No, not ours. Here in our country, even the decisions that the Chief of Staff make in their own fields of expertise are questioned by the media. But I'm not going to talk about the military. This article is about the current Chairman of the Joint Chiefs of Staff of USA, Mike Mullen, and the subject he brought attention to just last week, is the issue of the size of the US debt stock. According to latest projections, the US debt stock will double up reaching 75% of the US national income, in 2015. Admiral Mullen was explaining that the US public finance was a risk for national security, in this perspective, but this was already pointed out by the US Secretary of State, Hillary Clinton, in February. Actually, the knowledgeable people say that the issue they have been talking about is also related to the National Security Strategy Document that President Obama recently announced. I guess Mullen's statement reflects a common opinion which concerns the inclination to see the public finance as a threat to national security. This, is the first point that should be kept in mind.

Here's the second: Peter Orszag, the Director of the Office of Management and Budget in the Obama Administration, is quitting his job after this week's G20 meeting. The issue was stressed on English Financial Times, last weekend. According to the Times, Orszag was leaving in distress due to the fact that he never got to put on the agenda the belt-tightening measures he wanted to. Peter Orszag previously attended the Economy Congress of METU, which we still miss. He was on Brookings, at the time, working mainly on retirement systems. The discussion was that Orszag argued that Obama had to forget his 'I will only increase the taxes of the group with the highest income' campaign promise, as soon as possible. He held the view that 98% of the taxpayers were the citizens who made less than 250.000 $ a year. Therefore without backing down from the promise, it wouldn't be possible to regulate the US budget. Here's the second crumb of information, ladies and gentlemen.

Moving on to the third: the US Presidential Elections is going to be held in 2012. Unless Barack Obama has decided to be a one-term only president, he should always keep 2012 in mind.

What should be drawn from all these? As you know the G20 summit was held in Canada last weekend. The fundamental discussion I recently mentioned was between the views 'let's tighten the belts right away' and 'let's give importance to growth'. It seemed as if a mid-way was found at the end of the summit, to solve this argument, saying 'the belts should be tightened, though with careful steps', but the US could not exactly get what it wanted. We recently summarized this matter under the heading question 'Is belt-tightening in one country the same as belt-tightening in all countries?' We emphasized that it wouldn't be wise, everyone tightening their belts all at once; as it would mean each country shooting themselves. We added that it would affect the export performance of countries like us, negatively. Everyone tightening belts all together at the core would mean we, the periphery, too, had to carry their burden. Remember all these? Frankly, I still think the same. I think 'belt-tightening in one single country', is not the same as 'belt-tightening all together at the core'. What if we took the point mentioned above in consideration within the framework of the basic matter of discussion of the G20 summit? Let's have a look.

To me conclusions for the G20 summit can be drawn from these three crumbs of information: First, even though the US belongs to the group that says 'we should give importance to growth', there is an intense discussion over there, as well, about the importance of the budget deficit problem, meaning the need to tighten the belts immediately. For those who know about the new National Security Strategy document, the state that the public finance is in can potentially damage the cross-border operational ability of the US. The debt stock issue is not ignored in the US, within this framework. On the contrary, the fact that the core of the Western civilisation experiencing problems in public finance all together, multiplies the severity of the situation, according to analysts. This being the current state, the US bringing into question its former propositions which include sharing the increasing security costs with others, will no longer mean anything. Here's the result: the US, much like Germany, believes in the importance of belt-tightening and thinks this is a matter of national security. So, there actually isn't a great disagreement in question. The public finance disaster is perceived as a disaster, everywhere.

Here is the second point: Peter Orszag doesn't seem to have convinced President Obama to take a serious measure, by backing down from his campaign promise, before 2012. Certain sections of administration think that with the crisis in Europe, the US can easily carry on with its increasing debt stock for a little while more. Thus, they are trying to quickly revive the economy first, even considering additional fiscal expansion to this end. But meanwhile, they don't even want to think about the President backing down from his campaign promises. The reason for Orszag quitting is a disagreement on choosing the method to cope with the disaster and the timing of this method. The reason is obviously political. The President wants to be elected in 2012. With this lens, the 'deep' disagreement on the two sides of Atlantic, is actually temporary.

On to the third point: The fact that Europe will slow down with early belt-tightening measures will decelerate the recovery process everywhere, including the US. 'Belt-tightening in one country' will not create the same global effect as 'belt-tightening everywhere at the same time'. The belt-tightening in Europe might 'be good for the economy', but, as Ümit Kıvanç wrote back when, it 'is not good for me'. This time, it will not be good for anyone. It will not be good for the US and Obama, either. As the recovery weakens, the resistance of companies will be tested again and again. And this will definitely make it harder for those who want to run for elections in 2011 and 2012. This is perhaps one of the things that make the Obama-wing displeased.

This is what I see on the basis of the available data. Meanwhile, I'm still on the same page. Belt-tightening in Europe is not good for Turkey.

This commentary was published in Referans daily on 29.06.2010