Be careful this week about buying wholeheartedy into any G20-related spin about supposedly savvy, free-spending Britain and America doing more to combat the world economic crisis than supposedly stubborn, overly cautious Germany and France. The actual figures show it is much more complex than that.
A Reuters calculation on discretionary fiscal stumuli and the International Monetary Fund’s assessment show that, if anything, Britain is the significant laggard and that German spending almost matches the United States over the next two years. Here are the IMF’s numbers (% of GDP):
2009 2010
Germany 1.5 2.0
France 0.7 0.7
UK 1.4 - 0.1
US 2.0 1.8
Just to add to the complexity, discretionary spending estimates do not include bank bailouts (which would boost UK and U.S. anti-crisis spending numbers) But nor do they include automatic economic stabilisers such as existing social welfare schemes and safety nets (which would boost Germany and France versus the U.S. where such things are rare to non-existant).
