By Ian Swanson - 06/23/10 01:24 PM EDT
reduction must take a backseat to policies driving economic growth,
to President Barack Obama’s economic team.
That’s the message Treasury Secretary Tim Geithner and National Economic Council Chairman Larry Summers want countries attending the G-20 summit to hear.
In an op-ed published in The Wall Street Journal on Wednesday, the two call on the G-20 to cut deficits, but not at the price of cutting off economic growth. “Without growth now, deficits will rise further and undermine future growth,” Summers and Geithner write.
The call from the U.S. comes in advance of a global summit where the debate over spending versus budget cutting is expected to take center stage. Obama last week urged European leaders not to cut off spending, which appeared to provoke a backlash across the Atlantic.
The U.K. and Japan on Tuesday announced austerity packages, and Canadian Prime Minister Stephen Harper, who is hosting the summit, on Tuesday called on G-20 members to cut their deficits in half.
In Congress, lawmakers are also pursuing ways to cut the deficit, but the Obama administration has repeatedly warned that too much of an emphasis on budget cutting could choke off an economic recovery.
“We must demonstrate a commitment to reducing long-term deficits, but not at the price of short-term growth,” Summers and Geithner wrote in their op-ed. They wrote that global growth would double U.S. exports over the next five years, supporting millions of U.S. jobs.
Summers and Geithner said the G-20 should also focus on establishing a global framework for financial regulation, and to raise living standards for developing countries around the world.