I’m back in DC after a great trip to Denver with many of my Concord Coalition colleagues. It’s work trips like that that make me feel so fortunate to have a job that I love so much that it doesn’t at all feel like “work”–and where dedicated colleagues become dedicated friends. And yesterday’s Concord-sponsored student summit at the University of Denver involved an unusually large group of “friends of Concord” policy experts and filmmakers (Patrick Creadon and crew), so it was unusually special.
I moderated the second panel on the economic consequences of budget deficits (the entire session in the YouTube video above), where my friends Bill Gale and Donald Marron offered their wisdom through their very clear and engaging way of explaining things. I really liked Bill’s analogy between the short- and longer-term effects of deficit spending and the short- and longer-term effects on athletic performance of consuming sugar and caffeine–but I couldn’t resist pointing out where the analogy wasn’t “perfect.” My main point: the short- and longer-term goals for athletic performance are easier to define–you know when the next race is coming up, you know exactly when to take the sugar and caffeine right before the race, and after the race you how to get back to the longer-term healthy diet to train and prepare for the next race (and you know when that next race will be). And when the short-term performance is over, you can easily avoid any possible lingering adverse effects of the sugar and caffeine “injections” by simply not consuming that sugar and caffeine after the race is over. There’s where the analogy with deficit spending isn’t perfect–because I think the effects of short-term deficit spending as stimulus often “linger” as longer-term policy in a harmful way. Basically, sugar and caffeine are more effective short-term “stimulus” to the body than deficit spending is for the economy, because it’s easier to make sure that the sugar and caffeine are used in a “timely, targeted, and temporary” (the “three Ts”) manner. I likened this to a runner not just consuming “GU” (pronounced “goo”) gel right before or during a race, but continuing to consume it (not being able to stop consuming it) after the race was over as their primary form of nutrition…not a good idea. After defending the perfection of his analogy(!), Bill did respond (and Donald agreed) that yes, there’s a lot of deficit spending that’s been done in the name of short-term stimulus that would make very ill-advised longer-term fiscal policy, especially if deficit financed–and that we certainly see how difficult it is to keep temporary policies truly temporary in the real policymaking (and political) world.
In the last 20 minutes or so we took some really great questions from the mostly-student audience, with very thoughtful replies from Bill and Donald, so please check out the video. It’s not so “gloom and doom”–and I especially like the last question and responses. I think the bottom line about what my generation passes along to my daughter’s regarding fiscal responsibility is the lesson (by unfortunate demonstration) that we cannot go on living beyond our means–but at the same time a lot of promise that the potential “means” facing my daughter are (still) very great.
The full set of videos from yesterday’s summit can be found here on YouTube.
And here’s a video of last night’s Fiscal Wake-Up Tour–which got a little interesting when the topic of health care reform came up, reminding us a little bit of the August town hall meetings on health reform.
Donald came home (back to DC as well) earlier today and mused on his carry-on luggage experience on his blog–a lot more fun than talking about what we talked about at the summit. Bill is still enjoying CO with his U of CO son but doesn’t blog anyway.