If you have been following the financial press as of late, you’re probably well aware that there is a contentious debate between deficit reduction hawks and those who call for the more state spending to boost global demand. At the latest juncture of this debate, Toronto’s G20 summit, the international community sided with the deficit hawks and committed to halve deficits by 2013. One would imagine this hysteria over public debt is a response to market pressure. Not so, say the bond markets. The latest calls for debt reduction, far from a reasoned response to economic reality, are products of an ideological opposition to a strong state sector:
Instead of bond market fears, the US has an intense political debate about deficits and whether to spend more on fiscal stimulus. Steny Hoyer, the Democratic leader in the House of Representatives, has talked of “spending fatigue”. His Republican opponents have set up “YouCut” – a weekly public vote on which spending to cut, American Idol-style.
Whenever there is a controversial event sure to garner large (and possibly violent) protests, I wait eagerly like a child on Christmas Eve. Mimicking the igneous method employed by Bart Simpson to reach his Christmas presents at the earliest possible hour, I drink enough water to insure that I awake to meet the inky-fingered paperboy as he saunters to my doorstep with the package that I so eagerly wish to uncoil. I flip through the pages anxiously in search of titillating accounts of windows smashed and innocents saved (or the more common inverse–windows saved, innocents smashed). Upon hastily skimming through stories of vandalism and violence, I become infuriated at the nefarious hoodlums who would dare disrespect my fine country and rouse the rabble that occupies it. I then faithfully flip to the the back in search of strongly-worded condemnations populating the editorial and opinion section of my trustworthy newspaper. I intently read the penetrating analysis made by revered pundits, invariably offering stern admonishments to troublemakers and troubles made. These petty criminals offer no coherent political viewpoints, I am told; a rag-tag group of attention-seeking vandals worthy of nothing better than pity, with a dollop of derision and a dash of condescension. (more…)