Washington is having the wrong debate!

Watching Congress and President Obama debate the best way to get the short-term deficit is under control is a lot like being trapped on a train behind two lovesick teens intensely debating Team Edward vs. Team Jacob. After a couple of hours, you just want to lean over their seat and say, as politely as possible, “This is a stupid, irrelevant debate that you’ll be embarrassed you had when you grow up a little bit.”

Long-term, of course, the deficit and debt are serious issues that the United States must deal with. But this in an instance when Congress really ought to be listening to the polls, which clearly show the public is more concerned about jobs and the economy than about the deficit. The public isn’t always right. This time, the polls are dead on.

Talking Points Memo has a good look at the debt issue. Looking at the nation’s historic deficit as a percentage of GDP, as TPM does, puts things in perspective. As you can see from the chart below, the current deficit isn’t even an outlier. Deficits were much higher in the late ’80s relative to the economy than they are now. They were magnitudes greater during World War II. We are not in a World War, of course, but we have been fighting two wars simultaneously, with the one in Afghanistan nearing the decade mark.

What should be far more concerning to America’s politicians is the plateau at the tail end of this graph.

This is the graph of unemployment since the late 1940s. As you can see, the early ’80s recession resulted in a higher peak than we’re currently experiencing, but it didn’t last as long. In fact, this appears to be the highest sustained level of unemployment since the early ’80s, and it’s showing no sign of coming down fast anytime soon.

This is what Washington ought to be concentrating on. As TPM said, “when people get back to work, revenues will climb, and deficits will shrink on their own.”

Long-term is a different story. Health care costs will drive deficits and the debt to unsustainable levels. But solving that requires lowering the rate of increase for health care costs, not cutting spending.

We’re not having that debate, either, and there’s little sign that anyone in D.C. is close to realizing how irrelevant the current debate is.

 

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