Obama argues a balanced budget isn't necessary. Can he convince the public?
Republicans propose to balance the budget within 10 years, while Democrats argue that such a move could actually hurt the economy. History suggests the politics may be on Republicans' side.
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Indeed, an NBC News/Wall Street Journal poll from December found that 58 percent of Americans agreed that the deficit "needs to be solved now," compared with 37 percent who said it is something the United States needs "to continue to address" and just 4 percent who said it could be "addressed in the future." Likewise, polls in recent years asking about the prospect of a balanced-budget amendment have found support among roughly three-quarters of Americans.Skip to next paragraph
Liz Marlantes covers politics for the Monitor and is a regular contributor to the Monitor's political blog, DC Decoder.
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One interesting question is what, exactly, is driving this fervor for balancing the budget, given that there's little evidence the deficit is currently affecting average Americans' lives in any sort of measurable way. Typically, the biggest economic downside to running high deficits is the impact on interest rates. But interest rates in the US are historically low, and while they may rise in the future, data suggest that's not necessarily going to be the case.
Instead, it seems that the public's horror of deficits is mostly a product of political rhetoric – rhetoric that Americans have been listening to for decades, from both Republicans and Democrats. During the Reagan years, it was Democrats who railed against spiraling deficits. During the 1990s, then-House Speaker Newt Gingrich made it a rallying cry for Republicans, pushing President Clinton to make balanced budgets one of his signature achievements. During President George W. Bush's tenure, Democrats – as well as some conservatives – renewed their focus on the debt and deficits.
In short, politicians on both sides of the aisle have spent years convincing voters that balancing the budget is both the moral and fiscally wise thing to do. There have been repeated warnings about borrowing on the backs of our grandchildren and calls to "live within our means," as well as misleading comparisons between the federal budget and household budgets – despite the fact that government borrowing can actually be an essential tool for a healthy economy.
As The New York Times's Annie Lowrey wrote Tuesday: "As sensible as a balanced budget might sound – much like a balanced checkbook for a family – countries are generally able to run modest deficits for years on end while still keeping debt stable as a share of economic output. One year’s deficit is effectively paid off by later economic growth, especially if a government is investing in public goods like roads and schools."
Obama may have plenty of economic data points to back up his argument that a balanced budget, for its own sake, isn't necessarily desirable right now. But whether he can convince the public of this – after years of politicians arguing the reverse – remains to be seen.