Economic historian Niall Ferguson says Keynesian economists are stuck in the 1930s, completely unaware that a US debt crisis could come quite suddenly.

“All it takes is one piece of bad news — a credit rating downgrade, for example — to trigger a sell-off,” Ferguson writes in the Financial Times.

“And it is not just inflation that bond investors fear. Foreign holders of US debt — and they account for 47 percent of federal debt in public hands — worry about some kind of future default.”

Yet some economists “seem not to have noticed that the big academic winners of this crisis have been the proponents of behavioral finance, in which the ups and downs of human psychology are the key,” says Ferguson.

As evidence, he points to a recent poll showed that 45 percent of Americans “think it likely that their government will be unable to meet its financial commitments within 10 years.”

“The remedy for such fears must be the kind of policy regime change . . . which the Thatcher and Reagan governments successfully implemented,” Ferguson argues.

“Then, as today, the choice was not between stimulus and austerity. It was between policies that boost private-sector confidence and those that kill it.”

The fear of deficits is ruling the world, and we are seeing a global extension of the Reagan-Thatcher agenda, says Bob Samuels, president of the University Council-AFT, a college instructors' union that presents the University of California.

“Part of this strategy is to first run up huge deficits through tax breaks to the wealthy and increased defense budgets, and then claim that due to deficits, social programs have to be cut,” Samuels writes at the investingcontrarian.com.