U.S. and Germany Differ on Spending
The dispute between America's proposed deficit spending and Germany's belt-tightening grows larger as the nations meet at the G-20 summit. The world's economy could be at stake. Differences in economic policy could be explained by the different economic histories of Germany and the U.S., where Germany has suffered greatly from deficits and inflation whereas the U.S. has learnt to fear deflation. "Referring to US demands that Germany abandon austerity in favor of additional economic stimulus measures, German Finance Minister Wolfgang Schäuble said that 'governments should not become addicted to borrowing as a quick fix to stimulate demand. Deficit spending cannot become a permanent state of affairs.'"