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Sunday, February 17, 2013

We Need Better Budget Hawks

Jared Bernstein:

Why the Budget Hawks Should Retract Their Talons, by Jared Bernstein: The WaPo has another in a series of editorials warning against any complacency in our efforts to stabilize the debt. ... I disagree–here’s my view of the economics of the issue, which I think they have wrong...
But there’s another very important reason why the WaPo’s view is both dangerous and naive right now: the current Congress simply can’t be trusted to achieve deficit savings in a way that’s compatible with either growth or smart governance.
There are too many policy makers today who are driven by deep ideological opposition to government to approach this in a thoughtful way. To the contrary, they’re heavily invested in staying in deficit-freak-out mode so as to slash and burn social insurance, to push balanced budget amendments that would both rob the federal government of counter-cyclical policy and force massive sequesters, and to argue for spending caps that have no reference to the nation’s needs going forward. Arguments like the one in the WaPo simply throw fuel on their fire. ...
At such a time, with such dangerous, dysfunctional ideologues in power, we’re much better off with the modest goal of debt stabilization over the 10 year budget window (and, in fact, the spending cuts we’ve legislated already go too far...), a point that is only amplified by the recent slowing of health care costs, as this too provides us with a bit more breathing room in terms of thoughtfully addressing future budget pressures.
It’s just not smart at all to foment emergency–especially when there is none–without a lot more thought about who’s on the squad that’s supposed to respond to the problems for which you’re ringing the alarm bells. ...

We have the time to get this right, but Congress does have trouble on this issue and it's understandable that people -- who have been misled about the degree of immediate danger from the debt -- would look for a way to force progress on the long-term debt issue. But creating fake emergencies that force bad decisions, many of which will likely need to be undone later with all of the same political difficulty and controversy, is not the way to get this done. (I don't object so much to the ideology or the passion with which some people express their views, it's the means to this end that bother me. If people want a smaller government they have that right, let them make an honest argument and we'll go from there. But the "honest argument" part is far, far from being satisfied, and the press has played into the ability of the zealots to lead this charge based on false pretenses.)

    Posted by on Sunday, February 17, 2013 at 10:48 AM in Budget Deficit, Economics, Politics | Permalink  Comments (12)



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