In an otherwise straightforward depiction of the Blue Dog Democrats' role in the House debate over the bailout bill, Time's Jay Newton Small offers this nugget:
When [Blue Dog Chairman Rep. John] Tanner talks about financial crises, he means not just the credit crunch on Wall Street but the massive deficits breaking the back of the federal government.
How, exactly, are the massive deficits "breaking the back" of the federal government? Deficit spending is generally amoral -- it's where the spending goes that determines if it is a good decision or not to borrow money for the federal government. In some cases, including a recession, deficit spending is an important tactic to kick-start the economy -- see Larry Summers here and here. Bill Clinton was able to balance the budget and gain surpluses at the end of his time as president because the economy was running strongly during his tenure, but our future president will face a very different economic situation. (For more on how the Blue Dogs will affect the next president's agenda, check out my magazine piece.)
But how could Small write this sentence with a straight, er, pen? Has the government stopped functioning because of the deficits, and we just didn't notice?
--Tim Fernholz
