Deficits Are Political Footballs

TW: This Krugman piece frames a key point. Deficits are a great tool about which to squawk but there is little political traction in actually doing something about them. Clinton balanced the budget (with ZERO Republican votes in 1993) and three years later folks had forgotten who had done the work (see chart below).

When times are good the Republicans want to cut taxes and Dems raise benefits (Republicans like to raise benefits too, of course). Folks do not worry about deficits during good times. Good times are exactly when folks should care because that is when they could be cut relatively painlessly. Not surprisingly, this ignorant and selfish mindset by voters results in politicians acting like the voters i.e. beating the deficits drum in times like now (Great Contraction) and blissfully ignoring deficits in times of relative economic strength. We get the governance we deserve.

From Paul Krugman at NYT:
"Matt Yglesias makes a good point:
'A lot of politicians and political operatives in DC are very impressed by polling that shows people concerned about the budget deficit. I think it would be really politically insane for people to take that too literally. If congress makes the deficit even bigger in a way that helps spur recovery, then come election day people will notice the recovery and be happy. If, by contrast, the labor market is still a disaster then people will be pissed off. It’s true that they might say they’re pissed off at the deficit, but the underlying source of anger is the objective bad conditions. '

But the political argument against focusing on the deficit is even stronger than he realizes — because there are very good odds that even if Obama exhibited iron fiscal discipline, voters wouldn’t notice. There’s a remarkable, depressing paper by Achen and Bartels that includes an analysis of voter views of the deficit in 1996 — by which time the huge deficit that Bill Clinton inherited had been drastically reduced. Here’s what voters thought they knew:

American Political Science Association

Yep: after one of the biggest moves toward budget balance in history, a majority of Republicans, and a plurality of all voters, believed that deficits had increased.
Not to put too fine a point on it: if Obama succeeded in reducing the deficit, would Fox News or the Washington Times report it? ..."
http://krugman.blogs.nytimes.com/2009/10/30/if-a-deficit-falls-in-the-forest/