The Urgency of Economic Growth

Challenging the Deficit Doomsayers

If you care about deficits, you should want our economy to grow faster. If you care about lifting up the poor and reducing unemployment, you should want our economy to grow faster. And if you are a committed capitalist and hope to make more money, you should want our economy to grow faster.

The moment's highest priority should be speeding economic growth and ending the waste, human and economic, left by the Great Recession. But you would never know this because the conversation in our nation's capital is being held hostage by a ludicrous cycle of phony fiscal deadlines driven by a misplaced belief that the only thing we have to fear is the budget deficit.

Let's call a halt to this madness. If we don't move the economy to a better place, none of the fiscal projections will matter. The economic downturn ballooned the deficit. Growth will move the numbers in the right direction.

Moreover, the whole point of an economy is to provide everyone with real opportunities for gainful employment and economic advance -- the generational "relay" that San Antonio Mayor Julian Castro affectingly described at last year's Democratic convention. When we talk only about deficits, we take our eyes off the prize.

But there is good news. Gradually, establishment thinking is moving toward a new consensus that puts growth first and looks for deficit reduction over time. In the last few months, middle-of-the-road and moderately conservative voices have warned that if we cut the deficit too quickly, too soon, we could throw ourselves back into the economic doldrums -- and increase the very deficit we are trying to reduce.

Here, for example, is excellent advice from the deservedly respected (and thoroughly pro-market) economic columnist Martin Wolf, offered last week [registration required] in The Financial Times: "The federal government is not on the verge of bankruptcy. If anything, the tightening has been too much and too fast. The fiscal position is also not the most urgent economic challenge. It is far more important to promote recovery. The challenges in the longer term are to raise revenue while curbing the cost of health. Meanwhile, people, just calm down."

"Calm down" is exactly what we need to do. We have been inundated with apocalyptic prophecies about our debt levels. While they come from the center as well as the right, Republicans are using them to turn the next two years into a carnival of contrived crises. These will (1) make normal governing impossible -- no agency can plan when budgets are always up in the air; (2) distract us -- we need to think about measures, such as an Infrastructure Bank, that would promote prosperity now and into the future; and (3) drive business people crazy -- no enterprise would put itself through the contortions that are becoming part of Washington's routine.

Only if you believe that deficits mean the end is near can any of this be justified. Sen. Mitch McConnell, the Republican minority leader, perfectly encapsulated the effort to diminish the importance of all else (including growth) when he declared recently that "deficit and debt" constitute the "transcendent issue of our era."

No, it's not. As Bruce Bartlett, the bravely dissident conservative economics specialist wrote a few days ago: "In fact, our long-term deficit situation is not nearly as severe as even many budget experts believe. The problem is that they are looking at recent history and near-term projections that are overly impacted by one-time factors related to the economic crisis and massive Republican tax cuts that lowered revenues far below normal."

Former Treasury Secretary Lawrence Summers warned in The Washington Post that we can't "lose sight of the jobs and growth deficits that ultimately will have the greatest impact on how this generation of Americans lives and what they bequeath to the next generation." And economists at the International Monetary Fund have offered some honorable mea culpas about underestimating the damage that ill-timed austerity programs have done to growth -- and also to the fiscal positions of the nations affected by them.

You have to hope that President Obama will use his State of the Union message to speak forcefully for growth and the public investments that will foster it. But sensible people also need to rise up and tell the congressional doom-mongers that they have to calm down and end their wholly destructive campaign to turn our great system of self-rule into a government by deadline and emergency. 

(c) 2013, Washington Post Writers Group

About the Author

E. J. Dionne Jr. is a syndicated columnist, professor of government at Georgetown University, and a senior fellow at the Brookings Institution. His most recent book is Our Divided Political Heart: The Battle for the American Idea in an Age of Discontent (Bloomsbury Press).

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Demand feeds growth in any economic theory. In San Francisco in 2011 there were only two permits for building cranes. Now there are 25 active building cranes ,one third for apartment houses 2/3rds for tech companies. . The demand for housing nationally has been suppressed for 5 years. The Young are crowding in now with multiple room mates and moving back to mommy basement for the last  5 years.This housing boom can't be out sourced so the boom, demand driven in the next year, will have  even Cantor and McConnell  taking notice and maybe shut up. .

Dionnes problem is he is unable to overcome short term memory.  , He continues to endorse policies, politicians and a President who has no idea how to truly stimulate the economy to accomplish the growth we need.  Mostly because Obama's and Dionnes vision is some version of socialism that reputes to make evreyone equal economically, but will never do so without repression and evil acts.  We have seen the tryanny that brings to a society in China, Cuba, Venzuela,etc.  ANd we know morally that God created us as equal in our right to life, liberty and the pursuit of happiness but God doesn't create us equal in talents, health care or economically.  He allows us to use our talents and free will to determine that.  Dionne needs to learn that you cant BUY a right.

 This is the first President who has been unable to create policies and deliver leadership yo get us out of recession within 18 months and as we know this recession was no greater than the numerous other ones, especially Jimmy Carter's. Maybe Dionne should start looking for someone who can deliver economic growth because his guy doesn't know how to ... and even seems not to care.

SB Gravely... DOW @14000 vs @ 6500 when Obama took over... your #s please w/o the  commie bugaboo.

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