We are in Trouble. The Deficit is the new Saddam Hussein.

[Kurt_and_Hunter]

I think this:

• The federal budget deficit is currently the only thing preventing a slide into a calamitous deflationary spiral and depression.

• Greatly increasing the deficit short-medium term is necessary to have any hope of restoring consistent growth above 3% or unemployment under 8% any time soon.

Some disagree with those two statements, of course. Republican psychos all disagree. A lot of self-styled "serious" Democrats also disagree, ranging from Blue Dogs to chronic middle-of-the-road trimmers like the President to even a surprising numbers of liberals who have to face the voters any time soon.

Those folks are wrecking America and it appears they will be given carte blanche to wreck it a lot more.

The anti-deficit thing is a mass hysteria. Nobody cites any evidence of the relative harm the deficit is doing or will do in the context of the real economic world as it exists today. (Nor could they... there isn't any.) The attitude is boot-strapped from greed/ideology into a rolling "argument from authority."

If Greenspan says it then maybe I should say it... if Obama supports it it can't be off the rails crazy...

Next thing you know Robert Rubin is on TV talking about how more stimulus is bad because it might create uncertainty! Well, insofar as it might change the reliable 1% GDP 10% unemployment path we are probably locked into, yeah. It might create uncertainty.

Is it possible that a majority of solid mainstream people can set aside all facts and logic to embrace a mass hysteria that promises only ruin for America?

How likely is it that I am right about the economy while Rubin and Summers and Greenspan and all business leaders and a plurality of Democratic leaders are insanely, delusionaly, disastrously wrong?

Well, when we consider that the view ultimately benefits the top 1% of parasitic rich it isn't quite as random as it seems. There are some who actually gain from 0% inflation and high unemployment. They are like Dick Cheney in 2002 vis-a-vis Iraq. There were some who wanted to invade Iraq independent of the WMD fantasy.

The perversely disaster-interested provide the seed of respectability. They pressure their friends to join in. Academics and experts are bribed with grants and TV time. People who wouldn't believe Cheney if he said water was wet find themselves taking a serious look because now respected experts are involved. Next thing you know the madness has become a "serious" viewpoint. Then everyone rushes to embrace it because whether it is true or false it has the ring of the sort of thing the electorate is easily conned into believing. And so on.

I might be more chastened to consider that maybe 2+2=5 because so many smart people say so if it were not for the fact that seven years ago I saw the clear majority of foreign affairs and military and intelligence experts and all Republicans and half of Democrats line up behind the proposition that we had to invade Iraq.

Same... fucking... deal.

Indefensible gibberish and obvious falsehoods boot-strapped into the conventional wisdom with no evidence beyond the fact that everyone was in a race to not be the last person to join in the mass hysteria. To remain mainstream.

Yes, I know more about the economy that Greenspan and Rubin. I shouldn't. That is a preposterous development. I'm not even an economist.

But I wasn't an expert on weapons proliferation when I dismissed Colin Powell's UN presentation about Iraqi WMD. I was just a guy with a working brain and no reputational skin in the game. Having no public need to be considered "serious" I could just watch the presentation with a somewhat innocent eye. (And viewed with that perspective one noticed things, like that the two photos Powell presented showing the Iraqis taking stuff out the back door of a facility while the UN inspectors came to the front door were plainly dated months apart. It was printed right on the freaking pictures!)

Boot-strapped. "If Colin Powell believes it... if John Kerry believes it... if the Clintons believe it..."

No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No. No.

Any concern for the terrible downside of the deficit is, at this point in time, no smarter or even notably less destructive than concern about Iraqi WMD was in 2002-2003.

And worst of all... We have seen the same pattern of the people who said there were no WMD being dismissed as crazy even after they were proved right! The Krugman / Roubini / Stiglitz type economists have been proved right at every turn but are still dismissed.

What they said in 2008 was outside the mainstream, hence they were crazy. They turned out to be right. But craziness is a socially defined phenomenon... it is about level of conformity. So even though they were obviously RIGHT they still showed a willingness to be "crazy" at the time and are thus perma-dismissible.

Meanwhile, the tea-baggers are the group most opposite to Krugman / Roubini / Stiglitz type economists. They are not notable economic thinkers (or spellers). They are risible Klansman in less impressive outfits. But they are held by the media to represent a serious view!

[bluestateguy]

1. More obsession over the so-called "deficit"

The so called deficit is the obsession of newspaper editorial boards and Washington establishmentarians.

[earthside]

8. Ha! "So-called" Deficit .

The federal debt and the annual deficits are real ... unless you are living in some kind of "faith-based" reality where treasury bonds just don't exist or never have to be repaid.

But, ask yourself, who owns the national debt? Who gets paid the interest? Who gets the commissions from bond trading?

Not all, but a lot, of the financing of the federal debt amounts to yet another wealth transfer from the working class to the elite, corporate ruling class.

[Kurt_and_Hunter]

12. re: the elite, corporate ruling class

"But, ask yourself, who owns the national debt?"

You should recognize that the debt is a hot-potato held by the super rich. Those bonds only pay off big if inflation can be kept at depression levels.

The mega-rich are holding a ton of paper paying 4%. That means that if inflation goes to even 3% they are screwed, making a paltry 1%!

Inflation is correlated to unemployment. High unemployment benefits people who have employees and people holding bonds.

Our "reasonable" concern about the debt is driven by ceaseless propaganda from the super-rich.

[earthside]

13. Not necessarily.

Treasury Inflation-Protected Securities

http://seekingalpha.com/article/118363-tips-on-tips-treasury-inflation-protected-securities

[Kurt_and_Hunter]

19. True, but TIPS are only 8% of treasuries

In practice they are not a super deal because they do not pay-off enough. There is a cost/drag built into the TIPS protection.

http://vocuspr.vocus.com/vocuspr30/newsroom/ViewAttachment.aspx?SiteName=vanguardnew&Entity=PRAsset&AttachmentType=F&EntityID=444479&AttachmentID=e5c59f77-c80f-47e4-a0c1-95cf173dc260

Major bond investors can do better hedging their portfolios themselves so most do and TIPS demand is small.

And Treasuries are only part of the global bond universe which is all inflation sensitive.

As a general rule bond players desire very low future inflation.

[Kurt_and_Hunter]

2. ...

[alberg]

3. K&R!

[NoNothing]

4. The deficit issue is not a short term one

It is a long-term one. Juicing the deficit for a quick hit of economic stimulus may or may not be a good idea. But the issue is that long term, even under the most optimistic scenarios, we will be paying a fortune in debt service if we run these kinds of deficits for too much longer.

[wtmusic]

6. That's what Reagan did for 8 years in the 80s

and I guess now that Obama's doing it, it's OK. :eyes:

[NoNothing]

14. No, it isn't

The deficit hasn't been this large a chunk of GDP since WWII. Running deficits less than 3-4% of the GDP is fine because you can basically cancel them through economic growth. But too much higher than that can only be done for a short time.

http://www.usgovernmentspending.com/federal_deficit_chart.html

[Kurt_and_Hunter]

16. If the GDP were larger that ratio would decline somewhat

In a major economic downturn the deficit as percentage of GDP always explodes. The downturn requires deficit spending and the GPD is down.

If our GDP stabilizes at 0%, which seems to be the objective of the deficit hawks, the deficit would be infinity percent of GDP.

(Curious... in a year when GDP is negative is the deficit an irrational number?)

[NoNothing]

18. GDP could only be negative if more was destroyed than was produced

It would take some kind of catastrophic war or something.

I think you're thinking of GDP *growth*. Growth goes negative when the GDP, while still huge, was less than last year. So if it goes from 15T$ to 14T$, then growth is negative even though total GDP is still +14T$.

Deficit as percentage of GDP is calculated simply by dividing the dollar amount of the deficit by the dollar amount of the total GDP, e.g. 700G$/14T$. GDP growth is irrelevant to this measure.

[Kurt_and_Hunter]

20. You are correct. I was being silly.

It was a jest, but baddly presented.

You are quite right that GDP couldn't go negative barring asteroids or something.

[wtmusic]

21. The GDP is not a percentage.

GDP = Gross Domestic Product. The US GDP in 2009 was $14.25T, give or take a couple hundred $billion.

The GDP is never negative.

[wtmusic]

24. Debt is never "basically cancelled" by economic growth.

Debt can stimulate economic growth, but it doesn't go away. You and I are both still paying for debt Reagan incurred in the 1980s.

[NoNothing]

25. If it's less then growth

It is automatically financed by follow-in increases increase in government revenue. Granted, you still have to pay for it - that financing cant' go toward towards other things - but it doesn't cost anything additional beyond pre-debt baseline spending.

[wtmusic]

27. A reckless strategy long-term.

Though debt is a very forseeable cost - we can calculate debt instruments out for decades - we can't calculate unforseeable economic conditions.

In a recession that once cheap debt can get expensive, even catastrophically so.

Think Ponzi/Madoff.

[Kurt_and_Hunter]

10. Mistaken

The debt of the world's largest economy with a sovereign currency does no behave like Harry Homeowner's credit card.

We sell our debt for exactly what it is worth. The interest is very nearly a break-even proposition versus expected inflation.

(If we can get our economy up to the normal 3-4% inflation rate that will be necessary to decreasing unemployment we will actually profit from a lot of recently incurred debt! We are paying incredibly small interest rates these days.)

What you describe could only happen in a persistent deflationary environment.

And the surest way to create a a persistent deflationary environment would be to take the mistaken view that the long-term debt service argues for not doing everything possible to avoid deflation.

The cure is the disease.

[NoNothing]

15. If inflation goes up

We will only profit from incurred debt if we STOP borrowing at the new, higher rates. But we cannot stop borrowing if we are running large deficits. So in the end, higher inflation on its own doesn't do much at all to improve government finances in the face of large deficits. A much more serious problem occurs when the debt becomes large enough to cast serious doubts on the ability of the government to finance it. Then interest rates will be high relative to inflation, and maintaining the same deficit becomes even more expensive.

[Kurt_and_Hunter]

17. If your argument is that we shouldn't run infinite deficits forever...

then nobody will disagree.

Is anyone proposing huge deficits forever?

Nobody I've ever heard of.


It is always important to recognize the effect the economy has on revenue.

Without somehow creating above trend GDP growth for a series of years (like in the 1990s) we cannot reduce the deficit (like in the 1990s).

Without solid and durable GDP growth the situation is utterly hopeless no matter what we spend or what our tax rates are.

Thus the focus must be on stimulus above all things at this point in time... it is not only the most humane course, it is also the most responsible position for a deficit hawk

[NoNothing]

22. Obama's own budget

Specifically table S-9, forecasts that increases to the debt never fall below $500 billion in the next 10 years. And this is supposed to be during the supposed economic good times, when we should be reigning in the debt. EDIT: According to Keynes.

[Kurt_and_Hunter]

26. Cutting spending will make those out-years even worse.

Reigning in the deficit will, unfortunately, be a generational problem.

Whatever "supposed economic good times" are being predicted for the next ten years as a basis for those budget projections are shockingly low growth years.

IIRC, the treasury projections are 2-3.5% annual GDP growth going out forever. That kind of growth can't reduce the deficit, let alone the debt.

I think 1983 was over 8% growth. The 1990s saw a lot of 5-6% action.

Those are the kind of recovery numbers we need to begin to get a handle on anything. As you note, current growth projections show that the deficit is not going to get better.

I do not think the deficit doesn't matter categorically. It doesn't matter now relative to the harm in the alternatives. Unless someone can think of a method other than deficit spending to try (with no guarantee of success) to get the kind of growth started that can organically reduce the deficit then deficit spending is key to any eventual hope of reigning in the deficit.

If we blow ot spending today will we be responsible and reign it in during the good times? As a political reality, of course not. But we should create conditions where at least future political leaders will have the option of doing the right thing. If the future good-times option to reduce the deficit doesn't exist then we know nothing will be done.

What makes this topic so frustrating is that deficit hawks should be focusing on growth as the only method that can actually fix our balance sheet, but growth is--in a downturn of this magnitude--inextricably tied to deficits.

I genuinely believe that current deficit concerns (2010) will result in truly huge-huge-huge deficits in 2020.

Throw another downturn in the ten year budget projections you referred to and those projections will go much further south.

[NoNothing]

31. No, the nineties never broke 5%

And 1983 broke 7%, not 8%.

According to the http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=1&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=2009&LastYear=2010&3Place=N&AllYearsChk=YES&Update=Update&JavaBox=no#">USDOC

So the question is, even if we stimulate the hell out of the economy, how likely are we to see 5-6% growth rates? I think, not very.

We're basically stuck in a sort of prisoner's dilemma: IF stimulus will result in huge growth, then the best course is to stimulate. But if it doesn't work, we will be in even worse shape than if we didn't stimulate, making future stimulus even harder.

[Kurt_and_Hunter]

34. My bad

A while back I was studying all the quarterly % figures 1980-today to get a handle on the sort of individual quarters we should be seeing right now and obviously mis-remembered.

(I was also doing a thing of looking at different consecutive 4-quarter periods)

Coming out of the 1981 recession there was a series of eye-popping quarters, but no year made it to 8.

The late 1990s saw a lot of 5%-8% quarters, but as you correctly note, no years over 5%.

My bad.

That doesn't change the general point though--merely re-calibrates it.

If we need a series of 4-5% GDP growth years to reduce the deficit that's more achievable than 5-6%, but still nothing anyone is predicting.

I doubt any forecaster is predicting any year over 4% for the US out of the next ten. (The bond market sure doesn't seem to be expecting anything.)

My bad numbers aside, the point remains that 2-3% will not do anything for the deficit going forward.

Ads for the prisoner's dilemma, all prisoner's dilemmas get down to a game of weighting/quantifying the outcomes.

The downside is, to my mind, minimal. If we never see any above-trend growth then we are really screwed. Kids not going to college. People unable to contribute to their retirement. Faltering infrastructure. The safety net demands on the budget increase. To me the debt is a side-show in that scenario. We would monetize it with whatever result that entailed. (Hyper-inflation would not be a likely result.)

The US cannot exist in isolation. Whatever happens here will be happening almost everywhere which takes a lot of the Glen Beck scenarios off the table. The world's largest economy cannot be Zimbabwe.

On the other and is the hope of a global economic recovery at surprisingly little cost. To me the key is velocity. Blow out a trillion dollars in a month, any way you can. Create some inflation. Perhaps the Fed can then raise rates a little to match and regain monetary traction.

Inflation seems a minor concern to me because we have seen his story before. It is very difficult to create and very easy to throttle. (And yes, I lived through the 1970s. People hold up the 1970s as a nightmare scenario we might face despite the fact that they were superior to our current conditions!)

The real cost isn't that large provided we behave in a crazy manner. A trillion in a month is almost more than the economy could absorb. A trillion pissed out in some bogus three-year stimulus package is not a game changer but rather a safety net while we wait for the economy to recover on its own.

IMO

[wtmusic]

5. No, the anti-deficit thing is not "mass-hysteria".

Though some around here consider Democrat deficits to be superior to Republican ones - when interest on the national debt is the second largest federal expenditure after defense, there's a problem.

"The numbers? The deficit in fiscal year 2004 -- $413 billion, 3.5 percent of the gross domestic product.

Back then, a disapproving Krugman called the deficit "comparable to the worst we've ever seen in this country. ... The only time postwar that the United States has had anything like these deficits is the middle Reagan years, and that was with unemployment close to 10 percent." Take away the Social Security surplus spent by the government, he said, and "we're running at a deficit of more than 6 percent of GDP, and that is unprecedented."

He considered the Bush tax cuts irresponsible and a major contributor -- along with two wars -- to the deficit. But he also warned of the growing cost of autopilot entitlements: "We have the huge bulge in the population that starts to collect benefits. ... If there isn't a clear path towards fiscal sanity well before (the next decade), then I think the financial markets are going to say, 'Well, gee, where is this going?'"

<>

Fast-forward to 2010.

The numbers: projected deficit for fiscal year 2010 -- over $1.5 trillion, more than 10 percent of GDP.

This sets a post-WWII record in both absolute numbers and as a percentage of GDP. And if the Obama administration's optimistic projections of the economic growth fall short, things will get much worse. So what does Krugman say now?

We must guard against "deficit hysteria." In "Fiscal Scare Tactics," his recent column, Krugman writes: "These days it's hard to pick up a newspaper or turn on a news program without encountering stern warnings about the federal budget deficit. The deficit threatens economic recovery, we're told; it puts American economic stability at risk; it will undermine our influence in the world. These claims generally aren't stated as opinions, as views held by some analysts but disputed by others. Instead, they're reported as if they were facts, plain and simple."

http://www.realclearpolitics.com/articles/2010/02/11/krugman_bushs_deficit_bad_obamas_deficit_good_100258.html

[Doctor_J]

7. These would have been good points to consider when the economy

was good - like when Stupid tool office in 2001. Now all of this frugality is worsening the 2nd Republican Great Depression.

[wtmusic]

11. What frugality?

Call it what you will, Obama is buying good times - just like Reagan did - at the expense of future generations.

Somehow Clinton balanced a budget with a Republican congress, and Obama could do the same if he had the political will. This nation needs some serious medicine in the form of higher taxes - higher rates for everyone and a steeper progression - or we are doomed.

[Common Sense Party]

30. Higher taxes and drastic spending cuts.

Anone who thinks we can keep spending what we've been spending--for military AND social programs--is out to lunch.

[wtmusic]

32. Bingo.

If we ended two wars tomorrow, we'd be more than halfway there.

[Kurt_and_Hunter]

36. Or what? What will happen?

People say we "can't" keep doing something but what exactly do you think will happen if we do?

In weighing options it is necessary to weigh results.

One one hand we have global economic horror show.

The other side of the scale must be quite dramatic to balance that.

[NoNothing]

39. From the CBO

http://cboblog.cbo.gov/wp-content/uploads/2010/07/07-27_Debt_FiscalCrisis_Brief.pdf|Federal Debt and the Risk of a Financial Crisis, CBO, July 2010>

More generally, persistent, large deficits that are not related to economic slowdowns—like the deficits that CBO projects for coming decades—have a number of significant negative consequences. Therefore, the sooner that policymakers agree on credible long-term changes to government spending and revenues, and the sooner that those changes are carried out without impeding the economic recovery, the smaller will be the damage to the economy from growing federal debt.

Crowding Out of Investment

One impact of rising debt is that increased government borrowing tends to crowd out private investment in productive capital, because the portion of people’s savings used to buy government securities is not available to fund such investment. The result is a smaller capital stock and lower output and incomes in the long run than would otherwise be the case.

The effect of debt on investment can be offset by borrowing from foreign individuals or institutions. But additional inflows of foreign capital also create the obligation for more profits and interest to flow overseas in the future. Thus, although flows of capital into a country can help maintain domestic investment, most of the gains from that additional investment do not accrue to the residents.

Need for Higher Taxes or Less Spending on Government Programs

Another impact of rising debt is that, as government debt grows, so does the amount of interest the government pays to its lenders (all else being equal). If policymakers wished to maintain government benefits and serviceswhile the amount of interest paid grew, tax revenues would eventually have to rise as well. To the extent that additional tax revenues were generated by increasing marginal tax rates, those rates would discourage work and saving, further reducing output and incomes. Alternatively, policymakers could choose to offset the rising interest costs, at least in part, by reductions in benefits and services.

To be sure, slowing the growth of government debt to hold down future interest payments would require increases in taxes or reductions in government benefits and services anyway. However, earlier action would permit the changes in policy to be smaller and more gradual, and it would give people more time to adjust to the changes—although it would also require more sacrifices by current generations to benefit future ones.

Reduced Ability to Respond to Domestic and International Problems

Having a small amount of debt outstanding gives policymakers the ability to borrow to address significant unexpected events such as recessions, financial crises, and wars. A large amount of debt, however, leaves less flexibility for government actions to address financial and economic crises, which, in many countries, have been very costly to the government (as well as to residents).5 A large amount of debt could also harm national security by constraining military spending in times of crisis or limiting the ability to prepare for a crisis.

In the United States, the level of federal debt a few years ago gave the government the flexibility to boost spending and cut taxes to stimulate economic activity, to provide public funding to stabilize the financial sector, and to continue paying for other programs, even as tax revenues dropped sharply because of the decline in output and incomes. If the amount of federal debt (relative to output) stays at its current level or increases further, the government would find it more difficult to undertake similar policies in the future. Moreover, the reduced financial flexibility and increased dependence on foreign investors
that would accompany a rising debt could weaken the United States’ international leadership.

[Kurt_and_Hunter]

40. Nothing there that much disagrees with what I'm saying

I am not responding to you here, but to this document that you did not author.

Between the vapid Republican talking points herein you will note that the CBO is careful to say only that it would be dumb to run gigantic deficits in a peacetime economic boom. I think everyone agrees with that so it is all meaningless and almost tautological.

"More generally, persistent, large deficits that are not related to economic slowdowns—like the deficits that CBO projects for coming decades—have a number of significant negative consequences."

Yes. Everyone agrees with that. It has nothing to do with optimal policy today, which is related to on helluva "economic slowdown".

"One impact of rising debt is that increased government borrowing tends to crowd out private investment in productive capital..."

The crowding out thing is a long-standing and oft-refuted RW talking point. Such crowding out would be manifested in price (interest). There is no data to suggest that anyone is being denied a loan or paying higher rates because the government is hogging all the credit. There is currently about a trillion dollars lying around un-borrowed/un-lent.

The reason people cannot get credit in today's world is because banks do not believe they will be able to pay back the loans because th economy sucks and in a flat GDP flat inflation environment there is no mechanism for the economy creating the interest on loans to repay them, not because of a shortage of general lending capital. When loans are made they are dirt cheap. Mortgages rates are at record lows... if you can get one.

There is much less borrowing in the US than there was 2 years ago. The government's "hogging" of the credit markets has consisted of borrowing up only a fraction of the vast decline in private borrowing.

A world where this crowding out existed would be a world with a growing economy and high demand for credit. And in such a world we would not need to run the same deficits.

Could such crowding out exist theoretically? Yes. But it has nothing to do with policy in the real world. The effect has been grossly exaggerated by two generations of the worst RW economists. It is a non-factor except in intentionally absurd academic hypotheticals or much smaller economies than ours.

This document is, throughout, a vapid explanation of why the government cannot just run a trillion dollar deficit every year until the end of time without anything else changing... but nobody is suggesting otherwise.

"Need for Higher Taxes or Less Spending on Government Programs... If policymakers wished to maintain government benefits and services while the amount of interest paid grew, tax revenues would eventually have to rise as well."

First: "...tax revenues would eventually have to rise as well." Not rates, REVENUES. I agree. At some point the economy needs to pick up somehow which means revenues will be higher even without raising taxes.

And as to the spectre (implied) of higher tax rates? so what? Taxes should be higher. The reason they cannot be raised at the moment is the economy is so terrible, but the fact that the CBO threatens me with the prospect that taxes may have to go up to where they were for most of my life isn't sending the expected chills down my spine.

Since we hope to reduce the deficit in the good times (whenever those are) it is expected that we will cut government programs (I hope unemployment insurance payouts will go down when unemployment is no longer 10%!) and raise taxes.

"Having a small amount of debt outstanding gives policymakers the ability to borrow to address significant unexpected events such as recessions, financial crises, and wars."

That's just nonsense. Policymakers have the ability to borrow whatever someone will lend. The CBO is making an unbidden analysis of political will here. The word "ability" really is a lie. Substitute "will" or "inclination."

Is it really the claim of the CBO that we are UNABLE to borrow enough money? Really? Based on what? We will continue to be the most trusted loan re-payer in all these scary debt scenarios.

And seriusly... I am supposed to be upset about the deficit because the CBO claims it will reduce our ability to finance future WARS??? Jesus... we may have to finance these wars at slightly higher interest rates but I assume we would be willing to do so since fricking WARS are supposed to be unavoidable emergency type things.

And what is the utility of the CBO telling me the deficit today, in the biggest economic crisis in 80 years is bad because it may reduce our ability to deal with FUTURE recessions??? God lord. If deficits help you deal with recessions and we are in the biggest recession in generations then maybe deficits will help us deal with the fricking recession.

This is one of many passages here that make plain that this document does not refer to current conditions or current policy but is a general statement that Reagan and W. Bush were assholes.

I agree with that.

It is about the wisdom of gratuitously generated deficits during periods of growth.

[NoNothing]

42. Not all deficit spending is equal

You are right - and the CBO agrees with you - that maintaining spending during a recession will necessarily entail large deficits as revenues decline. Additionally, temporary stimulus spending may provide an economic benefit that will bring revenues back inline sooner than they otherwise would.

However.

This is not what the concern over deficits is about. It is about long-term *structural* deficits. Deficits caused by spending programs that will not decrease just because the economy revives. Things like stimulus spending and unemployment extensions DO NOT fall into that category - but things like health care benefits and Medicare drug coverage DO. So, granted some of the actions taken in the name of the deficit are just concern trolling, that does not excuse ignoring the problem in the short term. Even if it would be unwise to try to reign in the deficit now because we need short-term stimulative deficits, that in no way justifies ignoring the problem of long-term structural deficits. And there is a problem.

[Common Sense Party]

9. I'm much more concerned about the DEBT than the DEFICIT.

Short-term deficits during a massive economic slump? Understandable, necessary, perhaps even helpful.

No plan whatsoever to reduce the massive national debt and looming shortfalls in entitlement programs? Stupid.

[wtmusic]

23. The debt is the aggregate sum of budget deficits

By definition, you are not reducing national debt by running any kind of deficits - short-term, or other.

[Common Sense Party]

29. I know exactly what the national debt is. That's precisely my point.

Short-term deficit spending, especially during a massive recession is fine. It is.

Year after year of running deficit after deficit with no thought or concern about the gigantic national debt we're piling up, with no plan in place to reduce the debt once the recession is over, is nothing short of stupid. And Washington (both parties) has been stupid for far too long.

[Winterblues]

33. I don't buy your both Parties do it....

[Common Sense Party]

35. Show me one for Congress, who has to vote on the budget

Both. Parties. Do it.

[wtmusic]

37. At +10% so far Obama is right up there with Reagan.

Granted, productivity will lag time-wise, but forecasts predict it will level off. Not good.

[Javaman]

28. I think colin powell is going to the UN to show the deficits mobile labs. nt

[Yavin4]

38. If The Republicans Re-Gain Control of the WH

You will never, ever hear about deficit ever again, and the media will comply.

[Beaverhausen]

41. Cheney - 2004 - "Deficits Don't Matter

http://www.washingtonpost.com/ac2/wp-dyn/A26402-2004Jun8?language=printer

[sendero]

43. This is perhaps Obama's biggest test yet..

.... if we slide into the "austerity" hole, Great Depression Two is 99% inevitable.