Several readers have objected to my view that tackling the long-term debt is obviously the biggest issue now on the table. What about unemployment, they understandably ask? Well, I'm not an economist, but it strikes me that the options for more aggressive spending to prop up demand (and thereby reduce unemployment) are limited (for both political and economic reasons). QE2, extension of the Bush tax cuts for a year or two, and continued unemployment benefits, with a little jawboning on the Chinese currency, is about as good as we're gonna get.
What we're missing is the long-term confidence to spend and invest. And showing that there is a light at the end of the Bush-Cheney debt tunnel would definitely help. Here's Christina Romer on this in the NYT:
The more genuine source of tax uncertainty is related to the government’s long-run budget deficits. Congressional Budget Office projections show that the current budget trajectory is grossly unsustainable. The tax changes required to balance the budget in the future could be modest or enormous, depending on what happens to spending.
Simply promising not to raise taxes wouldn’t be helpful. The American people are wise enough to understand that wishing won’t make the problem go away. The only way to resolve this fundamental uncertainty is to enact a credible long-run deficit reduction plan that shows what spending will be cut and what taxes will be raised, once the economy returns to full employment.
You can accept all of Ezra Klein's points on avoiding debt-hysteria, and still see the clear and powerful current economic reasons to address the future now, before it decides to address us.