Deficits May Matter, But Less Than Anything Else
The speed with which the Obama-McConnell tax cut deal swept away the prior Beltway discussion of deficit reduction remains a vastly under-discussed topic. Here's Matt Yglesias' summary of the development and its implications for progressives:
The deficit is a problem only in the sense that the short-term deficit is currently too small. But this is one reason I'm surprised so many liberals are being so stinty in their praise of the recent tax deal. We'd just all been spending 12 months arguing that contrary to the conventional wisdom, short-term deficits should be smaller. We also spent a lot of time observing that conservative deficit-talk is fraudulent and all they care about is tax cuts for the rich. Then the Obama administration, after a year of fruitless austerity gambits, finally called their bluff. "Fine, you can have your deficit-increasing tax cut extension, but give me some other deficit-increasing stuff that my economists say has a higher multiplier than your tax cuts for the rich." Now the deal is done, and for all the panels and commissions and all the money Pete Peterson's spent the parties are coming together to make the deficit bigger.
I'd add to Matt's analysis the point that conservative critics of the tax cut deal by and large aren't opposing it on deficit-reduction grounds, but in fact are demanding permanent tax cuts that will increase deficits still more.
This is going to be worth remembering when Republicans engineer a big phony display over the deficit in connection with current-year appropriations and/or the debt limit.