UPDATE 9/22/10 7:45 PM ET: Sen. Durbin’s view was not reported accurately by Bloomberg. He believes we should not begin deficit reduction until unemployment drops below 6%, not 9% as stated in the initial post below. More details here.
Last week, 300 economists warned Washington of the “grave danger” that a “premature focus on deficit reduction could slow growth and increase unemployment – and could push us back into recession.”
Someone got the message. And he just happens to be the highest-ranking Senator on the White House’s deficit commission.
Sen. Richard Durbin told Bloomberg that we shouldn’t start cutting the deficit until the unemployment rate drops below 9 percent:
Congress shouldn’t make cutting the federal deficit a greater priority than creating jobs until the U.S. unemployment rate falls to 9 percent or lower for at least half a year, the second-ranking Senate Democrat said in an interview.
“If we have two or three quarters of 9 percent or less” then Congress can “breathe a sigh of relief” and “move forward on what we need to do on this deficit,” Senate Democratic Whip Dick Durbin said yesterday in an interview at Bloomberg headquarters in New York.
Now, it may well be that our 300 economists would not agree with Sen. Durbin that an unemployment rate of 8.9% is a low enough threshold to start reducing government support for the economy.
But Durbin is embracing the basic point: when you’re in a jobs crisis, jobs takes precedence over deficit reduction.
The question should be posed to everyone else on the White House deficit commission: do you agree with the 300 economists who have warned against putting deficit reduction ahead of jobs?
Because if the other commission members can’t accept Econ 101, it would undermine the credibility of their entire package of recommendations.