Krugman applauds Obama budget for bucking "craven and irresponsible" fixation on the long run

Why the president's budget proposal is sure to make all the right people unhappy

By Luke Brinker
Published February 2, 2015 1:45PM (EST)
Paul Krugman                                                                                                                                                       (Reuters/Chip East)
Paul Krugman (Reuters/Chip East)

Breaking with years of bipartisan austerity, President Obama will unveil a 10-year budget today that proposes massive tax relief for low- and middle-income workers, tax increases on the wealthiest Americans, and massive investments in education and infrastructure. Jettisoning the Beltway's dearly-held conventional wisdom that policymakers should focus on supposed long-term threats to U.S. solvency, the president's budget puts its emphasis squarely on tackling the immediate challenges of socioeconomic inequality, decaying infrastructure, and a labor market that, though improving, needs to be grown further. Dealing with such challenges, it just so happens, will also reap long-term benefits.

In his New York Times column this morning, Nobel Prize-winning economist Paul Krugman applauds the president's willingness to buck the long-termers. This "craven and irresponsible" group of people, as Krugman tars them, have spent the past half-dozen years  focusing with laser-like intensity on the purported threat social insurance programs pose to the U.S. government's long-term fiscal health, even as the nation remained mired in a stagnant recovery. (In Europe, too, policymakers responded to a depressed economy by advocating long-term structural reforms, Krugman observes.)

What's wrong with worrying about the long term? Krugman identifies two crucial problems: First, the long-termers' policy crusades have detracted attention from the real crises we confront in the here-and-now. Second, it's by no means clear that their projections of doom will bear out. For instance, health care costs -- long identified as a potential death knell for Medicare -- continue to grow at a remarkably slow rate, for reasons well beyond the recent economic slump.

Now, when Obama presents Congress with his budget today, centrist deficit hawks and newly-empowered Republicans will undoubtedly assail it as irresponsible and nothing short of an insult to our children and grandchildren. But Obama's critics are actually the ones engaged in a "cop-out," Krugman argues:

It goes without saying that Mr. Obama’s fiscal proposals, like everything he does, will be attacked by Republicans. He’s also, however, sure to face criticism from self-proclaimed centrists accusing him of irresponsibly abandoning the fight against long-term budget deficits.

So it’s important to understand who’s really irresponsible here. In today’s economic and political environment, long-termism is a cop-out, a dodge, a way to avoid sticking your neck out. And it’s refreshing to see signs that Mr. Obama is willing to break with the long-termers and focus on the here and now.

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