Ezra Klein:
Our deficits aren’t as bad as Washington thinks: On Tuesday, Rep. Paul Ryan presented the budget for House Republicans…. In honor of the season, Americans everywhere will wear traditional budget-season hats and eat the customary budget-season meals, which include, of course, a rich dessert that we assume will be offset by future weight loss.
Okay, that last part is just what we do in my house. Behind all these appendix-heavy documents lurks the specter of our budget deficits, which have emerged as pretty much the only problem in Washington that both parties can agree to focus on (sorry, millions of jobless Americans). But what kind of problem, exactly, do our budget deficits present? Here are three ways to think about them:
We’re experiencing severe and measurable economic drag from today’s deficits.
We’re not experiencing measurable economic drag from today’s deficits, but we’re worried about future deficits implied by today’s policies and demographic trends.
We’re not experiencing severe and measurable economic drag from today’s deficits, but we’re worried about future deficits implied by today’s policies and demographic trends, and we’re also concerned about the likelihood of additional budget-busting policies that some future Congress might pursue.
If you guessed No. 3, then congratulations! You get a double serving of budget-season cake. Delicious.
If you are worried about (3), you (i) open up the borders and encourage immigration in order to offset adverse demographic trends (and make the world a better place), and (ii) entrench future standby trigger tax increases and spending cuts to attempt to constrain future congresses.
You don't cut spending now, when spending cuts (a) raise unemployment and (b) are likely to worsen the long-run debt picture.
The Republicans went insane when Obama was elected. And Obama helped along the dysfunction when he pivoted from economic recovery to "grand deficit-reducing bargains" in the fall of 2009. And now we are in serious trouble.
And, people in the White House: No, I do not want to hear "we are doing a lot better than Europe!" again. I have heard that enough already…
