Somewhere over the political rainbow there's a right-sized deficit

To be a deficit hawk right now doesn’t mean fighting to get the US deficit to zero. It means making sure any deficit spending is worth the cost.

By , Guest blogger

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    President Obama, flanked by the co-chairmen of the National Commission on Fiscal Responsibility and Reform (former White House Chief of Staff Erskine Bowles, left, and former Wyoming Sen. Alan Simpson), stresses the importance of finding a bipartisan consensus on ways to trim America's debt. Even deficit hawks realize some deficit spending may be needed right now.
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If you hear me on NPR and NPR.org this week, you may think I sound schizophrenic. On a story about private donations to pay down the national debt, I remarked that such acts are honorable but futile, and even if we theoretically could pay off the debt completely today, it would not be wise economically nor fair intergenerationally. On Morning Edition this morning, you may have heard me say that the economy is now recovering, and it’s time we come up with “a plan to pay our bills.”

I am not confused nor being hypocritical. Note that I called for “a plan” to pay our bills (reduce the deficit), not the actual paying of the bills now. That’s because while continued deficit spending may be justified for the recovering-but-still-weak economy, that doesn’t mean that any deficit spending at any level is justified. And honestly, without some recognition of budget constraints, experience tells us that we just aren’t good at prioritizing and putting scarce resources to their most valuable uses.

To be a “deficit hawk” right now doesn’t mean fighting to get the deficit down to zero (let alone the debt down to zero). It means fighting to make sure that any deficit spending is worth its cost. The BP disaster should be another reminder that we have better ways that we have to or would choose to spend public money, so we cannot afford to not prioritize and behave as if there are no constraints.

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There is a “just right” level of deficit spending and a “just right” mix of things for which we’re willing to deficit spend, and right now I believe it’s somewhere between zero and (not necessarily the level we’re at but) the unsustainable path we appear to be on.

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