Europe's Decision to Dump Stimulus 'Like Taking Up Smoking'

Economists Say Focusing on Deficit Could Lead to Double-Dip Recession

By DAVID KERLEY

TORONTO, June 27, 2010

 

(ABC News) President Obama lost the argument. His G-20 colleagues decided here in Toronto to turn their economic attention from spending on stimulus to cutting deficits.
The president faces financial reform and Supreme Court confirmation hearings.

That is exactly what Obama warned against, arguing that turning off the stimulus spigot could stop the fragile global economic recovery in its tracks.

Despite all the president's cajoling and arm-twisting, the host of summit of the world's industrialized and developing economies delivered the message that it is time to stop spending.

"Advanced countries must send a clear message, that as our stimulus plans expire we will focus on getting our fiscal houses in order," Canadian Prime Minister Stephen Harper said.

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