We should be worrying about the employment deficit. Instead, we are worried about the budget deficit. But I’m getting ahead of myself. Nate Silver has a very good post detailing how the Republicans in Congress have positioned themselves to the right of….everybody. But what struck me is that nowhere in the poll would one have even been given the option of responding that the budget deficit is not a serious problem (really, look it up. You can’t answer that).
I want to nip one common complaint in the bud: if our GDP-debt ratio soars, no one will buy our debt (T-bills). This is empirically silly. Japan currently has a GDP-debt ratio (~225% vs. ~90%) more than twice that of the U.S., and still has very low interest rates. Clearly, selling Japanese debt isn’t an issue. To put this in perspective, for the U.S. to reach that level, we would have to increase our debt by $15 trillion–the size of the entire U.S. economy. No one is talking about that. We wouldn’t even notice it if we increased the debt by a couple of trillion dollars. Actually, that’s not true, since the people who would have jobs due to deficit spending, the people who would earn more money selling things to those people with newfound jobs, and those whose salaries would increase due to better bargaining conditions for workers would experience a noticeable improvement in their lives. But the amounts we’re talking about pale in comparison to $15 trillion dollars.
I’ve laid out other reasons why I don’t worry about budget deficits per se* (as opposed to the policy and economic effects of budget reduction and deficits) elsewhere, but the implications of believing in budget deficit reduction über alles are vicious: millions, including children, are thrust into (or kept in) poverty, with all of the effects of poverty, such as educational failure.
And this deficit mania also affects science budgets: as long as the frame exists that we have to artificially constrain or cut research budgets due to deficit concerns (as opposed to whether we should be funding that research–which is legitimate), research funding will be in a perpetual defensive crouch.
That might matter to some ScienceBlogs readers.
It would be nice if we understood that newfangled technology known as fiat currency….
Related: We see that Peter Dorman has similar thoughts about the ridiculousness of worrying about budget deficits right now.
*I actually don’t worry very much about GDP-debt ratios until they reach the straining credulity level, which as I noted hasn’t happened yet in Japan and doesn’t seem likely in the foreseeable future.