Based on the view of a single economist, ABC portrayed the agreement by world powers, at the G-20 summit in Toronto, to pursue fiscal sanity over the accelerated government spending urged by President Barack Obama, as a threat the well-being of the American people. “President Obama lost an argument today with other world leaders, and some economists say that could plunge the world into a second recession,” Dan Harris intoned at the top of Sunday’s World News.
From Toronto, reporter David Kerley agreed: “The President lost the argument and there could be serious consequences. Some economists are saying what was decided in Toronto today could actually lead to a double-dip recession.” A dire Kerley elaborated: “The worry is that by turning off the stimulus spigot the fragile economic recovery could disappear and turn into a double-dip recession.”
ABC’s “some economists” turned out to be a single one, Professor Peter Morici of the University of Maryland, who ominously warned: “It will be very difficult to recover from that. Then we start to get into depression-like conditions.”
Kerley forecast not following Obama's policies will mean “an unemployment rate that could rise again, this time above ten percent, no recovery in the housing market and an even tighter credit market. And all of this could last another two to three years.”
From the Sunday, June 27 World News on ABC:
DAN HARRIS: Good evening. President Obama lost an argument today with other world leaders, and some economists say that could plunge the world into a second recession. The President went to this weekend's summit meeting in Canada to convince other wealthy nations to keep spending still stimulate their economies. But they said no, arguing now is the time to start cutting deficits. So, who is right here and what does that mean for your wallet? We're going to start tonight with David Kerley, who is at the G-20 summit in Toronto. David, good evening.
Screams and cheers for President Oobama during a photo shoot. But his G-20 colleagues didn't buy his argument that they need to keep spending to stimulate their economies, rather than turning to cutting deficits.
STEPHEN HARPER, CANADIAN PRIME MINISTER: Advanced countries must send a clear message that as our stimulus plans expire, we will focus can on getting our fiscal houses in order. Specifically, we should agree that deficits will be halved by 2013.
KERLEY: It is a major split for the major economies, which have been on the same page for a year and a half. The President gave in, signaling as much when he met with the new British Prime Minister.
PRESIDENT OBAMA: There are going to be differentiated responses between the two countries because of our different positions, but we are aiming at the same direction which is long-term sustainable growth that puts people to work.
KERLEY: The worry is that by turning off the stimulus spigot the fragile economic recovery could disappear and turn into a double-dip recession.
KERLEY: What does that mean? An unemployment rate that could rise again, this time above ten percent, no recovery in the housing market and an even tighter credit market. And all of this could last another two to three years.
MORICI: What Europe did today would be like taking up smoking. You don't know when it's going to make you sick, but it will make you sick.
KERLEY: The weekend meetings here in Toronto were targeted by protesters who took to the streets, burning cars and breaking windows. Canada spent nearly a billion dollars on security. That's $12 million per hour that the world leaders were here in town. More than 500 protesters were arrested. Dan?
