January 29, 2013

Joe Scarborough and Paul Krugman are having a very interesting argument that offers a useful peek into Beltway deficit mania. It’s a reminder that even as the deficit as a share of GDP has begun to come down, and even as President Obama is trying to refocus the conversation (to some degree) on a more progressive second term agenda, the Beltway Deficit Feedback Loop is alive and well.

To summarize, Krugman went on Morning Joe the other day and reiterated his view that the deficit is mostly a function of the bad economy, and that it isn’t the long term menace to American civilization that the deficit hysterics — who are really motivated by a desire to shrink government — would have you believe. Scarborough responded with this:

Paul Krugman vs. the world

Of course, Krugman isn’t really isolated in this view. Joe Weisenthal responded this morning to Scarborough with a list of 10 prominent economists and public officials who largely agree with Krugman that deficit hysteria is misguided and overblown. As Weisenthal puts it: “there are plenty of economists and economically-literate minds who think that, to varying degrees, the deficit is not what we should be worrying about.”

That’s true, but it’s worth reflecting on why Scarborough believes Krugman’s views are so marginal and isolated. It gets back to what I’ve called the “Beltway Deficit Feedback Loop.” The relentless bipartisan focus on the deficit convinces voters to be worried about it, which in turn leads lawmakers to spend still more time talking about it and less time talking about the economy, a phenomenon that is self-reinforcing. This is exacerbated by some commentators and news orgs, who continue to treat the deficit scolds with a great deal of deference, while marginalizing the opinion that we should prioritize boosting the economy and job creation as a means of getting the country’s fiscal problems under control over time without savage spending cuts that will hurt a lot of people. Back in 2011 one study actually confirmed that newspapers were spending far more time talking about the deficit than the economy — at a time when the recovery was in serious peril.

The Morning Joe crew’s reaction to Krugman perfectly captures this phenomenon. They treated him as a pariah. According to Scarborough, Mika Brzezinski compared Krugman’s “head in the sand” approach to that of climate deniers. You can almost picture Krugman sent on a lonely march through the Village square, head hanging in shame, with “DD” — Deficit Denier — printed on his back in big scarlet letters.

Of course, these folks only reacted to Krugman this way because they were apparently unaware of all the prominent voices who agree with him, thanks to the aforementioned Beltway Deficit Feedback Loop.

Yet the GOP position on the deficit — that it is such an urgent problem that we should dramatically downsize government right away to get it under control — is the one that should be seen as marginal, at odds with the consensus among many mainstream economists, and even out of touch with reality. Republicans are now claiming they will wipe out the deficit in 10 years with no new revenues, which would require extraordinarily deep and savage cuts to government. It’s a fundamentally unserious position. Indeed, this position is fundamentally unserious about deficit reduction. The very same Republicans telling us the deficit is an urgent problem that must be solved through spending cuts alone won’t even specify which spending cuts would achieve the levels of deficit reduction they themselves say we need. This deserves far more sneering disdain than Krugman’s argument does.

Greg Sargent writes The Plum Line blog, a reported opinion blog with a liberal slant -- what you might call “opinionated reporting” from the left.