MAYBE ACTUAL DEFICIT HAWKS WILL BE MORE PERSUASIVE…. When left-leaning economists like Paul Krugman urge policymakers to ignore deficit concerns and pass additional stimulus to boost the economy, too much of the establishment fails to take his advice seriously. Despite the fact that Krugman and those who share his beliefs tend to be correct, their recommendations are deemed “predictable,” and therefore easier to disregard.
I’ve been trying to think, then, of whose guidance the establishment might take more seriously. Mark Zandi, the chief economist with Moody’s Economy.com and a former adviser to John McCain, takes a similar line to that of Krugman, but he’s not persuading folks, either.
Maybe it’ll help if ostensible deficit hawks hear from actual deficit hawks?
Matt Miller labels himself “a deficit hawk to the core,” but he agrees that prioritizing deficit reduction over economic growth at this point is a mistake.
[I]t is the height of economic folly — and socially dangerous, in my view — to elevate deficit reduction as a goal today over boosting jobs and growth. Especially when there are ways to goose the economy while at the same time legislating changes that move us toward fiscal sanity once we’re past this stagnation.
Or how about the Concord Coalition, which exists to push deficit reduction and fiscal responsibility. Diane Lim Rogers, an economist with the organization, seems to think it’s misguided for Congress to reject extended unemployment benefits over deficit concerns.
Hey, let’s get real: extended unemployment benefits are an effective form of stimulus spending, and although they do add to the short-term deficit, they are not part of the longer-term deficit problem…. Let’s face it: those who use their “worry” about our longer-term fiscal outlook as a reason to oppose extended unemployment benefits don’t want to reduce the deficit as much as they want to get rid of unemployment benefits.
Concord Coalition president Robert Bixby added, “As a deficit hawk, I wouldn’t worry about extending unemployment benefits. It is not going to add to the long-term structural deficit, and it does address a serious need.”
Doug Elmendorf, director of the Congressional Budget Office, is constantly expressing concerns about the nation’s fiscal future, but he recently conceded that prioritizing deficit reduction “would probably slow the economic recovery.” He added that he sees “no intrinsic contradiction between providing additional fiscal stimulus today, while the unemployment rate is high and many factories and offices are underused, and imposing fiscal restraint several years from now, when output and employment will probably be close to their potential.”
If genuine deficit hawks don’t have a problem with short-term deficit spending to improve the economy, faux deficit hawks in Congress really don’t have much of an excuse.
Of course, the exercise itself is largely pointless — lawmakers who claim to prioritize the deficit over the economy aren’t really serious anyway, but the judgment of those they should find credible just helps drive the point home.