Deficit, Shmeficit

One of my favorite wonks, Ezra Klein, says, “Don’t Worry About Deficit That Will Heal Itself”:

“I’m not particularly worried about the budget deficit.  In fact, of all the major problems the U. S. faces, I’m least worried about the deficit.

“If Congress is unable to agree on a remedy, the problem goes away on its own.

“[At the end of 2012] the Bush tax cuts are set to expire.  The $1.2 trillion spending sequester, enforcing cuts in the defense and domestic budgets, is set to go off.  Various stimulus measures — including the payroll tax cut — are scheduled to end.  ‘Taken together…these policies would reduce ten-year deficits by over $6.8 trillion….’

“In face, if Congress gridlocks — and what does Congress do these days but gridlock? — we face the prospect of too much deficit reduction too fast.

“But those charts are really about health-care spending….  What they’re really telling us is this:  If you look at how medical costs have risen in recent decades and you draw that line out for 70 more years, we’re really in trouble.  And that’s true:  We are.

“But there’s something ridiculous about extrapolating current trends all the way out to 2080.

“Look what happens when you turn the clock back 70 years from today.  That puts you in 1942, the year John Bumstead and Orvan Hess first saved a patient’s life using penicillin.  There were no pacemakers, oral contraceptives or chemotherapy.  Water wasn’t fluoridated and health insurance was a niche product.  Imagine trying to predict the trajectory of today’s health-care system from that vantage point.  How incredibly, hilariously wrong would we have been?

“In part for that reason, we don’t balance the budget for 70 years at a time.  Indeed, we usually don’t even balance it for 10 years at a time.  Instead, we muddle through, striking deals that are smaller than wonks like, but sufficient to keep us out of the woods.

“Of course, you can muddle wisely or muddle stupidly.  I worry we’ll choose the latter.  Evidence is already mounting:  The sequester is a stupid way to cut spending.  Letting the Bush tax cuts expire all at once is a stupid way to raise taxes.  And repeatedly forcing the country to the brink of default is a stupid way to manage our budget.

“Worse, too much deficit reduction too fast will hurt economic growth.

“Nevertheless, I’m confident that we will, one way or another, muddle through.  Because when it comes to the deficit, Congress really has two choices:  Do something to solve it, or do nothing and let that solve it.  The same can’t be said for issues such as infrastructure and loose nukes and climate change and preparing for pandemic flu.  On those questions, congressional inaction isn’t enough to make the problem disappear.  So those are the issues I worry about.”

I’m with Ezra.  I worry about pretty much everything, but not the deficit.

Read the whole thing at Bloomberg.com.