chief architect” of Obama’s economic policies, Summers now plans to return to his position as a professor at Harvard University.