People seriously need to calm down about this whole financial crisis thing. That was part of the message Goldman chief economist, Jim O’Neill, delivered as part of a panel with economists and UK Prime Minister Gordon Brown. Why the need for the collective deep breath? Let’s start with the fact people have gotten a bit carried away with the size of the bill going to taxpayers.

“The fiscal costs of this crisis around the world, including the U.K., in my judgment are not as severe as people keep talking about,” he said

OK, so he came to a different number. There are a lot of assumptions built into those figures. Isn’t the real point that we need to address the fiscal nightmare lurking?

“It’s suddenly become very trendy to be the toughest person around, whether you’re in the private sector, or in government, or opposition, as to what we’re going to do about the deficit,” O’Neill said. “We need to get growth back, and then we can have a more sensible look at what the true fiscal position is.”

But what about all of those emergency lending programs funded by newly printed money? You can’t tell me that isn’t cause for concern.

“There’s a ridiculous stigma with the whole thing in this country,” O’Neill said. “There’s lots of other countries doing unconventional monetary policy things and people should chill out a bit about it.”

Chill out about it and do what?

“People need to be a bit more focused on reality and not be so emotional.”

And with that, Goldman’s chief economist simultaneously gave his views on the fiscal implications of the financial crisis and solved the firm’s pending bonus PR nightmare.
Goldman’s O’Neill Says Crisis Fiscal Costs Are Exaggerated [Bloomberg]