Deficit Talk: First, Take the Medicine

Kevin Drum writes that proponents of more fiscal stimulus in the short-term should talk more about getting our long-term budget in order. Matt Yglesias responds that we face a long-term budget crisis whether or not we rescue teacher jobs this year and that the short and long term "should really be kept separate."

As a matter of rhetoric, maybe it's confusing to call for higher deficits in 2010 in the pursuit of lower deficits in, say, 2015. But as a matter of economics, that's exactly the point. As Larry Summers recently told Johns Hopkins, "Spurring growth, if we can achieve it is by far the best way to improve our fiscal position" in the next few years.

The short-term and long-term are inextricably linked. To balance our long-term budget, we need tax increases and spending cuts. But we can't safely start until the economy gets going and unemployment comes down, which is the intention of the short-term stimulus.

Conservatives don't think that stimulus is the right way to grow the economy in the short-term, but that's a tactical controversy and a separate debate. It doesn't change the fact that the U.S. economy is a patient in need of future surgery and we can't operate until we're confident the body can withstand the procedure. I don't think it hurts the administration to carefully and clearly explain that it is their unambiguous position that short-term deficits are a medicine we need to take and long-term deficits are an addiction we need to kick. But first: America, take your medicine.

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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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