Obama: Don't Worry About The Deficit

Bernie Horn is right that the most immediate fight we face [1] is to prioritize massive public investment to get the economy back on track and de-prioritize short-term deficit reduction.

One thing now is crystal clear: which side the President-Elect is on.

On "60 Minutes" last night [2], President-Elect Barack Obama squarely planted his flag for robust public investment and against deficit reduction.

STEVE KROFT: Where is all the money going to come from to do all of these things? And is there a point where just going to the Treasury Department and printing more of it ceases to be an option?

PRESIDENT-ELECT BARACK OBAMA: Well, look, I think what's interesting about the time that we're in right now is that you actually have a consensus among conservative Republican-leaning economists and liberal left-leaning economists.

And the consensus is this:

That we have to do whatever it takes to get this economy moving again. That we're gonna have to spend money now to stimulate the economy. And that we shouldn't worry about the deficit next year or even the year after. That, short term, the most important thing is that we avoid a deepening recession.

Bernie is understandably concerned that polls show [3] strong support for "reducing the federal budget deficit.” But I doubt the public holds such a view all that strongly.

Budget deficits sound irresponsible at first blush, so in a vacuum, questions about cutting the deficit will garner gut support. But once a debate is fully engaged, and the actual economic consequences made clear, those numbers can easily flip.

We must make it clear that the fiscally responsible thing to do is robust public investment that will stave off deep recession in the short-term, and pay off big with sustainable jobs, modern infrastructure, clean energy and affordable health care in the long-term.

The fiscally irresponsible thing to do is to myopically slash and burn so the budget numbers line up on paper today but our economic foundation collapses tomorrow.

We must engage this debate, and not remain passive on the sidelines.

Even though we have a progressive mandate, that does not mean we automatically get our way on every issue. We must take on anti-government conservatives and deficit-obsessed Blue Dog Democrats on the merits, and maintain the clear edge we have in public opinion.

But as both Bernie and the President-elect noted, we have the general consensus of economists on our side.

And we have a President-elect who is willing to engage in a substantive debate and make arguments based on the merits.

Not a bad asset to have.