Alan Blinder had an op-ed in yesterday's WSJ titled "Four Deficit Myths and a Frightening Fact." Three of Blinder's myths are more accurately called straw-men, one is a non-sequitor, and his frightening fact is news only to him:
"Myth No. 1 is that the American people now demand deficit reduction as never before." I've never actually heard anyone say anything like this, so I'm not convinced that it rises above straw-man status. To disprove this alleged myth, Blinder says that "public opinion polls show that the budget deficit is nowhere close to being Economic Public Enemy No. 1" and that "(p)oll numbers on these matters today look much the same as they did 20 or 30 years ago." Pretty weak stuff. Straw man
"Myth No. 2 is that America's deficit problem is so acute that government spending must be cut right now, despite the struggling economy. And any fiscal stimulus, even the payroll-tax extension, must be 'paid for' immediately." Again, I don't think there ae many who actually hold this view. None of the proposals out there call for spending cuts right now. At most they trim the growth of future spending. As for paying for the payroll-tax extension, if a policy is completely ineffective as stimulus, we shouldn't pretend that it is by paying for it through further borrowing. Straw man
"Myth No. 3: For several years now, our political system has focused exclusively on the 10-year cumulative budget deficit. Whether it's proposals like 2010's Simpson-Bowles or Domenici-Rivlin, the ill-fated Obama-Boehner grand bargain," or the failure of the so-called super committee, every high-profile deficit-reduction plan has focused on the next 10 years." I have no idea what he's going on about. Perhaps this is not meant to be a myth but a statement of fact that we've been doing something we shouldn't have been doing. Non-sequitor
"Myth No. 4 is that America has a generalized problem of runaway spending, one that requires cuts across the board." I'm not sure how widely held this belief is and I don't know of any proposal of note that relies on across-the board cuts. Every serious proposal out there to cut spending is mostly about entitlements. Straw man
Blinder's Frightening Fact: "The truth is that we have a huge problem of exploding health-care costs, part of which shows up in Medicare and Medicaid spending." Is this just dawning on him? What does he think people have been talking about for the past few years?
