Debt and Deficits
The Urgency of Growth
EJ Dionne recoils against the sequester.
Gradually, establishment thinking is moving toward a new consensus that puts growth first and looks for deficit reduction over time. In the last few months, middle-of-the-road and moderately conservative voices have warned that if we cut the deficit too quickly, too soon, we could throw ourselves back into the economic doldrums -- and increase the very deficit we are trying to reduce.
Here, for example, is excellent advice from the deservedly respected (and thoroughly pro-market) economic columnist Martin Wolf, offered last week in The Financial Times: "The federal government is not on the verge of bankruptcy. If anything, the tightening has been too much and too fast. The fiscal position is also not the most urgent economic challenge. It is far more important to promote recovery. The challenges in the longer term are to raise revenue while curbing the cost of health. Meanwhile, people, just calm down."
I take it Dionne will be less than thrilled to hear Paul Ryan say he expects the sequester to happen.