Peggy Noonan Shouldn't Write About The Budget
Peggy Noonan's column about the budget in last Friday's Wall Street Journal (I could probably stop here and know that I've said all that needs to be said) shows why someone who doesn't know anything about the budget or economy shouldn't write about them.
One sentence in particular caught my eye:
"People are freshly aware and concerned about the real-world implications of a $1.6 trillion dollar deficit..."
Peggy...Has anyone ever told you that you have to consider the economic context in which a deficit occurs? A deficit even half that size when the economy was growing, like the ones that happened during Bush 43, were indeed a disaster. But last year's deficit of $1.4 trillion, which occurred when monetary policy was having no effect and when businesses and consumers weren't spending, not only was the correct fiscal policy, it was a triumph. The same will be true this year if the deficit is $1.6 trillion.
In other words, the real-world implications you say people are so concerned about are actually quite positive in the current environment.
The problem is not that the deficit is high now, it's that the deficit wasn't reduced when the economy was in better shape. Peggy...Where were you then?
Are Pundits Educable?
Speaking as a mini-pundit to a major pundit and intending to comment on super-majors I wonder what what would happen if you tried to sit Ms. Noonan down and explain how this works? Or is it possible she's too tied in with the Bartley WSJ oped page legacies? More interesting would to have this conversation with Brooks - who by all accounts is educable but continues to display a sophisticated lack of understanding of how the sawmill really works. That might have a higher payoff.
BtW - last week there was a marvelous panel discussion on deficits and debts on Rose with Krugman, et.al. that was very well done.
let's tighten that up a bit
This is a fine post. But why did you add the unnecessary "about the deficit" part to your post title?
Yeah, right...
The only reason you call this debt "a triumph" is because it belongs to your party.
Peggy Noonan
Noonan was writing about the politics of the budget and the economy, and to this it seems indisputable that many people are concerned about the size of the deficit. I understand your claim that this concern is unwarranted. The public reaction to Thatcher's poll-tax may have been overblown too but, as Noonan notes, it was the beginning of her political downfall.