David Leonhardt at the New York Times gets it exactly right:
The reasons for the new American austerity are subtler, but not shocking. Our economy remains in rough shape, by any measure. So it’s easy to confuse its condition (bad) with its direction (better) and to lose sight of how much worse it could be. The unyielding criticism from those who opposed stimulus from the get-go — laissez-faire economists, Congressional Republicans, German leaders — plays a role, too. They’re able to shout louder than the data…
In an ideal world, countries would pair more short-term spending and tax cuts with long-term spending cuts and tax increases. But not a single big country has figured out, politically, how to do that.
This is the problem, very elegantly put. With a slight change in priorities and with the right mix of policy, wiping out the deficit is a very doable task. Only bad politics is screwing over the right policy.
I also love Paul Krugman’s refutation of David Brooks’ recent op-ed, and this wonderful deficit calculator from the Center for Economic and Policy Research, which shows you just what policies would get us to a budget surplus.