The Fiscal Non-crisis

Brad Delong and Paul Krugman concur–the latest numbers from the CBO make it absolutely clear that we do not have a short and/or medium-term deficit crisis:

It’s not even a picture of a crisis. The new CBO long-term budget projections are out, and while they’re not good, they don’t show crisis levels of debt even looking out a quarter-century. Unless, that is, you believe that debt of 100 percent of GDP is the end of the world even though Britain exceeded that level for a large part of its history…

The point is not that we should completely ignore issues of fiscal responsibility. It is that we are nowhere near fiscal crisis; we aren’t even looking at anything like a fiscal crisis 15 or 20 years from now. So budget deficits, entitlement reform, and all that simply don’t deserve to be policy priorities, let alone dominate the national discussion the way they did for the past few years.

A lot of destruction has occurred over the last 3 years because of an unhealthy fear of fiscal crisis; why couldn’t all of our deficit reduction have taken place two years from now when a solid recovery was underway? Utterly senseless…

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