Excellent analysis in today’s HuffPo.
Some of my readers know that when it comes to inflation and the deficit – the biggest concerns of CNBC talking heads, WSJ editorial page and conservatives in general – I’m a dove. That means that I do not think that addressing inflation and deficit should be as high on our list of priorities as addressing unemployment. In other words I’m an unemployment hawk and deficit dove. Just like Paul Krugman.
This “deficit” obsession of the media has completely overshadowed the real problem that plagues Americans today – unemployment. But unemployment doesn’t get the same amount of urgency of “experts” on TV.
I like to compare the current predicament (budget deficits vs. unemployment) to a person with too much credit card debt who just crashed his car: do you think that the amount of debt he has should prevent him from getting his car repaired immediately? Even if it means additional charges on a credit card? I think it shouldn’t, but according to deficit hawks it should. They argue that he should first reduce his credit card debt and only then go to the auto-repair shop. They don’t give the same degree of urgency to his ability to get around town and get to work as they do to the level of his indebtness.
There will be a time for us to address both inflation (that has stubbornly NOT appeared despite dire warning coming from various hawks for years) and the debt. But that time isn’t now.