Thursday, June 09, 2011

The Psychology of Debt

I've been reading this article at today, which makes a stunning point:
Exit polls in 2010 found that voters said reducing deficits was a higher priority than spending money to create jobs — a clear rejection of Keynesian theories, which hold that in hard times, government should increase spending and decrease taxes. The concern was not only among Republicans: 32% of voters who favored deficit reduction voted for Democrats last fall.
Nevermind that the stimulus spending has neatly offset the hike in gas prices (until now, of course). Nevermind that the tax cuts for middle class and workign families as well as small business were held ransom by Republicans until they jammed thru an extension of the Bush tax cuts (signaling, by the way, that they've acknowledged they only grew the deficit and really didn't do all that much for the economy.)
This was a curious construct for me, one that has begun to foment in my mind. I'll have more to say about this down the road but it seems to me that, after ten years of scaremongering on terrorism, the Republicans have successfully implanted a fear of deficits. It strikes me that perhaps these percentages for deficit reduction, randomly bizarre since most people will deny cuts to any program of any size that factors into that deficit, seems inflated.
It occurs to me that we're looking at a panic, not a rational and reasoned decision made by informed people.