Morning Must-Read: Jonathan Chait on How the Deficit Scolds Holding Short-Term Prosperity Hostage to Long-Term Agreement Are Harming America
Jonathan Chait: Deficit Scolds Holding the Unemployed Hostage: “The main reason for the stalemate is the combination of strategic obstruction and ideological radicalism that dominates Congressional Republican thinking. But a second and nontrivial reason is that the deficit scolds have given the Republicans cover at every turn.
The deficit scolds are a loose amalgamation of business executives, activists, and pundits, often centered around Pete Peterson and his network of activist groups, allied around the goal of bringing both parties together to agree on a plan to reduce the long-term budget deficit…. I don’t find their policy goals terrible…. The long-term deficit, while hard to predict… is probably too high. A bipartisan agreement along the lines suggested by the deficit scolds might be a positive thing….
But their influence has been an unremitting disaster for America….
The first [way] has been to focus public, and especially elite, attention on the long-term deficit…. Future economic historians will… wonder why American elites reacted to the crisis of mass unemployment… by instead identifying as their highest priority a problem of no special urgency….
The second [way] has been to prevent political accountability for the stalemate over the deficit…. The deficit scolds have strategically obscured… political reality… in order to maintain their bipartisan credibility and position themselves to maintain influence within both parties. But this has brought them no closer to a deal, and has served only to reward the GOP’s opposition…. Short-term stimulus of any kind, however humane or economically helpful, is acceptable only if the two parties can agree on offsetting deficit cuts. And since such agreement is nearly impossible, continued suffering is necessary…. The deficit scolds would prefer… suffering over even tiny, temporary increases in the deficit. That the deficit is dwindling rapidly does not make the deficit scolds any more willing to entertain short-term deficit increases for any reason…. The deficit scolds have proven to be completely impotent to bring about the changes they say they want, but surprisingly powerful allies in support of gridlock.