Deficits don’t matter (right now)

DEFICITS DON’T MATTER (RIGHT NOW)…. Following up on Hilzoy’s overnight comments on President Obama’s prime-time press conference, what jumped out at me had less to do with the president’s responses and more to do with the questions themselves.

For example, I had assumed that the Treasury Department’s plan on the banking industry and toxic assets (“legacy” assets, whatever) would be a major topic of conversation. Its success or failure will have a significant impact on the economy, and one assumes, the president came prepared to discuss the plan in some detail. I was actually anxious to hear what he had to say.

But no one asked. We heard questions about stem-cell research and Fox News’ concerns about a “global currency,” but the bank rescue plan was ignored completely. Indeed, after a week of obsessing over Tim Geithner, there was only one passing reference to the Treasury Secretary from reporters last night. How odd.

So, what did the reporters want to talk about? Deficits and debt. From the transcript:

* “[U]nder your budget, the debt will increase $7 trillion over the next 10 years. The Congressional Budget Office says $9.3 trillion…. Isn’t that kind of debt exactly what you were talking about when you said ‘passing on our problems to the next generation’?”

* “[E]ven under your budget, as you said, over the next four or five years, you’re going to cut the deficit in half, then, after that, six years in a row, it goes up, up, up.”

* “You keep saying that you’ve inherited a big fiscal mess. Do you worry, though, that your daughters, not to mention the next president, will be inheriting an even bigger fiscal mess if the spending goes out of control?”

All of these questions came from different reporters, suggesting that the White House press corps has more or less internalized Republican talking points (again). In the midst of a dangerous global recession, journalists are desperate to know when this administration will start moving towards a more balanced budget — which is exactly what congressional Republicans are focusing on (and, come to think of it, what congressional Republicans focused on in the 1930s, too).

Note to the White House press corps: under these circumstances, deficits aren’t our most pressing problem. This preoccupation with the issue isn’t helping anyone.