G-20 Leaders Debate Austerity Vs. Spending President Obama came to the summit hoping to persuade other leaders to pour money into government stimulus programs. European leaders, meanwhile, want to attack what they see as a dangerous and growing pile of government debt.
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G-20 Leaders Debate Austerity Vs. Spending

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G-20 Leaders Debate Austerity Vs. Spending

G-20 Leaders Debate Austerity Vs. Spending

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GUY RAZ, host:

In Toronto, leaders from the G-20 have been meeting all weekend, where they've been talking about budgets and deficits. And NPR's Jim Zarroli is there and filed this report.

JIM ZARROLI: President Obama came to the summit hoping to persuade other leaders to pour money into government stimulus programs as a way of keeping the fragile recovery going. And though he had support from countries like Japan and Brazil, many others had different priorities.

Instead of spending money on stimulus programs, European leaders want to attack what they see as a dangerous and growing pile of government debt.

This morning, the summit's host, Canadian Prime Minister Stephen Harper, read a statement that attempted to paper over the differences. Harper said countries should spend stimulus money they've already committed to...

Prime Minister STEPHEN HARPER (Canada): But at the same time, advanced countries must send a clear message that as our stimulus plans expire, we will focus on getting our fiscal houses in order.

ZARROLI: The statement said wealthy countries should cut their budget deficits by 50 percent over the next three years. They should also try to stabilize the level of their debt relative to the size of their economies by 2016.

Dean Baker, co-director of the Center for Economic and Policy Research, says this is exactly the wrong thing to be doing right now. Baker says with the world economy recovering from a terrible recession, countries should be spending money, not cutting back.

Mr. DEAN BAKER (Co-Director, Center for Economic and Policy Research): But in any case, these are large reductions in deficits during a period when everyone expects we'll still be way below potential output. That's a big hit to these economies.

ZARROLI: But deficit hawks held sway. Obama administration officials said they, too, wanted to cut the deficit. It was just a question of how quickly it should be done.

As the talks went on at Toronto's convention center, downtown was gripped by violent demonstrations of a sort that are rare in this country.

(Soundbite of protests)

ZARROLI: Throughout the weekend, protesters have swarmed streets, breaking windows and setting fire to police cars. Police said they have arrested more than 500 people. But the demonstrators have been unable to get near the summit site, which has been cordoned off.

Rebecca Warren(ph) of Toronto came to protest all the money spent on the gathering.

Ms. REBECCA WARREN: They're blocking off half the city and they're slowly but surely pushing us as far away from the G-20 as they can. So the message to me is loud and clear: Be good citizens, sit at home, be passive and don't disagree with your government. And that is not the kind of country that I thought I lived in.

ZARROLI: Police also raided a university building, rounding up more protesters and housing them in a temporary detention facility. As world leaders tried to resolve their differences inside the convention center, many on the outside said they would be happy to see this summit end.

Jim Zarroli, NPR News, Toronto.

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