South By North Strategies, Ltd.

In The American Prospect, Robert Kuttner looks at the politics of federal deficit reduction and how proposed solutions are alarmist and ultimately self-defeating.  Argues Kuttner:

Long-term fiscal balance is necessary policy, but we can reduce the debt burden without slashing social outlay. That’s exactly what we did during the quarter–century boom after World War II, when we combined high growth rates, modest budget deficits, progressive taxation, a declining debt burden — and increases in social spending. That growth was partly driven by public investment.
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The current argument about deficits and debts conflates several entirely distinct issues. Do we need bigger economic stimulus now to promote a faster recovery? (Yes.) Should we reduce deficits and the ratio of debt to GDP once a strong recovery comes? (Yes.) Does this require an extra-legislative commission? (No.) Do we need to slash social insurance in order to achieve fiscal balance? (No.) Are there other ways to get to a sustainable budget? (Most definitely.)