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.

Presented by

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

Life as an Obama Impersonator

"When you think you're the president, you just act like you are above everybody else."

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

VIdeo

Life as an Obama Impersonator

"When you think you're the president, you just act like you are above everybody else."

Video

Things Not to Say to a Pregnant Woman

You don't have to tell her how big she is. You don't need to touch her belly.

Video

Maine's Underground Street Art

"Graffiti is the farthest thing from anarchy."

Video

The Joy of Running in a Beautiful Place

A love letter to California's Marin Headlands

Video

'I Didn't Even Know What I Was Going Through'

A 17-year-old describes his struggles with depression.

More in Business

Just In