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Economic Growth

Government

Is Obama's Budget a Deficit Enabler?

Do people who write on the budget have any understanding of the topic? The answer seems to be "no," since we have an obsession with the size of the budget deficit when the economy has 9.0 percent unemployment.

If budget reporters understood their topic, then they would be asking politicians like President Obama and the Republican congressional leaders why they are not doing more to create jobs. The reason that we have 9.0 percent unemployment is that private sector demand plummeted in the wake of the collapse of the housing bubble. In the short-term, the only way this demand can be replaced is by increased demand from the government.

This is why reporters should be pressing politicians as to why they are not supporting larger deficits in order to get people back to work. Tens of millions of workers are suffering from unemployment or under-employment not because they lack the skills or desire to work, but because people like Alan Greenspan and Ben Bernanke failed disastrously in their roles as managers of the economy. This amount of needless suffering should be unacceptable in the United States.

Dean Baker / February 14, 2011