“Hope” wasn’t just a major theme of Barack Obama’s 2008 presidential campaign. It also might be a one-word summation of the 2010 midterm campaign strategy devised by the White House and Democrats on Capitol Hill. They hope voters get more comfortable with healthcare reform. They hope voters really care about the technocratic bank bill. And, most importantly, they hope voters begin to sense some impact of a slowly recovering economy on their personal financial situation.
National Review’s Stephen Spruiell makes the following point:
Italy (debt-to-GDP: 118 percent) has put together an austerity package that relies mostly spending cuts to do the heavy lifting. Portugal (debt-to-GDP: 86 percent) has put together an austerity package that relies mostly on tax increases. Because Italy is cutting spending instead of raising taxes, it has better economic growth prospects, and will bring down its level of indebtedness more quickly, than Portugal. That markets believe this is reflected in CDS spreads of 189 basis points for Italy, compared with 289 points for Portugal.