"Who's French Now?"
Who's French Now?
A lesson in fiscal restraint.
The voice of fiscal restraint does not normally have a Gallic accent. But in our newly upside-down world, it's the French who are warning Americans about runaway spending and false Keynesian stimulus hopes.
The latest Frenchman to deconstruct Obamanomics -- after President Nicolas Sarkozy came out last week against raising taxes -- is Jean-Claude Trichet, head of the European Central Bank. As central bankers are wont to do, Mr. Trichet avoided criticizing U.S. policies directly. Yet the dangers of trying to spend your way to prosperity that he outlined will sound familiar to Americans.
Governments, Mr. Trichet said in an interview with the Journal's Joellen Perry and Stephen Fidler published Monday, have to "reassure [their] own people that [they] have an exit strategy, to reassure households that [they] are not putting in jeopardy the situation of the children, and to reassure businesses that what is done today is not done to the detriment of their own taxation in the years to come."
Mr. Trichet was speaking specifically about why European nations are not guilty of spending too little to reverse the recession, as President Obama has suggested. But White House economist Larry Summers, the intellectual architect of Mr. Obama's stimulus, should take the point.
Americans worry about the economy in part because of the infusion of hundreds of billions of taxpayer dollars, not in spite of it. Or as Mr. Trichet put it: "If your people have the sentiment that they will be not better off in an endless spiraling of deficits, they will not spend any money that you give them today."
A lesson in fiscal restraint.
The voice of fiscal restraint does not normally have a Gallic accent. But in our newly upside-down world, it's the French who are warning Americans about runaway spending and false Keynesian stimulus hopes.
The latest Frenchman to deconstruct Obamanomics -- after President Nicolas Sarkozy came out last week against raising taxes -- is Jean-Claude Trichet, head of the European Central Bank. As central bankers are wont to do, Mr. Trichet avoided criticizing U.S. policies directly. Yet the dangers of trying to spend your way to prosperity that he outlined will sound familiar to Americans.
Governments, Mr. Trichet said in an interview with the Journal's Joellen Perry and Stephen Fidler published Monday, have to "reassure [their] own people that [they] have an exit strategy, to reassure households that [they] are not putting in jeopardy the situation of the children, and to reassure businesses that what is done today is not done to the detriment of their own taxation in the years to come."
Mr. Trichet was speaking specifically about why European nations are not guilty of spending too little to reverse the recession, as President Obama has suggested. But White House economist Larry Summers, the intellectual architect of Mr. Obama's stimulus, should take the point.
Americans worry about the economy in part because of the infusion of hundreds of billions of taxpayer dollars, not in spite of it. Or as Mr. Trichet put it: "If your people have the sentiment that they will be not better off in an endless spiraling of deficits, they will not spend any money that you give them today."
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posted by KYJurisDoctor at 2:46 PM
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