It’s hard to think intelligently about public debt and deficits.
The economics of fiscal policy is complicated and defies straightforward prescriptions. What’s most striking about budget-making in Washington today, though, is not that legislators are confused about what good debt-management requires. It’s that they’ve just stopped thinking about it.
If passed by the Senate, last week’s vast House budget bill would add between $3 trillion and $5 trillion to deficits over the next 10 years. Yet the plan hasn’t divided the country’s politicians according to whether it’s fiscally reckless. Nowadays, that issue rarely comes up. All that matters is who gains and who loses from the proposed changes to taxes and spending. Whether the economy is heading for fiscal breakdown isn’t Washington’s concern.
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