The widening federal budget deficit has yet to result in economic calamity, but as more money goes to interest payments on debt, less is available for things like infrastructure, schools and social benefits
It’s no longer cool to talk about the federal budget deficit.
All told, Washington’s red-ink alarms have gone dead, even though the annual deficit will reach roughly $900 billion this year, then pass the trillion-dollar mark annually starting in 2022. The accumulated public debt just surpassed $22 trillion.
The question is: Is this lack of concern wise?
Certainly the political constituency for deficit reduction is evaporating. Conservatives see deficit talk as a not-so-hidden ploy to roll back tax cuts, and an attempt to blame President Trump for all the red ink. Liberals see deficit talk as a not-so-hidden ploy to justify cutting Medicare, Medicaid and Social Security.
Indeed, in an important new essay in Foreign Affairs magazine, two Democrats, former National Economic Council head Jason Furman and former Treasury Secretary Lawrence Summers, argue explicitly against focusing on deficit reduction.