Friday, June 04, 2004

Fun With Robert Samuelson

1/4/93

The Budget Deficits. Although they don't immediately threaten the economy, their persistence poses long-term dangers. As the government goes deeper into debt, rising interest payments on its borrowings crowd out other government spending. Since 1959, the interest burden has risen from 6 to 14 percent of all federal outlays. Likewise, huge deficits may ultimately depress private investment by raising interest rates and discouraging businesses from borrowing. Lower private investment rates would in turn gradually undermine the prospects for higher living standards.

2/14/94

In my view, it would also be good economics. Bigger government is more likely to burden the private economy. Whatever deficits' economic dangers, they are mostly long term. These include the possibility that government might inflate its way out of debt or that high federal borrowing might depress private investment. The antidote for both is an end to permanent deficits. This need not require self-defeating behavior: trying to cut spending or raise taxes in recessions. Even in the 19th century, government often tolerated deficits (or reduced surpluses) during slumps.

What permanent deficits do is to pay for present spending with future tax increases or spending cuts. We are handcuffing tomorrow's governments with today's debt. The alternative to a constitutional amendment is for the president to lead public opinion toward a new discipline. if Clinton doesn't propose to balance the budget, the obvious question is: why? And the next question is: who, then, will balance the budget? The answer is Chelsea, her friends and our children. It's the wrong answer.



More generally, throughout the 90s Samuelson was completely obsessed with the deficit. Column after column was written about the importance of reducing it (often he didn't bother to even explain why), chastizing the Clinton administration for not being willing to propose budgets which would do it, etc...

It's clear Samuelson only thinks deficits are important when they can be used as an excuse to make Grandma Millie homeless or to criticize presidents when they're Democrats.