Re my earlier post, in case you were wondering if there were any actual cases of politicians making ambiguous calls for market reassurance, well, here’s a nice example from the G20 Toronto Summit Declaration:
There is a risk that synchronized fiscal adjustment across several major economies could adversely impact the recovery. There is also a risk that the failure to implement consolidation where necessary would undermine confidence and hamper growth. Reflecting this balance, advanced economies have committed to fiscal plans that will at least halve deficits by 2013 and stabilize or reduce government debt-to-GDP ratios by 2016.
Whose confidence? And (fiscal) consolidation is necessary where? Halving deficits by 2013 is no small aim. It’s also a highly political aim – affecting many people in many constituencies – and so it seems to me that explicit justification is needed; not hand waving and vague talk of ‘confidence’.
Incidentally, the G20 organisation seems to talk quite a bit about ‘taking steps’ and ‘delivering concrete outcomes’. What, if anything, gives them legitimacy to even attempt to ‘take steps’? Many national constitutions require governments to ratify international treaties as and when they’re negotiated. Shouldn’t the G20 ‘steps’ count as treaties? My question here is only partly facetious. Shouldn’t they?