(With apologies to Shakespeare). Or, how political discourse in America is becoming more like that in Greece.
I’ve been away in Europe for much of the last few weeks, and have heard plenty about the euro crisis (and US fiscal paralysis). And while I think the comparisons often made between the Greek and American fiscal situations are overstated (different debt-to-GDP ratios and trajectories, and critically very different arrangements with respect to central banks), in one way — namely the way in which Greece managed to enter into EMU, and to hide its debt to GDP ratio — the US could become more like Greece, if some in the political sphere have their way. From the FT:
The head of Elstat, Greece’s new independent statistics agency, faces an official criminal investigation for allegedly inflating the scale of the country’s fiscal crisis and acting against the Greek national interest.
Andreas Georgiou, who worked at the International Monetary Fund for 20 years, was appointed in 2010 by agreement with the fund and the European Commission to clean up Greek statistics after years of official fudging by the finance ministry.
“I am being prosecuted for not cooking the books,” Mr Georgiou told the Financial Times. “We would like to be a good, boring institution doing its job. Unfortunately, in Greece statistics is a combat sport.”
Mr Georgiou is due to appear before Greece’s prosecutor for financial crime on December 12 to answer the charges. If convicted of “betraying the country’s interests”, he could face life imprisonment.
The investigation follows a public dispute over the 2009 budget deficit figure. Under Mr Georgiou, the figure was revised upwards from 13.4 per cent to 15.8 per cent of gross domestic product — a record for a eurozone member state. The revised figure was accepted without reservation by Eurostat, the Brussels statistical service.
Elstat was established in August 2010 in an attempt to bring Greek statistics into line with EU standards. Before then, a committee of finance ministry and central bank officials came up with an annual budget deficit figure to be reported to Eurostat, based on numbers provided by the government statistics office. The finance minister was personally responsible for approving the final figure.
Since Elstat was set up, Eurostat has dropped its warnings about the reliability of Greek data on the public finances — formerly a regular footnote in Commission statistical reports. According to revised Eurostat data, Greece would have failed even to gain admission to the eurozone in 2001 because its deficit was too large.
So what does this have to do with America? Consider this statement:
“If you’re serious about health care reform, abolish the Congressional Budget Office,” calling the agency — which has positively scored President Obama’s health care proposals, and looked negatively on Republican ones, as “dishonest.”
That statement was made by Newt Gingrich. So if you want to make America more like Greece, don’t look to how the debt situation is evolving so much as how the assault on non-partisan, technocratic institutions is being manifested in the public debate.
He has also characterized the Congressional Budget Office* ‘as a “reactionary, socialist institution.”‘ [WSJ] (which makes me wonder about his grasp of history, since anyone who knows a bit about the reactionaries of mid-19th century Europe, and socialism — either utopian or “scientific” — would not put them in the same phrase).
For more on Gingrich and the CBO, see Bruce Bartlett and Ezra Klein. This post notes how Gingrich eliminated the Office of Technology Assessment (clearly, we know all we need to know about technology).
* Full disclosure: I serve on the CBO Panel of Economic Advisers (as noted in the public record)
This post originally appeared at Econbrowser and is posted with permission.
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