The Obsessives

I've been saying for quite some time now that the Right's obsession with the deficit and the debt is detrimental to our economy. Apparently, everyone agrees now that this is the case. By "everyone," I mean the people who live outside of the bubble and actually deal with economic and financial matters on a daily basis.

Example #1

“Fiscal tightening is hurting,” Ian Shepherdson, chief economist of Pantheon Macroeconomic Advisors, wrote to clients recently. The investment bank Jefferies wrote of “ongoing fiscal mismanagement” in its midyear report on Tuesday, and noted that while the recovery and expansion would be four years old next month, reduced government spending “has detracted from growth in five of past seven quarters.”

Agreed. The article details how unemployment would likely be around 6.5 percent and quarterly growth between 3 and 4 percent as opposed to the 2 percent we are at right now.

Example #2

The Federal Open Market Committee, which sets policy for the central bank, noted signs of improvement in the private sector last week in a statement. “But fiscal policy is restraining economic growth,” it added, echoing public comments that Ben S. Bernanke, the Fed chairman, has made for months. In April, the International Monetary Fund said the United States would achieve further growth “in the face of a very strong, indeed overly strong, fiscal consolidation.”

Again, US fiscal policy is restraining growth. One would almost think that the Right doesn't want the president to succeed. Hmm....

Example #3

“Whenever I talk to our customers or clients, they sort of brush off everything that’s related to fiscal policy,” Mr. Daco said. “The view is, ‘Oh, it doesn’t matter.’ That’s what I hear a lot.” “What we try to convey is that it does matter,” he said. “It is important in terms of growth. It’s also important in terms of confidence.” He noted that the economy was much stronger than Europe’s largely because the United States initially opted for stimulus measures and allowed deficits to increase when the recession and financial crisis hit five years ago. European governments pursued austerity policies to cut their debts, further stalling economic activity and in turn inflating deficits.

Isn't it time we did away with all this debt and deficit obsessiveness? It's all rooted in emotion anyway. The Right just doesn't like government spending. The only way they would embrace it is if Jesus himself came down and told them it was poor fiscal policy. And even then, I'd have to wonder....