Tuesday, August 10, 2010

Catch of the Day

Goes to Matt Yglesias, who skewers anti-debt rhetoric coming from Republicans, in this case Norm Coleman.  As Yglesias points out, standard political boilerplate like Coleman's -- "only Washington politicians and limousine liberal economists would think that going further into debt would help you get closer to getting out of debt" is totally out of sync with how normal American individuals and business actually handle their finances.  Alas, I suspect this is a losing fight -- debt may be as American as...well, let's just say that it's one of the things in which American practice and American cultural ideals are in radical conflict, and that's unlikely to change any time soon.  Anti-debt rhetoric is poll and focus-group tested, and we're stuck with it.  There are no aphorisms about how smart it is to borrow in the right circumstances.

On the other hand...perhaps it's not the worst thing in the world that there's a bit of a cultural bias against deficit spending, since the general biases of democratic government, one would think, would be in favor of short term gains over long term pain, which should yield larger-than-optimal deficits. 

Still, what I wonder about is whether the reporters covering politics (and I suppose even those covering the economy) understand or are even aware of (1) the importance of debt in the overall economy, and (2) basic Keynesian arguments for running large budget deficits during recessions.  Not agree with -- just understand, or at least are aware of.  Hey, I'm giving reporters some credit -- I think they do understand that by "deficit" we're talking about the federal budget.  I'm fairly certain large portions of the electorate don't know that much; for them, as famously seen in the Bush/Clinton/Perot debate, "deficit" basically means "bad economic things."  Which certainly would explain why deficits in the abstract are unpopular.

1 comment:

  1. I tried to Google your Bush/Clinton/Perot reference but couldn't find it (I'm 33, I was vaguely a fan of Perot at the time but didn't pay attention).


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