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Krugman: Phony fiscal scolds know no boundaries

In today's column, The New York TImes' acerbic economist Paul Krugman takes on ratings agency Standard and Poor's for its recent decision to downgrade France's credit from AA+ to AA. The columnist argues that the downgrade has much less to do with the French economy than with how it keeps its house in order. And it's a scenario that sounds pretty familiar:

In Europe, as in America, fiscal scolds don’t really care about deficits. Instead, they’re using debt fears to advance an ideological agenda. And France, which refuses to play along, has become the target of incessant negative propaganda.

...Here’s a clue: Two months ago Olli Rehn, Europe’s commissioner for economic and monetary affairs — and one of the prime movers behind harsh austerity policies — dismissed France’s seemingly exemplary fiscal policy. Why? Because it was based on tax increases rather than spending cuts — and tax hikes, he <" href="//">declared, would “destroy growth and handicap the creation of jobs.”

In other words, never mind what I said about fiscal discipline, you’re supposed to be dismantling the safety net.

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