Spend Now, Cut Later

Ezra Klein stating the obvious:

Last week, pressure from deficit hawks forced the House of Representatives to cut the size of their jobs bill in half. As David Leonhardt wrote, “the case against the jobs bill starts with the idea that the economy is recovering.” But as today’s employment numbers show, our fitful recovery is going much too slowly given our near-10 percent unemployment rate.

Yes, deficits can become a problem. But the problem facing America is long-term, not short-term, deficits. Which is why every wonk answers this question the same way: Expand short-term deficits to boost employment and commit to credible deficit reduction in the long-term. The right move for deficit hawks would be to release a proposal that pairs a generous jobs bill with serious long-term reforms (for instance, a bill providing $300 billion in immediate stimulus and also lowering the cap on the mortgage interest deduction, bringing back the full estate tax and cutting defense spending). This moment, viewed correctly, actually offers a substantial opportunity for long-term deficit reduction because the need for short-term deficit spending gives hawks a bargaining chip that will bring liberals to the table. But no one seems interested in offering that deal.