The Demands of the Deficit Hawks Won't Cure -- They'll Kill

Sometimes, the most urgent truths are rolled up and hidden away in the most apparently trivial news. So if I tell you that Moody's, the leading credit rating agency, has downgraded Ireland's debt, it sounds pretty irrelevant. In fact, if you unwrap and decode this story, you'll discover the reason why you are going to be more likely to lose your job or your home soon, if Obama doesn't unleash a new starbust of stimulus soon, or if the Republicans win.

The British finance minister, George Osborne, visited Ireland a few years ago to say it was a "shining example" for Britain to mimic. When the recession hit, the country's government immediately applied the medicine Cameron and Osborne are now imposing on Britain. They argued that when the economy withers, the government needs to react like any responsible family and cut spending to pay down its debt. They warned that if they didn't do it fast, the international bond market would charge Ireland more for its liabilities, and the debt burden would become intolerable. Better to purge now, so you can get back to fiscal health as soon as possible. "Look and learn from across the Irish Sea," Osborne said.

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