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The media is rejoicing and the markets are reported to be rallying due to a pledge by nations represented at the G20 summit to inject one trillion dollars to several ‘world’ bodies which will distribute the funding to nations around the world. There are no details on how the distribution will be managed.

The 2009 G20 summit is nothing more than a political tool. Think about it. One trillion dollars ‘pledged’ by the 20 nations who represent 90% of the world’s GDP, 80% of the trade and 2/3 of the populaion. The US alone is spending trillions on its own economic problems and currently is debating a nearly 4 trillion dollar proposed budget.

And the media and markets are going wild with joy. That makes no sense. Either most Americans are right and the money our government is spending in the name of an economic crisis is insanely excessive and the G20 is closer to ‘proportional’ reality or the US numbers are right and the G20 numbers are woefully inadequate. Only one of these conclusions can be right.

One trillion dollars is 1000 billion. Divide that by 20 countries and the average is 50 billion per country to spread around the world. Obama is suggesting the US spend more than half that total ($640 billion) on a downpayment for US health care. These numbers don’t make sense and neither does the G20. Unless you conclude this is all politics all the time.

Stanford Matthews
MoreWhat.com

The G-20 is made up of the finance ministers and central bank governors of 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States of America, and also the European Union who is represented by the rotating Council presidency and the European Central Bank. To ensure global economic fora and institutions work together, the Managing Director of the International Monetary Fund (IMF) and the President of the World Bank, plus the chairs of the International Monetary and Financial Committee and Development Committee of the IMF and World Bank, also participate in G-20 meetings on an ex-officio basis. The G-20 thus brings together important industrial and emerging-market countries from all regions of the world. Together, member countries represent around 90 per cent of global gross national product, 80 per cent of world trade (including EU intra-trade) as well as two-thirds of the world’s population. The G-20’s economic weight and broad membership gives it a high degree of legitimacy and influence over the management of the global economy and financial system.

GDP (purchasing power parity): GWP (gross world product): $70.65 trillion (2008 est.)

This entry was posted on Thursday, April 2nd, 2009 at 9:39 pm and is filed under Public Affairs, Money Matters, wordpress, Politics, Foreign Affairs. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.