One of the initial causes of what Greg has called the “budget deficit feedback loop” is the notion held by some that deficits are just per se bad. Sure, there’s some rhetoric that goes along with it. People compare the federal budget to family budgets, even though that analogy isn’t even close to a good one, or they talk about the poor grandchildren who will supposedly have to “pay back” the national debt, even though that’s not how these things really work. I’ve tried calling those who believe that deficits are per se bad “deficit idealists,” comparing them to “deficit realists” who believe that the federal budget deficit is a tool toward other goals, not an end in itself.
A good window into deficit realism, in my view, is Matt Yglesias’s short item responding to a joke about reducing the deficit by selling bin Laden (burial? death? tapes on pay-per-view). Yglesias makes the point, correct or not, that diverting people’s money to the federal treasury in exchange for something that would have zero marginal cost to the feds would, in fact, take that money away from more productive uses. The point, of course, is that lowering the deficit isn’t an end goal; it’s a good idea if and only if doing so achieves other important purposes such as maintaining a proper inflation level, achieving full employment or other tangible goals.
Note too that, outside of their rhetoric, this is how movement conservatives actually treat the deficit. They believe that lowering taxes, especially on the wealthy, is important, so they try to do that when they have the chance; they also believe that maintaining spending on many government programs (including, but not limited to, national security) is important, so they try to do that too when they have the chance. Completely baffling to me, however, is why actual deficit idealists (and I do think they really exist; they’re not just a right-wing plot to eliminate Social Security, as many liberals believe) don’t get that movement conservatives are not their friends.