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Deficits and reckless minorities

Tyler Cowen calls today's David Brooks column a "favorite." But I get very skeptical whenever I read assertions like these:

Deficit spending in the middle of a debt crisis has different psychological effects than deficit spending at other times. In times like these, deficit spending to pump up the economy doesn’t make consumers feel more confident; it makes them feel more insecure because they see a political system out of control. Deficit spending doesn’t induce small businesspeople to hire and expand. It scares them because they conclude the growth isn’t real and they know big tax increases are on the horizon. It doesn’t make political leaders feel better either. Lacking faith that they can wisely cut the debt in some magically virtuous future, they see their nations careening to fiscal ruin.

That's true, in a sense: The country largely ignores deficits in boom years and becomes very anxious about them during recessions. The pity, as any economist would tell you, is that we've got it backwards. We should be intolerant of deficits in boom years and tolerant during recessions. But to offer just one example, Medicare Part D, which passed in 2003 when (inflation-adjusted) GDP growth was a relatively healthy 2.5 percent, was put on the deficit. Compare that to the way the deficit dominated the conversation over the Affordable Care Act, which passed in 2010. When times are good, people worry less about deficits.

That said, Brooks walks by some of the difficult tradeoffs here without even stopping to look. Small businesspeople might be unnerved by deficits, but they're also unnerved by GDP contraction. A small coffee shop might not like government spending in the abstract, but they really don't like closing because there are no more construction workers around to buy coffee, and so they may quite like the effect of deficit-financed tax credits for home buyers. Consumers might not like the idea of deficits, but nor do they like hearing that their kid is in a class that's twice as large this year, or that the construction on the road they take to work is going to simply stop for a while while the local government waits out the recession.

The question, in other words, is not whether anyone likes deficits. it's whether they like what would happen in the absence of countercyclical deficit spending even less.

Then there's the question of how people learn what to think about deficits. Political elites play a role here, of course. And there's been a concerted effort by the Republican Party and its associated intellectuals (not necessarily Brooks) to scare people about government spending. A party that didn't care about red ink in the expansionary Bush years became hysterical at the very sight of it once in the recessionary Obama years. Instead of being told that politicians from both parties were doing their best to see the country through an economic crisis, and that required some deficit spending for a while and then some discipline when once the danger passed, the GOP cynically opposed the stimulus and told Americans that every dollar borrowed was evidence that the political system was recklessly out of control.

Or take health-care reform. That bill, as written, is one of the biggest steps toward deficit reduction we've seen in recent years. But rather than exchanging votes for stronger cost controls, congressional Republicans told people that Congress -- which they are part of -- would block those cost controls, and then they attacked the Medicare cuts and the excise tax as a way to derail the bill. So they refrained from making the bill stronger and they told people it wouldn't work, thus worsening both our actual deficits and the psychological perception of deficit disaster that Brooks identifies in his column as a serious economic problem.

This sort of thing matters. In the paper (pdf) Brooks quotes toward the end of his column, Alberto Alesina lays down some of the conditions that seem to encourage fiscally responsible decisions. One of them, not surprisingly, is a weak minority party.

Stabilizations are more likely to occur when a crisis hits and with a “strong” government in office, a government which can overrule political opposition to policy changes and act decisively. For instance, stabilizations are more successful and easier to come by in presidential systems, in systems in which the executive faces fewer institutional veto points, in periods of unified government in which the same party holds the executive and the legislature, and in systems in which the majority of the ruling party (or parties) is large.

In systems, in other words, where the minority party isn't strong enough to interrupt the flow of events. People don't like deficits, but then, they also don't like economic crises, or 10 percent unemployment. And when the danger does pass and we can begin working to bring down the deficit, that effort will be bedeviled by the same incentives toward minority irresponsibility and mechanisms for minority obstruction that characterized the crisis.

By Ezra Klein  |  June 11, 2010; 8:56 AM ET
Categories:  Budget  
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Comments

"In systems, in other words, where the majority party isn't strong enough to interrupt the flow of events. "

Did you mean minority?

Posted by: akusu | June 11, 2010 9:14 AM | Report abuse

It's looking more and more like the Republicans are going to be the ones that need to enact massive filibuster reform. If the Dems couldn't do it with 60 votes, I really don't see them getting there with 54 (or whatever the current projection is). The GOP effort will probably be in service of something completely terrible, but it DOES need to be done.

Posted by: NS12345 | June 11, 2010 9:26 AM | Report abuse

Then a political solution is to run the deficits in the boom years, put the proceeds of the deficits in a lock box, and use them during the next downturn, so the citizenry doesn't get all antsy (or grasshoppery, or Brooksy).

Posted by: bdballard | June 11, 2010 9:40 AM | Report abuse

Ezra, the key here is 'commitments' about future when solid, iron clad cost cutting measures will be undertaken. The way deficit spending in recession is bit of a psychological drag, it is the same way articulation of firmness, fortitude and openness in accepting concrete 'cuts' in intimidate future (say tied to progress of Economy); can uplift our spirits.

I believe failure of Obama so far is identification of such measures, effective articulation of that and selling it politically.

GOP might have failed in putting solid cost controls in HCR, but nobody prevented Obama and Dems to do that. They failed there. It is a good or winning argument that I needed to add liberal spending so as to buy Dem votes. That is that Louisiana purchase and why that sticks.

Between now and late Summer, that is where Nov elections will be decided. While Obama and Dems continue to squeeze right deficit spending (like for example Obama's Small Business spending which he talks today); he needs to sale such 'big deficit cutters', not just tiny ones, with urgency. That will give people confidence in these trying times. Not only Market will look favorable to those commitments, people will have a reason to consider Democrats for their sincerity.

Otherwise, 'Comred Obama spending tax payers money' description is going to calcify.

Posted by: umesh409 | June 11, 2010 9:43 AM | Report abuse

"It is a good or winning argument that I needed to add liberal spending so as to buy Dem votes. That is that Louisiana purchase and why that sticks."

I meant to say -

"It is NOT a good or winning argument that I needed to add liberal spending so as to buy Dem votes. That is that Louisiana purchase and why that sticks."

Posted by: umesh409 | June 11, 2010 9:46 AM | Report abuse

Republicans do need to understand the value of counter-cyclical deficit spending. You are right about that. What you are wrong about is deficit spending on recurring programs that create a dependency among the people. You should only deficit spend on one time improvements such as road building, bridge building, running broadband lines, and buying information technology systems.

You don't borrow for recurring expenditures. That practice is very dangerous.

Posted by: lancediverson | June 11, 2010 9:49 AM | Report abuse

Once again, conservatives prove themselves obsessed with "feelings" to the exclusion of real-world impacts.

When it comes to business expansion, it matters MUCH more if you have customers than if you feel the government is out of hand.

I'm sure at the margins it matters a bit. But overall, the reason we have are still mired in the recession isn't because people who would otherwise expand are hunkering down, waking up every night worried about deficit spending.

I mean, people open up cafes in WAR ZONES. I don't know how much more "out of control" a government can get than that, yet when business sees an opportunity, people move in.

The reason business isn't expanding is because business is bad. We had a massive bubble pop which led to real world displacement, and this displacement is being exacerbated by banks which aren't lending because they are still dealing with the fallout of the bubble.

Yeah, people are worried about deficits now. And they're worried about immigration, too--does that mean immigration caused the recession? No, it doesn't.

This is just stupid. Republicans have a story line on how the world works, and no amount of evidence will ever dissuade them. It's based on THEIR feelings. They're like 8 year olds.

Posted by: theorajones1 | June 11, 2010 9:51 AM | Report abuse

akusu, he means 'majority' in a situation where the majority isn't strong enough to overcome the minority - i.e. the state our government is in right now. Dems have a majority, but the minority is strong enough to disrupt the process & keep the majority party from actually solving the process. The allegation, which is fair & accurate, is that the Repubs are playing politics in thwarting the Dems, making it difficult for the Dems to pass legislation that would actually solve the problem. The Repubs seem to think they are better off making things worse so they can blame Dems for the problems than in working together to solve the problem & sharing the credit.

Posted by: bsimon1 | June 11, 2010 9:52 AM | Report abuse

It's true that any geopolitical entity which failed to be "intolerant of deficits in boom years" now lacks the reserves which might enable prudent spending in times of lean. It's equally true that the current issues would not exist if nations had restrained their wasteful spending on now-bankrupt welfare programs.

Historically, there have been arguments that a time of lean calls from a strong, autocratic central government to control every aspect of life. Such arguments have proven faulty in Germany and Russia, for example, where governments rising to power during economic turndown caused total loss of personal liberty. It's not a model worth re-trying.

Many social programs, such as the now admittedly deficit-increasing PPACA, are simply unsustainable. By facing the fact that not everyone can have everything, the greatest number get the opportunity to survive: trimming the welfare state -- reversing virtually all Johnson-era welfare programs -- might be a step in the right direction.

Posted by: rmgregory | June 11, 2010 9:55 AM | Report abuse

Ezra said:
"Or take health-care reform. That bill, as written, is one of the biggest steps toward deficit reduction we've seen in recent years."

Ummm, Ezra, that bill as written is a pile of head-scratching math, and anyone who can use a calculator knew that this bill would end up costing exponentially more than was estimated. Remember the vaunted CBO report that Nancy & Co. waived around the week of passage, claiming a deficit reduction of $143billion in the first 10 years? A few quietly posted stories in the past two months have already turned the $143 billion deficit reduction into (at least) a $200 billion dollar deficit ADDITION, by my math.

Exhibit A: the "bill as written" included $5 billion to establish temporary high-risk pools until their permanent equivalents come about in 2014. The $5 billion was supposed to cover the cost for 4 years of this small part of the bill. In early May, health care experts (including those employed by the government) warned that the $5 billion might be exhausted within the 1st year! More foreboding, the supposed 'nonpartisan' National Institute for Health Care Reform (funding mostly by the UAW and other labor unions), who are obviously sympathetic to this administration, said this high-risk pool program could end up costing approximately $130 BILLION DOLLARS! And yet the 'bill as written', included only $5 billion for it.
http://www.nihcr.org/news_High-RiskPools.html

Exhibit B: the "bill as written" pretended that the 21% Medicare rate reduction would happen, and the Democrats made the CBO include that assumption in their report. But I knew it would never happen, and you knew it would never happen. And sure enough, they are now adding that spending back under separate cover. Estimated cost that should rightfully be tacked on the "bill as written": $220 BILLION.

Exhibit C: what Nancy and Obama didn't say about the CBO report was that it included a disclaimer that there were no costs included in the bill for administering the programs it authorized. (imagine working up a budget to build a new house, but purposefully excluding the cost of design and labor. You only show your wife the estimated cost for land & materials!)
In May, long after the ruckus quieted down, the CBO finally issued a report estimating these administration costs would run at least $115 billion...and possibly twice that amount. Ezra posted a nice spin at the time of how the $115 billion wasn't really a $115 billion, but what he didn't mention was that the CBO admitted they still have not estimated all of the possible extra administrative costs that will burden the IRS and other government agencies who will be burdened with enforcing the "bill as written".

So Ezra, how long are you going to continue claiming that health care reform will reduce deficits, when anyone with a 4th grade level achievement in math knows by now that the claim is a lie?

Posted by: dbw1 | June 11, 2010 9:57 AM | Report abuse

lancediversion writes
"What you are wrong about is deficit spending on recurring programs that create a dependency among the people. You should only deficit spend on one time improvements such as road building, bridge building, running broadband lines, and buying information technology systems.

You don't borrow for recurring expenditures."


I mostly agree, but I think you're incorrectly attributing to Klein a position he didn't explicitly take. Where I agree with you totally is in the general rule that borrowing should be limited to fund projects with long-term payback - i.e. capital improvements like infrastructure. War also falls into that category. You're correct to argue that it is bad fiscal policy to consistently run deficits for ongoing programs, for instance, maintenance of infrastructure, programs like social security or medicare, etc. However, and perhaps this is where you're critical of Klein's position, it is sometimes necessary to run short-term deficits for ongoing expenses, like in recessions. Specifically, in the current economy of high unemployment, we're seeing higher expenses for unemployment benefits & other social programs, while revenue in payroll and income taxes is down. Cutting benefits to balance the budget would actually make the problem worse, by lowering the cash flowing through the economy. So now is one of those times when we have to do the distasteful thing & borrow to make up for budget shortfalls, even for ongoing expenses. Yes, its generally bad practice, but it has to be done now, because not doing it is worse.

Posted by: bsimon1 | June 11, 2010 10:03 AM | Report abuse

Voters are never going to approve of severe austerity measures, and the government is never going to allow a default on debt, so that leaves inflation (or "printing money") as the only way forward -- the good news is that "printing money" does not require a public referendum or mandate -- more about how inflation can be used to reduce national debt and rout entitlements at:

http://wjmc.blogspot.com/2010/05/using-inflation-to-reduce-public-debt.html

Thank you for the opportunity to comment...

Posted by: mckibbinusa | June 11, 2010 10:07 AM | Report abuse

"Ezra, the key here is 'commitments' about future when solid, iron clad cost cutting measures will be undertaken."

Every single Democratic President has decreased the debt relative to GDP. Most recently, Clinton eliminated the deficit and ran a surplus to pay down the debt. Fiscal responsibility is what Democratic Presidents do, in a Democratic or a Republican Congress.

Republicans, on the other hand, are profligate fiscally. They run spectacular deficits and run up debt. They have ALL done this since Reagan, whether Congress was led by Democrats or Republicans.

If you want a firm commitment to fiscal responsibility, all you need is a Democratic President.

Posted by: theorajones1 | June 11, 2010 10:11 AM | Report abuse

@lancediverson: " You should only deficit spend on one time improvements such as road building, bridge building, running broadband lines, and buying information technology systems."

So true. It always interested me when the Keynesian argument is advanced in such a way that it suggests that any deficit spending, on anything, if sufficiently large, will get us out of a recession and grow the economy. That really doesn't make much sense.

Spending that provides new infrastructure and infrastructure improvements provides the immediate boost of spending, and then the extra boost of infrastructure that can then be used to conduct business (or attract tourists, or what have you).

Then "stimulus" funds go to pay off existing debts and provide unemployment benefits or tax-credits or discounts, there's nothing else happening beyond the immediate economic stimulus. A lot of economic growth happens both via the establishment of infrastructure, and after that infrastructure is established. Steam locomotives, and the tracks to run them on, led to a business boom. The economy grew steadily during and after the establishment of the Eisenhower interstate system.

The establishment of the National Parks, and the picnic grounds, roads, and lodges (many of them funded through the WPA) led to tourism and related businesses. And so on.

Just throwing money into the economy, mostly to appease donors and special interest groups, is unlikely to have much of a net positive effect.

Posted by: Kevin_Willis | June 11, 2010 10:13 AM | Report abuse

Ezra is fairly comical, if not hypocritical, in his appeal for "discipline during boom times".

Remember when Republicans even dared to suggest trimming some large scheduled spending increases back in the '90's, you know, when "times were good"? They were labeled "Draconian" cuts, and Democrats along with their lap-dog media told the world that the GOP wanted to starve children and make old people eat cat food. Keep in mind the Republican proposals would have still been INCREASING spending, just at slower rates of increase!

So Ezra, in typical blind-eye-to-reality form, "walks right past and doesn't stop to look" at the fact that in good times, any suggestions of spending discipline are attacked by the left as "drastic", and they will claim during good times that why can't a nation as rich as ours take care of every little need someone has, and increase spending to the sky?

Hence, spending continues to spiral upwards, because Keynsians think you have to spend trillion during recession to make people feel better, and leftists think you need to spend trillions more during good times because "the wealth should be spread around. That's why it's exactly during RECESSIONARY times that you take the hard steps to enact spending discipline, because it's easier for folks to understand the need for spending discipline and potential harm if you don't.

Posted by: dbw1 | June 11, 2010 10:14 AM | Report abuse

"the Keynesian argument is advanced in such a way that it suggests that any deficit spending, on anything, if sufficiently large, will get us out of a recession and grow the economy. That really doesn't make much sense."

Then you really don't understand recessions. Yes, it's better to have people doing productive work during a recession. But really, in a recession paying them money to dig holes and fill them up again is better than not paying them at all. That's because a recession like the one we're temporarily destroys demand, which destroys businesses which we actually need, which destroys demand again, and so on down the spiral. You have to break that spiral. It's better to break it by building a bridge, but really, you just have to break it.

Posted by: theorajones1 | June 11, 2010 10:16 AM | Report abuse

theorajones1:
"If you want a firm commitment to fiscal responsibility, all you need is a Democratic President."

That's one of the funniest lines I've read in some time.

Some may have a different perspective. Take the same time periods, and look at who was running Congress. Deficits exploded when Democrats were controlling the purse strings.

Perhaps you want to brush up on Civics 101, and learn who originates and approves spending bills (loaded with pet projects that do nothing for the betterment of the country).

Posted by: dbw1 | June 11, 2010 10:20 AM | Report abuse

"Take the same time periods, and look at who was running Congress. Deficits exploded when Democrats were controlling the purse strings."

Um, no. Since the 1930's Republicans have controlled Congress for something like 8 or 10 years. A big chunk of that was under Clinton, and we got rid of the deficit. Another chunk of that was under Bush, and we saw massive deficit spending and unprecedented structural deficits.

It's actually pretty simple. Republicans love to whine and wail about taxes and spending, but it's Democrats who are actually fiscally responsible.

Posted by: theorajones1 | June 11, 2010 10:24 AM | Report abuse

theorajones1:
"Then you really don't understand recessions...paying them money to dig holes and fill them up again is better than not paying them at all."

Let me ask this question: when you say "paying them money", where is that money coming from?

When you figure out they are being paid with money that doesn't exist, maybe you will gain a better understanding of the long-term downsides of employing Keynsian policies during recessions.

Down the road it becomes more expensive when you have to pay back all this borrowed money, than if you just let the economy go through it's contraction and start growing again...without burdening the our children's economy with even more debt on which we have to pay even more interest....i.e., even more cash flowing out of our country and going elsewhere.

Posted by: dbw1 | June 11, 2010 10:27 AM | Report abuse

"they're being paid with money that doesn't exist"

Sorry, borrowed money doesn't exist? This will come as a huge surprise to the person I bought my house from.

"Down the road it becomes more expensive when you have to pay back all this borrowed money, than if you just let the economy go through it's contraction and start growing again"

I've met a lot of people who lived through the Great Depression who would beg to differ with you on what makes things worse "down the road." These "contractions" (a nice euphemism for 10% unemployment) don't necessarily sort themselves out prettily. If left alone, recessions can, in fact, spiral into depressions, taking down many good aspects of our economy with the bad. I know this contradicts what Ayn Rand says, but she's wrong about a lot of things.

And a Depression can be profoundly damaging to a nation, not only economically, but also politically. You get into sustained unemployment rates like 15, 20, 25%, there are a lot of angry and frustrated people who are willing to join up with all kinds of extremists.

And frankly, a 10 year t-bill is earning something like 3.5%. We don't need a particularly high level of economic growth to beat that. It's kind of a layup.

Posted by: theorajones1 | June 11, 2010 10:42 AM | Report abuse

bsimon1: He's corrected it, so the dissonance I was sensing was valid. That's obviously what he meant, but using the wrong word in that case totally undermined the argument.

Posted by: akusu | June 11, 2010 10:42 AM | Report abuse

theorajones1:
"Um, no. Since the 1930's Republicans have controlled Congress for something like 8 or 10 years. A big chunk of that was under Clinton, and we got rid of the deficit. Another chunk of that was under Bush, and we saw massive deficit spending and unprecedented structural deficits."

I love it when I get to teach a leftist that a lot of the skewed history they were taught in college is just not factual.

To start with, Republicans have controlled Congress for about 18-20 years since the early 30's, but who's counting. I don't care who controls Congress, if they implement conservative principles. That's why I liked the GOP majority of the 90's, and didn't like the majority of the 2000's.

With that said, pull out a chart of deficits by year, and overlay with a chart of who controlled Congress. You won't have to go far....just in the 2-3 years Democrats have now run Congress since 2006, what they have done to explode the deficits makes even the bad run the GOP had through 2006 pale in comparison.

One other thing. You do understand that there are two sides to the deficit equation, right? Spending, and Revenue. Next time you hear that Bush's tax cuts (or Reagans) are what caused the deficits of the 1980's or 2000's, do me a favor....lay the revenues by year alongside the spending by year. Then tell me what really caused the deficits.

Posted by: dbw1 | June 11, 2010 10:48 AM | Report abuse

I don't buy the argument that just having a Dem President is an answer to control deficit. That does not make sense.

Barack Obama needs to demonstrate his yet absent fiscal discipline. He needs to prove that. He being Democrat is irrelevant.

We do not want to do useless political argumentativeness for the sake of it.

If Democrats are so disciplined, I doubt my State California would have had $20B deficit year after year. So don't give us this 'sh*t' of being Democrat. I am a registered Democrat too.

Posted by: umesh409 | June 11, 2010 10:51 AM | Report abuse

theorajones1:
" If left alone, recessions can, in fact, spiral into depressions..."

Ever do a timeline study of government actions and the economic conditions during the 1930's and 1940's? It was capitalism and the GOP that caused the Depression, right? And Keynsian deficit spending + good ol' FDR with all his protectionistic policies came along and righted the ship, right? I mean, that's what you were told in college, right?

Again, do your homework....look at the timeline of the DOW, the unemployment rate, GDP, etc, etc. The more meddling FDR did, the worse it got. The more borrowed money was spent on pet projects, the worse it got. My favorite was the geographic map I saw one time of where most of the deficit spending (today we would call it 'stimulus") occurred throughout the 1930's.

Surprise, surprise, the massive spending skewed toward politically favored areas of high-powered politicians (read: Democrats), and little ever reached the areas that were suffering the worst effects of the depression. I can mildy defend real Keynsians, because at least they would say that deficit spending has to go to where the worst unemployment/economic conditions are. But a realist (and history) knows that this never turns out to be the case. And we are seeing it once again, which is why the massive stimulus bill from last year has done nothing to budge unemployment.

Posted by: dbw1 | June 11, 2010 11:00 AM | Report abuse

If Democrats are so disciplined, I doubt my State California would have had $20B deficit year after year. So don't give us this 'sh*t' of being Democrat. I am a registered Democrat too.

CA's problem starts and ends with the dysfunctional government by referendum and the super majority needed to pass any budget legislation. Get rid of prop 13, so that property tax actually reflects the value of property and not some outdated formula and a lot of CA's problem goes away. It is intellectually dishonest to blame he dems in CA when it is the minority republicans that continue to thwart any solution that raises revenues from being considered.

Posted by: srw3 | June 11, 2010 11:58 AM | Report abuse

@dbw1: The more meddling FDR did, the worse it got.

False, things got worse in 37 when FDR listened to the deficit hawks and removed stimulus and raised taxes.

"in early 1937 almost no new programs were initiated because of the opposition of the new Conservative Coalition." --wikipedia

" And we are seeing it once again, which is why the massive stimulus bill from last year has done nothing to budge unemployment."

This is completely false. The stimulus was too small by 30-50% but the consensus view of both conservative and liberal economists (as opposed to republican partisans) agree that the stimulus kept unemployment from getting much worse.

"Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative." NYT

What would unemployment and economic growth look like minus about 2 million jobs?

And remember the stimulus was 1/3 tax cuts, which helped people make ends meet but don't create new jobs (although more spending means more jobs for those who make and sell the things bought.)

The stimulus was also about 1/3 direct aid to states, which saved many jobs for teachers, police and firemen, and other employees, which kept unemployment from going higher.

Posted by: srw3 | June 11, 2010 12:18 PM | Report abuse

It amuses me when Brooks or any Republican writes in somber tones about "psychological effects." And appalls me when journalists take them at their word. They've turned the most powerful noise machine in history up to full volume,screaming non stop about the coming Armageddon, the march of socialism/communism, the horrible effects of the deficit on our sacred way of life, etc. And now they're shocked and surprised that people are jittery? What a despicable farce.

Posted by: maximumken | June 11, 2010 12:36 PM | Report abuse

bsimon1 writes:

"it is sometimes necessary to run short-term deficits for ongoing expenses, like in recessions. Specifically, in the current economy of high unemployment, we're seeing higher expenses for unemployment benefits & other social programs, while revenue in payroll and income taxes is down. Cutting benefits to balance the budget would actually make the problem worse, by lowering the cash flowing through the economy. So now is one of those times when we have to do the distasteful thing & borrow to make up for budget shortfalls, even for ongoing expenses. Yes, its generally bad practice, but it has to be done now, because not doing it is worse."

You are just not right that it is good to borrow for the above type of expenses in a recession or at any time. Kevin_Willis is right and you are not.

Appropriate budgeting would be that the government would have a reserve fund for the temporary increases in unemployement benefits and social services expenditures that come with an economic recession. The government should not borrow for those types of expenditures. The only appropriate borrowing is for the medium to long-term infrastructure on which you build an future economy. Social services do not qualify to be in that catagory.

Posted by: lancediverson | June 11, 2010 2:02 PM | Report abuse

Denmark and Ireland in the 1980s are poor choices in Brooks example. While they both involved large deficit reductions through decreasing spending, both of these countries also went through large monetary expansions to soften the negative impact of these policies, reducing interest rates. Today in the United States and in Europe we can't follow the same expansionary monetary policy because interest rates already close to 0!

Posted by: wstompy | June 11, 2010 7:04 PM | Report abuse

REP BACHMANN: OBAMA WORST PRESIDENT in UNITED STATES HISTORY
WEUS 810 AM
June 11, 2010
SHAPIRO: Is President Obama better or worse than Jimmy Carter? BACHMANN: Worse. Easily worse. SHAPIRO: I agree. So far, you’d have to say he’s the worst president in United States history … BACHMANN: No question. No question. Hear other highlights of the interview at Big Government. Follow the link below.
http://www.youtube.com/watch?v=xB-DU8VhdZk&feature=player_embedded

Posted by: PaulRevere4 | June 11, 2010 7:08 PM | Report abuse

REP BACHMANN: OBAMA WORST PRESIDENT in UNITED STATES HISTORY
WEUS 810 AM
June 11, 2010
SHAPIRO: Is President Obama better or worse than Jimmy Carter? BACHMANN: Worse. Easily worse. SHAPIRO: I agree. So far, you’d have to say he’s the worst president in United States history … BACHMANN: No question. No question. Hear other highlights of the interview at Big Government. Follow the link below.
http://www.youtube.com/watch?v=xB-DU8VhdZk&feature=player_embedded

Better stay on our guard as well, as the Elite Globalists have some more puppets planted in the Democrat and Republican parties to align us toward "One World Government", against our wishes and the Constitution of the United States"!

Posted by: PaulRevere4 | June 11, 2010 7:11 PM | Report abuse

"Or take health-care reform. That bill, as written, is one of the biggest steps toward deficit reduction we've seen in recent years."
-------------------------------------------
This is proving not to be true. Is this a White House press release?

Posted by: bethg1841 | June 14, 2010 9:14 AM | Report abuse

"Or take health-care reform. That bill, as written, is one of the biggest steps toward deficit reduction we've seen in recent years."
-------------------------------------------
This is proving not to be true. Is this a White House press release?

Posted by: bethg1841 | June 14, 2010 9:19 AM | Report abuse

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