From the FT today, with all but the opening and last paragraphs deleted:
A consensus is forming that policymakers should tighten fiscal policy, sharply, in countries with large fiscal deficits. Yet what makes these policymakers sure that business and consumers will spend in response to austerity? What if they find that it tips economies into recession, or even deflation?
Premature fiscal tightening is, warns experience, as big a danger as delayed tightening would be. There are no certainties here. The world economy – or at least that of the advanced countries – remains disturbingly fragile. Only those who believe the economy is a morality play, in which those they deem wicked should suffer punishment, would enjoy that painful result.
I’ve noted just a hint in the last day – from Jon Snow on Channel 4 yesterday, from the BBC news commentary on protests in Madrid last night (but not from the economics commentators, I'd add) that there is a real and genuine concern amongst some economists that a world in which all governments cut spending at once is one where recession and even depression is guaranteed as an outcome – as it surely is.
Martin Wolf explains why, technically but well.
And as he says, those left demanding cuts cannot be doing so for rational reason. Nor are they even trying to punish those who caused the crisis – because the bankers and their neoliberal friends seem to be all too happy about the outcome. So what else is motivating those calling for cuts? One has to conclude it is a perverted form of morality – one in which the poor are equated with the wicked (as evangelical Christians seem all too willing to do) and that they in consequence must be made to suffer for the ill it is claimed they have caused the world – even if that was entirely the fault of others.
There now seems no doubt this is the ConDem plan in the UK – as the series of disclosures on planned cuts on the TUC Touchstone blog reveals.
And this is a morality that is very warped indeed. Too close by far in fact that exploited another recession 75 years ago.