By Simon Johnson
Should we take seriously people who, in the current US political debate, argue that they are “fiscal conservatives”? No.
These self-labeled conservatives are very far from even being willing to discuss the real issues – let alone make proposals that would have significant effects. As Peter Boone and I argue on Bloomberg this morning, US “fiscal hawks” are just pretending. Perhaps this will prove effective in the midterm elections, but then they will face the music – what exactly will they put on the table that will make any difference at all?
Unless and until you are ready to really reform the financial sector, you cannot be taken seriously in the fiscal space. It’s the big banks that blew up the economy, caused a devestating recession, and pushed up debt by 40 (forty) percentage points relative to GDP.
None of today’s “fiscal conservatives” showed up to work hard on constraining global megabanks over the past 18 months. They have repeatedly and explicitly earned the right not to be taken seriously.
Here’s the full Bloomberg link: http://www.bloomberg.com/news/2010-11-01/u-s-fiscal-hawks-turning-french-commentary-by-peter-boone-simon-johnson.html