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21 Nov 2008 02:37 pm
Learning To Love The Trillion Dollar Deficit
Matt Miller, a former "deficit fetishist," claims that the current economic situation demands a large deficit:
The key (and here you'll see I haven't really changed my stripes) is to enact a long-term framework for fiscal sanity even as we test the limits of how much debt the Treasury can peddle.
Bob Litan of the Brookings Institution suggests building such triggers
into Obama's blueprint from the start. Once unemployment gets back
beneath 6%, for example, we could require a supermajority vote in
Congress to run deficits higher than, say, 2% or 3% of GDP (by
comparison, the trillion dollar figure will push us toward 7%, an
all-time high).
Yes, promises like this can be broken. But given the extraordinary
circumstances, writing this kind of future restraint into law would
tell world markets that we know the debt spree has to end. Obama could
also set up a bipartisan commission on Social Security and Medicare
with a view to building consensus for action in a second term, by which
time the current crisis will, with luck, be a fading memory.
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