More Jobs vs. More Debt is No Contest

The Washington Post's Robert Samuelson has some bizarre analysis for the Obama administration on the day of its long-awaited job summit.

In the short run, [economist Mark] Zandi doesn't worry about the effects on the federal budget deficit, because borrowing by consumers and companies is so weak. But the perception that the administration will tolerate, despite rhetoric to the contrary, permanently large deficits could ultimately rattle investors and lead to large, self-defeating increases in interest rates.

This is a weird non sequitur.

Samuelson says (1) that we shouldn't worry about a job bill hurting the deficit, but (2) we should worry about investors' perception that the job bill would hurt the deficit. First that's lazy thinking. If Samuelson can't find evidence that a job bill would hurt our ability to fight our long-term deficit, he shouldn't be arguing the opposite. Second, where is Samuelson seeing rattled investors anyway? Short-term interest rates have dipped below zero, which is basically like investors paying for the privilege of buying US debt. Long-term interest rates are remarkably low, which tells me that investors see US debt as the safest bet in town.

We do have a long-term debt crisis. And it has nothing to do with a one-time job stimulus bill for the next 18 months. It has to do with too much spending we've already committed to (mostly from entitlement inflation) and too little revenue over the next 10 to 20 years. If Samuelson's concerned about addressing that crisis, let's hear some ideas for spending cuts and revenue boosts. I'm collecting!

Oh, and then there's this:

More important, [Obama's] decision to press controversial proposals (health care, climate change) was bound to increase uncertainty and undermine confidence. Some firms are postponing spending projects "until there is more clarity," Zandi notes. Others are put off by anti-business rhetoric.

Again, this isn't evidence, it's pure speculation. Samuelson is forced to write that health care reform "was bound to increase uncertainty" because he has no evidence it actually has. Of course firms are postponing spending projects -- we're barely out of the worst recession in half a century. Who is put off by Obama's anti-business rhetoric, and what was it? I don't know. The White House has spent the last year using bottomless government coffers to rescue the financial system; spending hundreds of billions of dollars to bail out consumer banks like BofA to rescue our consumer and commercial lending; advancing billions in* loans to small businesses, especially in energy; and trying to pass legislation that encourages employers to reduce their health care premiums while presiding over a roaring six month stock market. And you're telling me that businesses aren't hiring because the House passed cap-and-trade? Come on.

*Corrected, from "of."