Jun 302010
 

A recent poll found that Americans perceive terrorism and the federal debt as the most serious threats to the country. The fact that these two wildly different issues alarm Americans in almost equal measure shows that the turbulence of the last couple years has left our national psyche a little rattled. Of course, Americans’ fear of terrorism is nothing new. Memories of 9/11 loom large in our collective memory and we’ve been in a state of low-level panic ever since then, a state that is exacerbated by news of every half-baked attempt to wreak similar havoc. But the debt is a more abstract fear with more diffuse consequences. Americans are kept awake by what is essentially an accounting problem. How much more post-modern can you get as a society?

It isn’t difficult to discern the roots of this fear. The billions of public dollars spent on the TARP and economic stimulus have not improved the short-term economic outlook for most people and unemployment is still rampant, prompting a lot of questioning about the value of such spending. The debt crisis in Greece showed everyone that a spendthrift government can get itself in real trouble. My worry, though, is that this anti-deficit fervor might rob us of an economic recovery. The politics of the moment have already caused plenty of hand-wringing in Congress, where provisions to extend unemployment benefits and enhanced Medicaid funding are languishing. There’s historical precedence for the proposition that bad things happen when public spending is cut before the economy has fully escaped the doldrums. It would be tragically ironic if people’s fears lead to the financial hardships they were hoping to avoid.

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