Jobs now, deficits later

JOBS NOW, DEFICITS LATER…. Lawrence Mishel and David Walker disagree on quite a bit. Mishel is president of the Economic Policy Institute, a progressive organization that, when it comes to the economy, generally supports robust public investment. Walker, the former head of the Government Accountability Office, is president and CEO of the Peter G. Peterson Foundation, a far more conservative institution that focuses on deficit reduction and cutting the federal budget.

I wouldn’t characterize these two as enemies, necessarily, but when it comes to economic policies and the role of government intervention, they don’t often see eye to eye.

With that context in mind, I was very pleased to see Mishel and Walker co-write a piece this week with a message policymakers should take to heart: “Address jobs now and deficits later.”

President Barack Obama is in a difficult position when it comes to deficits. Today’s high deficits will have to go even higher to help address unemployment. At the same time, many Americans are increasingly concerned about escalating deficits and debt. What’s a president to do?

The answer, from a policy perspective, is not that hard: A focus on jobs now is consistent with addressing our deficit problems ahead.

The difficulty is that many politicians and news organizations often cast deficit debates as a dichotomy: You either care about them or you don’t.

But this is rarely accurate. The fact that the two of us, who have philosophical differences on the proper role of government, find much to agree on about deficits is a testament to the importance of dropping this useless dichotomy and finally talking about deficits in a reasonable way.

Their piece is well worth reading, and it’s a shame it got lost in the shuffle this week. In a sane political world, it would be the basis for broad consensus. It’s based on common sense: short-term deficits to improve the economy are more than tolerable; they’re necessary. The stimulus has pulled the economy back from the brink, but “there is an economic and a moral imperative” to take additional action that prioritizes job creation.

Once the economy is stronger, Mishel and Walker argues, “structural deficits” will require considerable attention, and the budget gaps are “too substantial” to address without “both sides of the ledger: spending and revenues.”

“Revenues,” of course, means that taxes are going to have to go up eventually, which is anathema to modern Republican thinking — taxes can’t go up, on anyone, ever.

But for serious observers who want to circumvent the lazy and the hacks, Mishel and Walker offer a sensible vision. Policymakers probably won’t care — our process is badly broken; Republicans won’t allow votes on worthwhile ideas; Dems are too afraid on ambitious action; and voters have somehow been convinced that what works does not work — but I’m glad to see the piece anyway.