Austan Goolsbee is Brilliant, But is He Right?

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In response to Jack Welch calling the Obama budget "from the moon," Austan Goolsbee, Obama's silver-tongued economic spokesman, shot back:

"Look, we enter the government essentially in a hotel that is on fire. We're throwing people from the windows into the pool to save their lives and this is the evaluation of the Olympic diving committee."

Zing! But Goolsbee isn't really answering the question:


Let's take these two arguments together: 1) That we've successfully avoided a second Great Depression and 2) That Obama's budget is nuts. These things can both be true, can't they? One can believe that, through the Fed, the bank bailout, the stimulus and everything we've done up to this point, that we have counteracted the deflationary cycle, kept the banking system from imploding, mitigated job losses, cushioned consumer demand and generally avoided disaster.

But isn't is also possible to simultaneously believe that Obama's budget -- a $3-plus trillion affair that will certainly dig a deficit approaching $2 trillion -- packs a too-devastating punch for a still-weak economy? No matter what you think about the budget, there is certainly a lot of "investment," in education and health care and energy, that aims for dividends that we hope will close the deficit when they materialize. A part of me thinks this is exactly the kind of investment we need. Another part thinks, That really is an intimidating amount of spending

I'm not saying that that the stimulus worked (tough case) or that the budget is crazy. I'm saying that merely as a debate point, it is unconvincing that avoiding calamity to this point is a case for a budget that's hardly been appropriated yet. It is, to riff on Goolsbee, a bit like saying that since the first batch of people have been safely tossed from the burning building, the rescue workers are now justified to throw out anything they decide, whether it's pets, the kitchen sink, or the entire living room.

Via The Stash.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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