Leave the Deficit Hawks Alone! (Some of Them, Anyway)

Slate's biz man Daniel Gross delivers an ornithological smackdown to Washington's flock of deficit hawks. It is very amusing! It is also, like the morning bird who starts chirping outside my bedroom window around 6AM every morning, prematurely and cloyingly cheery. Chirp away, Mr. Gross...

A once-endangered species is staging a robust comeback: the deficit hawk. Hunted nearly to death during the Bush years, many varieties not seen in Washington in a decade are now perching on branches and dropping their wisdom. Look, there's the puff-chested congressional peacock hawk, frequently seen strutting about Sunday-morning-TV-show sets complaining about pork while emitting loud honks on the receipt of stimulus funds. The furrowed-brow warbler hawk (natural habitat: the op-ed pages) loathes deficit spending for the purpose of eliminating social injustice but loves it when the spending is used to finance military actions abroad. The blue-bellied partisan hawk nests in think tanks; it goes mute when members of its own party run the show but squawks loudly when opponents run up debt. On Nov. 3, birders sighted the rare skinny parrot hawk, which repeats back calls about fiscal probity. Said President Barack Obama on that date: "The government is going to have to get serious about reducing our debt levels."

Ha! Daniel Gross, you are a very good writer! But you have also fallen into the MSNBC/Daily Show trap of mistaking the discovery of hypocrisy for the making of a meaningful point. Yes, many Washingtonians are hypocritical about the deficit. But that doesn't make their underlying concerns wrong. The federal government should be stepping in to replace slacking spending among consumers and state and local governments. But we also have a very, very serious medium- and long-term deficit problem that will require some serious hawks to emit loud honks. Gross writes:

The consensus of economists and politicians has continually underestimated the strength and timing of the recovery. So as the recovery rolls on, we'll continue to see more upside surprises.

Each sentence above has its own problem. First, one consensus of politicians was that unemployment would hit 8 percent with a stimulus and 9 percent without a stimulus. Ten months, and numerous stimuli later, unemployment has hit 10 percent. That's not underestimating the recovery. Second even if Gross were right about the strength of the recovery, that second sentence is a classic problem of induction. That third quarter GDP was surprisingly strong says nothing about the future economy. It says merely that third quarter GDP was surprisingly strong. Gross continues:

The Obama administration forecasts that the economy will grow next year at a 2 percent rate and produce a $1.5 trillion deficit. But if the economy grows more rapidly, at 3 percent or 3.5 percent, it's plausible that the deficit will shrink by 10 percent to 20 percent on its own.

That is not comforting! The Obama administration has consistently underestimated the severity of this recession, missing projected unemployment by two percentage points the deficit by a couple hundred billion. And the best palliative Gross can offer is that even if GDP growth is 50 percent better than the government expects, our deficit will be only $1.35 trillion in 2010? Not cockle-warming.

Ultimately, our deficit situation is simple to describe and complicated to execute. We need to keep spending to prime consumer demand and rescue state and local budgets as we round out of the recession. And then we need to start talking about government revenue. Our current spending and long-term entitlement inflation is serious. Cutting entitlements for the AARP is political cyanide. That leaves one option: new taxes. Sooner than you think, we'll need the deficit hawks to get creative with their squawking.