The deficit hawks' scare stories

[CHIMO]

Hollywood used to be the place where creative people went to cook up outlandish horror plots. But Hollywood has been displaced. Now, people go to Washington to spin their wild tales of looming disaster.

The national agenda has been dominated by such tales over the last two years. Most recently, we have had the story of the bond market vigilantes doing to the United States what they have already done to Greece, Ireland and Portugal. This story requires suspending disbelief, but people who report on economic and political issues for major news outlets are good at ignoring reality.

The plot is that, at some date in the not-distant future, if we don't mend our free-spending ways, no one will buy US government bonds. The United States will be forced to stand before the international community as a helpless beggar and agree to whatever humiliating terms bad guys from China to Saudi Arabia, and even France, choose to impose.

The plot departs from reality in several ways. The large deficits at present are due to the downturn, not profligate spending. Furthermore, there has been very little growth in government spending as a share of GDP for decades (apart from counter-cyclical spending in the downturn), undermining this key part of the story.

http://www.guardian.co.uk/commentisfree/cifamerica/2010/dec/06/economy-useconomicgrowth

[Igel]

1. This story sounds familiar.

It takes a complex, multi-component problem and then views it in terms of one of the components. Having viewed it in terms of the one of component that it has a potential solution for. The writer then claims that the problem is, in actual fact, entirely composed of that single component. Therefore, the solution is good for the entire problem--and anybody who says otherwise is vermin and, consequently, cannot possibly have anything on point to add but must instead be working on behalf of the people's enemies against all Real Reality (tm).

All that's left is to go out for a pint or two before the pub closes.