Monday, September 12, 2011
Douthat on Obama's Do-Over
Ross Douthat offers one of the most clear and insightful breakdowns of the hopes and shortcomings of the Obama administration in his piece The President's Do-Over in the New York Times today. By focusing on a targeted stimulus without guaranteeing recovery, working on the deficit sooner rather than later by reforming entitlements, and focusing on the Recovery Act rather than attacking the health care issue by both horns, the President could have been that moderate voice of steady guidance in the storm of the 2008 recession's wake.
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3 comments:
How is the deficit a problem? How?
What evidence does anyone (including Rivlin or Douthat) have that the US deficit is a problem? None. Zero.
A.,
While most acknowledge that debt is not intrinsically a bad thing, and deficits are certainly acceptable during a recession, there is simply no logic in continuing to add to the debt and deficit without restraint.
While I don't have a great deal of respect for S&P, they fairly concluded that the US Treasury cannot be guaranteed to meet its obligations if deficits continue indefinitely.
While you are correct that people have been crying Chicken Little about the debt for decades - and no one really knows what the breaking point is - I think most Americans would prefer that deficits shrink and the debt be lessened.
Nothing wrong with prudence and fiscal conservatism. Clinton knew it, and Obama better figure it out.
"there is simply no logic in continuing to add to the debt".
Yes, there is. Public debt equals private assets. Period. If you want to increase the spending of the private sector, you need to put more money in the hands of those that spend. Where is that money going to come from if people aren't going to borrow it from banks? You can take it from those that have and aren't spending (that's called taxation of the rich) or you can have the government deficit spend - there are no other options.
(I removed the "without restraint" from your statement, because nobody that I know is suggesting spending without restraint).
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