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By JIM MCTAGUE | MORE ARTICLES BY AUTHOR

IT'S REASONABLE TO ASSUME THAT VOTERS in Virginia and New Jersey were attempting, when they elected Republican governors last week, to flee what they view as fiscal madness. Much of the U.S. electorate is worried about deficit spending, which has reached $1.4 trillion, and the negative consequences it portends for taxes and the purchasing power of the dollar.

You don't need to be Ross Perot to figure this out: Mutual-fund markets have been signaling panic on...