If you saw any of the Republican
convention last week, or its garland of talk shows, you may be
aware that President Barack Obama has run up deficits averaging
about $1 trillion a year over his four years in office.

In case your math is weak, that’s $4 trillion added to the
national debt — a lot of money. But what would have happened if
we hadn’t borrowed and spent that money?

Much of this $4 trillion was not borrowed for the usual
purpose of spending in the reckless way Republicans suppose that
Democrats borrow and spend money — that is, for the purpose of
shoveling out cash to poor people on the condition that they
quit their jobs and go on welfare, and so on. Nor was this money
spent for reasons Republicans might approve, such as subsidizing
small businesses or building useless airplanes.

It was not borrowing in order to spend. It was spending in
order to borrow, under the conventional Keynesian view that
government deficits occasionally have to be used to stimulate
demand in a recessionary economy. Even that part of the $4
trillion that wasn’t explicitly labeled “stimulus” was part of
the calculation of how big the explicit stimulus should be. But
in order for this trick to work, it must increase the size of
the deficit. Cutting spending to pay for a tax cut, or raising
taxes to pay for a spending spree, neutralizes the stimulus.

Stimulus Debate

Now, you can criticize this policy from many perspectives.
You can say, with liberal economists like Paul Krugman, that the
stimulus wasn’t big enough. The economy is still wobbly at best.
We should have spent double or triple what we did. You can say
(as I do) that the stimulus will lead to disastrous inflation
unless we offer a more convincing plan about how we’re going to
pay it all back in the long run. You can say, as the Republicans
do, that we should have cut taxes more and increased spending
less. You can get a similar bounce either way.

But you can’t say with any hope of being taken seriously
that the stimulus of $4 trillion of deficit spending destroyed

This doesn’t mean that the deficits were necessarily a good
idea. We have lots of goals for our economy, of which more jobs
is only one. We want low inflation. We want capital formation.
We want long-term growth. We want clean air and water. We would
like our Social Security checks, please. We wouldn’t like to
overburden our children with debt.

Deficit spending is bad for most of these other goals. All
things considered, it’s not clear that this strategy was the
right idea.

The Republicans, however, are not considering all things.
They have decided to concentrate on one economic statistic:
jobs. In his nomination acceptance speech, Mitt Romney made a
joke of it, ridiculing Obama’s professed concerns about the
environment and global warming. None of that pansy stuff for
Romney. He promised to focus on “jobs. Lots of jobs.” And jobs
in the very short run: People now await the release of the
monthly unemployment number like news of the path of a

So pop quiz: Would there be more U.S. jobs or fewer today
if the government had run a balanced budget, or even just a
smaller deficit, for the past four years? All else being equal,
it is obvious beyond dispute that there would have been fewer
jobs, not more.

As I say, this is far from the whole story. But it’s the
only part Republicans are telling, and they’re getting it
exactly wrong.

The Republican Party’s enthusiasm for curbing the national
debt has waxed and waned, as has its alarm about what happens if
we don’t. These days conservatives are quoting again from Ronald Reagans first inaugural address: the famous passage about how
you and I have to pay our bills, so what makes us think the
government doesn’t? At that moment, the Republicans pretty much
had a lock on fiscal responsibility as an issue. In the public
mind, whatever their other faults, Republicans were prudent;
Democrats were spendthrift.

Record Deficits

Of course, Reagan famously ignored his own sermon and ran
up record peacetime deficits. Because it was axiomatic that
Reagan could do no wrong, deficits came back into Republican
fashion. New theories arose. Republicans started saying that if
you cut taxes first, spending would automatically follow. That
didn’t happen.

During the Clinton years, temporary agreement between the
parties, with help from the economy, actually did wipe out the
deficit briefly. Then came President George W. Bush and his war
in Iraq. Vice President Dick Cheney, concerned that alarm about
the return of huge deficits might spoil the fun, declared that
deficits don’t matter.” Republicans began dismissing concern
about the national debt as “Rubinomics,” a reference to Bill Clinton’s Treasury secretary, Robert Rubin. It was not intended
as a compliment.

Now, in the latest chapter, Republicans have decided that
deficits are heinous once again. No doubt they will continue to
believe that for as long as there is a Democrat in the White

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