U.S. to Push for Global Stimulus

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Bob Davis of  The New York Times writes — The U.S. will press world leaders to boost emergency government spending to lift the global economy, risking a rift with European nations more concerned with revamping financial regulation.

In President Barack Obama’s first foray into economic diplomacy, Washington will urge the shift at a summit next month in London, U.S. officials say, as markets look for a unified plan of action from the world’s most economically powerful nations.

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Washington’s focus is at odds with France, Germany and other European nations that want the Group of 20 summit on April 2 to focus on rewriting rules governing financial markets. These nations say lax regulation was a major cause of the financial crisis and want to tighten their grip on hedge funds and private-equity firms.

All sides are looking to avoid a breakdown at the summit that would roil markets, which are already wary about whether government leaders know how to stem the economic decline, say U.S. officials and international economists. Expectations of the summit are high: A coordinated response is seen as critical so each government’s efforts reinforce, rather than impede, the efforts of others.

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This is all good news for international investors as it will resolve many of the financial dilemmas we may be experiencing.