Just to piss Krugman off, James Kwak laments that the deficit has taken a backseat to discussions about unemployment:
For over a year now, the refrain of the left-leaning intellectual class has been that the only thing that matters is increasing growth and reducing unemployment, and any discussion of deficits and the national debt plays into the hands of the Republicans. It may be true that jobs should be the top priority right now, but the fact remains that many Americans think that deficits matter (and most of those left-leaning intellectuals would concede that they matter in the long term). Those Americans are currently getting a menu of proposals with Simpson-Bowles on the right, Paul Ryan and Mitt Romney on the far right, and Fox News on the extreme right. There is no explanation of how to deal with our long-term debt problem in a way that preserves government services and social insurance programs and protects the poor and the middle class.
Dean Baker argues the opposite. Referring to an NPR interview with David Wessel, he says:
The piece included Wessel's unchallenged assertion that the deficit probably cannot be closed without cutting spending and raising taxes across the board. It would have been helpful to note that the deficit is projected to get to a level that is almost consistent with a stable debt to GDP ratio if the economy were simply to get back to full employment. If health care costs were contained by reducing protectionism in the sector and a tax was imposed on financial speculation, the deficit would be at a sustainable level.
I'm with Kwak, which is surely not a surprise. The best aspect of the latest Obama ad is his justification of an increase in taxes on the wealthy as simply part of a collective, shared effort to cut the deficit and debt. I definitely understand the perils of deficit-hawkery in a demand-driven recession – but Obama's chief failing in his first term, in my view, is his failure to describe his own long-term debt reduction plans, allowing the GOP to trumpet their far less practicable and far more radical proposals. The biggest fail? The fumbling of Bowles-Simpson. That's about long-term debt reduction. And until Obama shows how he intends to cut entitlement spending beyond untested and unproven pilot programs in the ACA, he deserves little credit for political courage.
He could still, of course, endorse Bowles-Simpson as a model for the future, call Romney's bluff on taxes and reposition himself more to the center. But he won't. For this Obamacon, it is easily the greatest disappointment of his first term.
The Dish 