Live

Watch CBSN Live

U.S. To The World: Open Up Your Wallets

The White House has some economic advice for the rest of the world – spend, spend, spend.

4732106Larry Summers, President Barack Obama's top economic adviser, is urging world leaders to increase public spending in hopes that a coordinated increase in global demand will lay the groundwork for an economic recovery, reports the Financial Times.

That strategy flies in the face of efforts to bring about global trade balance, but it's a necessary measure in the short term, Summers says.

"The old global imbalances agenda was more demand in China, less demand in America. Nobody thinks that is the right agenda now," he told the Financial Times.

"There's no place that should be reducing its contribution to global demand right now. It is really the universal demand agenda."

But that focus on spending might create some friction with European nations intent on reforming their regulatory system, reports the Wall Street Journal.

The head of Mr. Obama's National Economic Council defended the U.S.'s intervention in its own financial systems, epitomized by multi-billion dollar bailouts of banks, insurance providers and car companies, as necessary to "save the market system from its own excesses," reports the Financial Times.

Summers said the notion that while the markets can usually stabilize themselves, the current situation requires "extraordinary public action."

Summers is expected to echo his calls for industrialized nations to step up their own spending efforts at next month's G20 summit in London.