Nobel Economist Stiglitz Accuses Budget Hawks of ‘Deficit Fetishism’

Possibly bolstering the economist’s case, the U.K. and Spain, two prominent budget cutters, posted quarterly growth of 0.5% and 0.3%, respectively.

The Stiglitz comments may also be aimed at influencing the economic policy debate currently raging on Capitol Hill, ahead of expectations the U.S. will reach its debt ceiling limit of $14.3 trillion on Monday. The current consensus in Washington is that the deficit must be reduced, but Democrats and Republicans agree on little else. Before the 2010 midterm elections that brought a House Republican majority, the Democratic administration favored a stimulative fiscal policy in contrast to Republican budget cutting preferences.

Now the differences lie in how deep budget cuts should be, with Republicans wanting to take on large entitlement programs and Democrats seeking tax hikes. Some officials, including Treasury Secretary Timothy Geithner and Fed Chairman Ben Bernanke, have stated that failure to lift the debt limit could wreak havoc in the bond markets. A Gallup poll released Friday confirmed months of earlier polling suggesting the American public opposed raising the debt ceiling.