Deficit Madness

I don't really understand what's going on with conservative politicians and the deficits.  I read that England is cutting £130Bn in spending and expected to cut some 500,000 public jobs in order to get their deficit under control. Their public debt is, apparently, slightly larger than ours with respect to the size of their economy.  And of course the Teatards and the conservative deficit hawks on this side of the pond are all of a sudden emphatically in favor of cutting the deficit and restoring fiscal sanity to the budget.

Now I'll admit right up front that there's a certain element of posturing: "Our political opponents did this (deficit spent) so we are going to oppose it." and a very real element of political opportunism. People are financially stressed and austerity and fiscal discipline seem to be reasonable responses. If you are afraid of losing your job, debt seems scary, and a politician who rails against public debt in these times may do well.

But the thing that makes me think that they are crazy is this: anybody with a passing familiarity with macroeconomics knows that in a recession, deficit spending is beneficial, and austerity measures are exactly the wrong thing to do.  Yet, the conservatives in England are not just posturing; they are actually going to cut the public expenditures. That's going to create a "demand trap" where unemployment is higher, where consumer spending is further depressed, and when the economic downturn is deepened and prolonged. (See Japan's Lost Decade.) Do they not get this?  Are they willfully blind?  Don't they know that you deficit spend in a recession and pay off the debt in good economic times?

I don't know what to say about US conservatives, yet.  I quite believe that they are like the conservatives of 2000-2006 who claim to be fiscal conservatives but if they get in power will probably not actually make the difficult spending cuts needed to actually *be* austere.  I think they are sincere in their economically crazy policy positions, but I don't think they have the political nerve/will to make the very difficult cuts.  Which is a good thing, because they would be catastrophic.