Republicans have become born-again deficit hawks, decrying the debt President Obama is handing America’s grandkids. “What’s missing,” writes Steven Pearlstein in the Washington Post, “is any sense of perspective.” The added $2 trillion pales before the $66 trillion spent annually on Social Security and Medicare, and could be paid back in a year, if the US cut spending 15%. That would hurt—but not as much as doing nothing about the recession.
Government debt is notable, but in the past decade, household debt and business debt has doubled. Now, all that debt is being deleveraged. That ought to be a good thing, but with everyone doing it at once, the government needs to spend to prevent a downward spiral toward depression. The grandkids will be glad it did.