At the Peterson Foundation Fiscal Summit in Washington DC today, most panelists tried to distingiush between necessary short-term deficits and harmful structural long-term deficits. "I think Americans are smart enough to think about two things at the same time," former CBO director Alice Rivlin said.
Later in the event, OMB director Peter Orszag got the short- long-term thing right, but Peter Orszag isn't the federal government's top spokesperson on economic policy. That's the president. And a key part of explaining the motivation behind the deficit commission is explaining that Americans need to look at deficits with bifocals. In the short-term, they're good. In the long-term, they're not good. It's not so hard to say that, but comparing federal shortfalls with families in debt is so ingrained in the way presidents talk about the deficit that we can't get away from it, even when the president is implicitly asking us to live with red ink for a while.