Tuesday, August 12, 2003

How Many Nobel Prize Winning Economists...

...does it take to change an adminstration?

Solow and Akerlof bash the Bush administration.

In the end, the issue isn't the deficit per se but the structural deficit. In a recession it's fine to run a deficit, and some structural deficit, for financing "investment" type government spending (pure research, education, physical infrastructure, etc... ) is a good thing. But, if the structural deficit starts ballooning we've got problems.

My friend Max still seems fairly sanguine about the structural deficits, at least from what I can infer from his posts. I'm not so sure. As Howard Dean says, Republicans can't handle money. Throw the usual tax cutting fetish and unwillingness to cut spending on top of a perpetual war, and Houston, we may have a problem.