But there’s another side to the story. The new energy minister, quoted in support of the cuts, gives the motivation as budget balancing. And the article seems to endorse him, saying in the second paragraph that the new ruling coalition is “determined to tighten spending and balance the budget in a program to grow the economy.”
Is growing the economy a good idea? Sure:
This is Denmark’s real GDP growth, quarter on quarter, since the beginning of 2011: sluggish at best and possibly returning to negative territory.
But this is an argument for increasing spending, not cutting it. There is no reputable economic theory that justifies reducing government spending as a means to accelerate economic growth. If the government of Denmark makes this claim it should be reported as a sign of either its ignorance or duplicity.
Suppose for comparison the esteemed minister had said, “We are cutting public support for renewable energy because climate change is a hoax perpetrated by a devious cult of scientists who hate capitalism and want to get bigger grants.” (Politicians in other countries have been known to claim this.) Would the Times have told us that the newly elected government is “determined to oppose the hoax of climate scientists” and leave it at that? Well, there’s no difference. BS is BS, whether it’s climate denialism or economic nonsense.
Incidentally, Denmark has vast fiscal space to maintain and even increase its borrowing to finance green investments. (The country maintains its own currency.) 10-year bonds are currently paying about .9%, which is just half a percent in real terms. Markets are eager to fund Danish debt at rock-bottom rates, so even projects with a marginally positive rate of return easily clear the hurdle.
Question: if the article had been about economics, and a government spokeman had invoked absurdities about the climate, would the Times have been as passive? Why is economic literacy optional for journalists?
UPDATE: Dean Baker is on the case too.