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Anchor Marco Werman speaks with Jacob Kirkegaard, a fellow at the Peterson Institute for International Economics, about today’s talks between President Obama and British Prime Minister David Cameron. The two leaders have been following different economic paths recently, with Britain looking at deep budget cuts, while the US continues to focus on stimulus measures to revive the economy.

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MARCO WERMAN: I’m Marco Werman and this is The World, a co-production of the BBC World Service, PRI and WGBH Boston. President Obama welcomed British Prime Minister David Cameron at the White House today. The two leaders met to discuss everything from the war in Afghanistan to the BP oil spill in the Gulf of Mexico. The economy was also a top agenda item. Washington and London are on very different economic paths right now with Britain looking at deep budget cuts, while the US continues to emphasize stimulus spending. Mr. Obama was asked about that during this afternoon’s joint press conference.

BARACK OBAMA:  Our two countries are in slightly different situations. Their financial situation is slightly different. Their levels of debt relative to the GDP are somewhat higher. And as David and I discussed when we saw each other in Toronto, the goal here is the same and we’re all moving in the same direction. But there’s going to be differentiation based on the different circumstances of different countries in terms of how they approach it tactically and at what pace.

WERMAN:  Jacob Kirkegaard is a fellow at the Peterson Institute for International Economics. Now, Jacob, Barack Obama along with British Prime Minister David Cameron presented a united front but the fact remains that the US and Britain seem to be taking very different approaches to the economy and fiscal policy. David Cameron bringing in deep cuts in public spending, while Barack Obama still emphasizing stimulus measures. Are these differences problematic for US-UK relations?

JACOB KIRKEGAARD: I certainly think you’re absolutely right, they’re different but I don’t actually think that they necessarily affect the broader long term special relationship so to speak between the US and the UK because as also this whole press conference and the joint appearance indicated, this is really anchored much more in the kinds of national security defense related corporation than the sort of shorter term fiscal policy differences.

WERMAN: Do you think behind closed doors when the media are away, will David Cameron and Barack Obama be debating about how best to deal with their economies?

KIRKEGAARD: I don’t actually think so. I mean I think that basically the espousal at this press conference of the G20 Communiqué line which was essentially that different countries have different circumstances and therefore need to take different measure while all working towards the same goal in the long term. I think they’re perfectly happy with that because I mean once you start giving each other lectures about your domestic policies on fiscal issues, well that’s essentially meddling in each other’s backyard which I don’t think either of them have any interest in.

WERMAN: Well, President Obama raised kind of, as we heard there, the apples and oranges critique of why the US and the UK have different approaches to fiscal policy. President Obama would say you need to stimulate it in the short term. David Cameron would say you’ve got to make cuts right now. You’re an economist, Jacob Kirkegaard, who’s right?

KIRKEGAARD: Well, I would first certainly say that when President Obama said that the UK and the US had different circumstances, he’s right. But I think that to claim that the UK overall debt levels are much higher than in the US, that’s actually not true. I would arguably object to be measured as a share of GDP. They’re about similar. You could debate about the medium-term growth trajectories, but actually the US and the UK are not that dissimilar and they’re certainly -none of the two countries are similar to Greece in terms of just debt levels. So in that sense, I don’t actually think that’s an appropriate observation to make. Whereas what the two countries do share is that they’ve obviously as the host countries of the largest financial sectors in the work, they’ve shared the full brunt of the global financial crisis and the related issues in the financial services sector. So, in fact, they are far more alike than most other countries in the G20 in terms of their fiscal outlook and the circumstances that they faced during the Great Recession.

WERMAN: I think a lot of listeners will find it striking though that after decades of global boom and bust, you’ve got these two world powers, the US and the UK, and they’re really dealing with economic policy so differently.

KIRKEGAARD: Yes, but I think part of it also has to do with this difference in the political systems. In the UK, which is a unitary government, if you’re the Prime Minister and you have a majority in Parliament, then you can pretty much do whatever you want. So there is a difference very much in the sense of how these two political leaders are actually able to deliver. And just in terms of being able to actually get his way, Prime Minister Cameron has a much stronger hand than does President Obama.

WERMAN:  Jacob Kirkegaard at the Peterson Institute for International Economics. Thanks very much indeed.

KIRKEGAARD: My pleasure.

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