Sunday, June 21, 2009

Woerth: Deficit Between 7 and 7.5 percent

Eric Woerth, budget minister, says the deficit will be between 7 and 7.5 percent in 2009 and probably the same in 2010. The Maastricht target of 3 percent seems like a fading dream, but there's no one left to lecture the French on fiscal discipline: the liberal Anglo-Saxons are in even worse shape, with the UK at 10 pct and the US at 12. Alan Blinder explains why we shouldn't worry about this--too much.

And from Wolfgang Munchau:

This general [German] level of debt-aversion is bizarre. Many ordinary Germans regard debt as morally objectionable, even if it is put to proper use. They see the financial crisis primarily as a moral crisis of Anglo-Saxon capitalism. The balanced budget constitutional law is therefore not about economics. It is a moral crusade, and it is the last thing, Germany, the eurozone and the world need right now.

1 comment:

David Walker said...

I don't see why it should NOT be a worry. The effect of having even the developed nations in increasing debt (or a steady debt but one with large numbers involved) affects those smaller, developing countries with bigger debts because the economy of these smaller nations depends on the economic success of those in power. This is going to cause a domino effect all over the world, which would be harder to remedy in the long run.