I thought cuts were meant to stop this?

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FT Alphaville reports this morning:

Fresh worries about the heath of the eurozone financial system compounded with concerns over the prospects for global growth, hitting equity markets across the world and sending investors into perceived safe havens, such as US treasuries. See the FT’s rolling global overview here, which notes the the yield on the 2-year US Treasury note reached a record low on Tuesday.

Now I find that really weird. I thought cuts were meant to eliminate all worries about growth? Wasn’t growth the dead cert option that was bound to happen the moment cuts were announced? Wasn’t the end of “crowding out” going to deliver salvation for all because the private sector was going to come storming over the horizon?

And I thought markets really hatred government stock so much they were steering clear of it?

And weren’t rates set to climb through the roof?

Or were all those claims just lies to justify cutting the size of the state without consideration of the consequence?