One of the more destructive myths austerity hawks have successfully implanted in the public narrative is the notion that there are bond vigilantes lurking around every corner and only the confidence fairies can save us. The international economy has now been operating under that fallacy for long enough to find out the truth. Neither bond vigilantes nor confidence fairies exist in the real world:
Since the beginning of the debt crisis in Europe more than two years ago, defenders of the euro currency union have stuck to a basic argument: if the euro zone’s weaker economies would only keep pursuing policies of austerity, even as growth collapsed and job losses mounted, they would be rewarded by investors more willing to buy their bonds. [...]
That approach, though, has failed in Greece, Ireland and Portugal. And now it is being severely tested in Spain, where the more the government promises to cut its budget deficit, the more foreigners are unloading their Spanish bond holdings.
Late Thursday, when Standard & Poor’s jumped into the fray by slapping Spanish bonds with a two-notch downgrade, it gave public voice to what investors have been sensing for months now — that it will be nearly impossible for Spain to meet its current deficit-lowering target amid one of the most severe recessions in the euro zone.
By all means, read the entire article at this link. The bottom line is the scam artists who are spreading this immoral fairy tale are lying to you. Austerity cuts don’t cure deficits, they create them. They have always been wrong and they don’t care. They make money either way. They probably make more money by placing short bets on economic destruction than they do on investing in an economic boom. What they’re doing in Europe, they will do to us here.
The worst part is, they don’t even need the money. After the first hundred million, it’s not about the cash anymore. It’s about the power. They just want to win. And when they win, the rest of us lose. Everything.