So how much we spend on supporting the economy in 2010 and 2011 is almost irrelevant to the fundamental budget picture. Why, then, are Very Serious People demanding immediate fiscal austerity?
The answer is, to reassure the markets — because the markets supposedly won’t believe in the willingness of governments to engage in long-run fiscal reform unless they inflict pointless pain right now. To repeat: the whole argument rests on the presumption that markets will turn on us unless we demonstrate a willingness to suffer, even though that suffering serves no purpose.
Quite. David Cameron is a charlatan. The public finances are “worse than we expected” he said in Milton Keynes today. Well that’s nonsense.
Interest rates have gone down since things began to go tits up in Europe. The deficit last year was smaller than predicted which gives us more leeway this year.
Things are better than expected! When even the Telegraph thinks you’re wrong, you have a problem Mr Cameron.
Left Outside 
The things we do for the very markets we prop up…it makes my head spin and bile rise.
No no no, its worse.
We are doing things which we think the markets want, but which the markets have not actually asked for.
Its all about maintaining confidence.
The argument goes:
1. We either cut the deficit now or
2. The markets lose confidence in us and the money dries up which means even more painful cuts.
I think this argument is bollocks. We have far more leeway than the Cameron and co are pretending.
It also rests on the unspoken assumption that markets want to see states commit to some pain now, to “prove” they have the balls for it. Its all fucking irritating to be honest.
My head is still spinning and I still feel sick if that is any consolation.
I didn’t even explain it all that well…