Should Obama Scare Americans About the Debt?

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President Obama is stuck between a necessary deficit and a ballooning debt, and it's hurting his ability to explain his economic policies. On the one hand, he wants to defend his latest budget, which comes with a $1.6 trillion deficit. On the other hand, he's created a panel to brainstorm ways to make his deficits smaller. That's not a substantively hypocritical position -- it's perfectly reasonable to run short term deficits and also worry about the long-term debt -- but rhetorically, Obama has twisted himself into a pretzel. He's actively trashing the idea of red ink as its pours out of his budget.

To get a better feel for the issue, I emailed with Jamal Simmons, a Principal at the Raben Group, who has worked in politics and communications for 15 years. Here is our discussion:


Plenty of folks blame uber-partisanship in Washington for the unwillingness to do anything about the budget. But you think there are understandable incentives for politicians to avoid making hard choices and taxes and spending. Explain.

When political leaders examine the history of past efforts to deal with budget deficits there are negative lessons to be learned. President George H.W. Bush struck an agreement with Democrats in 1990 that reversed his "no new taxes" pledge and he was defeated in 1992. The Democrats in Congress passed a budget in 1993 that also helped close the budget deficit and they were thrown out in 1994. It will take an external factor like the one Ross Perot became in the early 1990's to push the political system to act.

Obama likes to remind listeners that he didn't create this country's dire fiscal situation. And it's true. But he does own it. Do you think it makes Obama look weak to blame a budget he wrote on a former president?

It doesn't make him look weak. Americans tend to have short memories and someone has to remind them that Republicans created this mess and they should help clean it up which they are not.

Imagine you're Obama's speech writer: you have to make the case that your budget with a $1.6 trillion deficit is defensible, but that we need to start thinking seriously about reforming our long-term debt. How do you thread that needle rhetorically?

The President is the best speechwriter I know. He can find the words.

At the Peterson-Pew conference on Tuesday, it seems you and the other panelists agreed that the time to scare Americans about the debt is now. But what if that's wrong? What if scaring Americans about the debt is wholly counterproductive when running trillion-dollar deficits for the next few years?

I disagree that Americans need to be scared. Americans need to be informed. One of the things people liked about candidate Obama the most is that he spoke to us like adults. If he or someone else lays the case out and provides a reasonable course of action, Americans will make the right adult decisions. The problem is the political leaders will have to take lollipops out of our hands and nobody likes to do that.

Let's talk about Republicans. Their behavior has been occasionally stunning. They shut down the federal govt in 1995 to force Medicare cuts, and now they're against Medicare cuts. Seven Republicans sponsored the deficit commission and then voted against it after Obama endorsed it. They are, and likely will be, against anything that can be seen as an accomplishment for the administration. Against an obstructionist majority like that, what sense is there to push any kind of serious debt busting plan?

If the GOP wins seats this year, they will bear more responsibility to govern. If they choose not to, I am sure the public will punish them for it. It's time for a few leaders to emerge on the Republican side of the aisle. The country needs them.

What would your debt-busting wish list look like? VAT, Medicare means-testing, defense cuts ...

Everything should be on the table. No sacred cows.

___
Read my last interview on the debt, with Reagan's CBO director Rudy Penner. Penner explains what a responsible budget would look like in 20 years if we followed the Republicans lead and refused to raise taxes (or, alternatively, refused to cut spending). The results are shocking.

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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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