…because I’m an economist and a mom–that’s why!

What Is a “Deficit Hawk” and What Do We Want to Attack?

February 23rd, 2009 . by economistmom

Thank you, Andrew Samwick, of Capital Gains and Games for clarifying what makes someone a “deficit hawk”–and what it is that those who deserve the title wish to eliminate:

In today’s Washington Post, Robert Kuttner laments that so-called* [go read Andrew's asterisk] deficit hawks in Congress are trying to make the link [between the current explosion in the deficit and the need to reform (or even destroy) Social Security and Medicare].  He opens with:

With the enactment of a large economic stimulus package, fiscal conservatives are using the temporary deficit increase to attack a perennial target — Social Security and Medicare.

It may be that the recent increase to the deficit is temporary.  But even a temporary increase in the deficit is a permanent increase in the debt unless there is enacted some way to specifically repay that debt in the near future.  Note the word “repay.”  It is not enough to just stop running ridiculously high deficits.  To repay them, we need to run surpluses.  We are nowhere near that.  What we got from the Obama Administration was yet another weak use of the phrase “cut the deficit in half” by 2013.

So Kuttner is out of his mind if he thinks that we haven’t permanently increased the debt burden on future generations.  This is where the link to entitlement programs comes in (for those who need one).  From the point of view of future taxpayers, a dollar of debt is a dollar of debt, whether it is debt held by the public or the unfunded obligations of entitlement programs that we refused to reform.  This was a problem for President Bush, who insisted that we had a Social Security cost problem that we had to fix but refused to acknowledge that Medicare Part D that he signed into law and the deficits ensuing from the 2001 and 2003 tax cuts each created debt that was larger or comparable to the projected unfunded obligations in Social Security.

We deficit hawks want to attack the deficit–from all potential angles, whether it be by better controlling costs in Social Security and Medicare (even if via controlling health care costs in general), by reducing wasteful, unnecessary, or inefficient spending, or by raising a more adequate level of revenue.  We do not point out the unsustainability of the entitlement programs in order to sabotage those programs.  We point it out because we want to strengthen and hence sustain those programs.  But I’ve tried to explain that before, to no avail with folks like Kuttner.

But thanks, Andrew, for trying.

UPDATE 2/24:  Here is a response to the Kuttner op-ed from Dave Walker in a letter to the editor in today’s Washington Post.

3 Responses to “What Is a “Deficit Hawk” and What Do We Want to Attack?”

  1. comment number 1 by: Anandakos


    See below. Someone needs to work on the “edit” functionality of the website.

  2. comment number 2 by: Anandakos


    I too am a “deficit hawk” and would passionately wish to run a modest true surplus “over the business cycle” in order to reduce the burden we transfer to the future. But as I have said before, the Republicans simply refuse to agree with the need for surpluses. The minute there is one more dime of money arriving in the Federal Treasury than is needed for cops and soldiers (to protect THEIR property) they’re immediately on their soapboxes screaming of the need to “give the people’s money back!”

    They are willing to encumber the nation with trillion dollar wars of choice, but they are little worse that way than my party and its never-ending urge to “fix” society.

    I have no idea how to solve the problem; it seems an inherent flaw in democracy. Living people will always value their lives more than those of future generations. It’s not uncommon for people to value them more even than the lives of their own children.

    Perhaps the “gnomes of Beijing and Dubai” will solve it for us by refusing to buy more Treasury Junk. The chaos that would cause would be a good thing in the end, but I fear that the droolers with guns will kill a large number of talented people along the way.

  3. comment number 3 by: Miracle Max

    A permanent, finite increase in the debt is decreasingly onerous over time, since the interest on any fixed increment to debt is progressively smaller relative to GDP, income, and the tax base over time.

    So I still find you and especially Mr. Walker hyperbolic on deficit finance. Especially the latter’s effort to hijack discussion of every conceivable policy issue to bloviate about debt and neglect the substance of health care reform.