What the 20 heads of state at the G20 continually fail to understand is the plight of individuals and how that impacts on how well we will recover from this mess. How could they, as they are all insulated from the real economic world because of their status?
What they didn't address is the dire state of individuals' balance sheets, and those of companies small and large across the world, decimated by too much debt. All they had to offer was enlarged credit facilities, i.e., offering people and companies the
ability to dig themselves even deeper in the brown stuff in the hope that something will turn up - Micawber economics if I ever saw it.
Gordon Brown said that the expansion of SDRs will provide countries that want to export the finance to do so. What's the point in exporting stuff that people can't afford to buy - or shouldn't if they have to borrow yet more to do so?
Who is going to finance the $1 trillion expansion of credit? The UK doesn't have anything left in the tank for its own purposes, never mind to back any of this 'finance'.
If $1 trillion is going to be made available, it should be cycled through the debts of ordinary people - thoise who buy things at the end of the day - in purchasing equity shares in their properties, thus allowing them to reduce their debt burden, so they
can safely start participating again on the demand side of the economy. Simply providing finance to producers to 'stay afloat' or produce stuff that people can't afford to buy won't work.
This is an opportunity missed, and we will probably pay for it later - in more ways than one.