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As Spain may discover, you can’t run a country like a family tightening its belt | Miguel-Anxo Murado

A ‘zero deficit’ constitutional rule won’t help our fiscal problems, but it will mean a commitment not to pursue a social democracy

After being struck by the crisis, now Spain has fallen prey to a metaphor. The crisis is bad, but the metaphor is awful, and I’m not sure if the figure of speech won’t end up being more harmful in the future than the economic downturn.

I’m talking about the “governments-should-be-run-like-families-you-don’t-expend-the-money-you-don’t-have” cliche (and I can hear the voice of Sarah Palin as I write that sentence). The Spanish president, José Luis Rodríguez Zapatero, has been persuaded by this analogy too and, pressured by the markets, is now proposing to enshrine a “zero deficit” rule in the constitution (only Germany has something similar). What this basically means is that from now on no Spanish government will be allowed to expend more money than it has. Like a family (one without a mortgage, I mean).

It’s not difficult to understand why this comparison appeals to so many people: It’s simple, familiar. It has a penitential ring to it. Sounds like common sense. Only that it isn’t. Of course a government is nothing like a family. Governments make laws, levy taxes and print money; families don’t. When a government spends, it invests in the future, harvests taxes and gets the economy going. Actually, it is government spending that got us out of recession. Now the big idea is to deprive ourselves of this tool for future crises.

There’s nothing wrong with fiscal sustainability, of course, but Spain’s debt problem is not in itself serious (our debt is actually lower than the EU average, lower than that of the UK for example) and our deficit is circumstantial (we were running surpluses not long ago). Spain’s problem is unemployment and a sluggish growth, and a “zero deficit” budget at this point is akin to the ancient medical practice of bleeding white a sick man with leeches. Almost all patients died, but nobody questioned the doctor’s authority. (Metaphors: you can make them up as you go along.)

Then, why do we have to inflict this upon ourselves? In theory, this should tell the markets that Spain’s bonds are reliable (they have always been) so speculators will stop bullying us. They will say: “Wow, they’re ready to pay the money they owe us even if that means not paying the pensions they owe to their own citizens! They’re like a family! I’ll be nice to them and stop making loads of money on the back of their bonds.” Sure, governments are families and markets are a family’s best friend.

Will it even work? Experts are divided on the issue: there are those who think it is pure madness; and those who think it’s all right as long as you’re allowed to cheat (and then, there are the neoliberals, who are just happy to see the state melt away). After all, there is already a deficit cap in the eurozone and when Germany doesn’t respect it nothing happens. The markets themselves were nodding nervously when states incurred huge deficits to bail them out (no talk of “austerity” back then ). Ultimately, nobody knows the effects that a permanent “zero deficit” budget may have. Historically, they are about as frequent as unicorns.

The fact that Zapatero, a socialist president, is championing this measure is in itself interesting. With only three months to go before his announced early retirement from politics, he seems to be seized by a sudden ideological death wish. Failure has gone to his head, so to speak. You can even sympathise with his predicament, getting harassing phone calls from Angela Merkel and shot through by the debt markets like a Saint Sebastian. But the whole point about being a martyr is that you suffer for your ideas, not those of your opponents. That’s called a convert. Not the same thing.

Because that’s what this whole thing is about. We’re talking about beliefs, symbols. Rewriting the constitution won’t do anything to improve Spain’s deficit but it will leave, set in stone, a commitment not to pursue a social democracy. It’s like having forever the markets singing in your ears Queen’s “We are the champions” in a mocking pitch. Talk about debts: that’s one we have no right to pass onto our children, even if it is just a metaphor. Governments may end up being like a family after all. But it’s no use if the family is someone else’s. © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds