As a general note, I don't think anyone should be surprised that Geithner and Summers won the Administration's internal argument over the importance of long-term deficits. If you look at the economic team that Barack Obama assembled -- Larry Summers, Timothy Geithner, Peter Orszag, Jason Furman, and Gene Sperling -- you're mainly looking at a who's who of Robert Rubin proteges (notable exceptions: Romer, Goolsbee, Volcker, and Bernstein). It's possible that Obama is ratifying the Rubin record by accident, but it's unlikely.The initial insight -- or, depending on your perspective, fixation -- that separated Rubin's team from traditional Democratic economists was simply this: Long-term deficits matter. Rubin's argument in the early-90s was that the large deficits induced by Reagan's tax cuts had driven up interest rates and made it more expensive for the private sector to borrow money. That was why growth was sluggish. Deficit reduction would lower interest rates, stimulate private sector activity, and increase productivity. Deficit reduction thus became a key priority for the Clinton administration. In the short-term, of course, we're not dealing with an interest rate problem. But the long-term deficit reduction being pushed by Summers and Geithner is no surprise: They don't want to face a situation in which we pull out of short-term crisis but growth doesn't restart because interest rates shoot up. I don't know if they're right about all that, but it's not a surprising approach. RETURN OF THE RUBINITES.
As a general note, I don't think anyone should be surprised that Geithner and Summers won the Administration's internal argument over the importance of long-term deficits. If you look at the economic team that Barack Obama assembled -- Larry Summers, Timothy Geithner, Peter Orszag, Jason Furman, and Gene Sperling -- you're mainly looking at a who's who of Robert Rubin proteges (notable exceptions: Romer, Goolsbee, Volcker, and Bernstein). It's possible that Obama is ratifying the Rubin record by accident, but it's unlikely.The initial insight -- or, depending on your perspective, fixation -- that separated Rubin's team from traditional Democratic economists was simply this: Long-term deficits matter. Rubin's argument in the early-90s was that the large deficits induced by Reagan's tax cuts had driven up interest rates and made it more expensive for the private sector to borrow money. That was why growth was sluggish. Deficit reduction would lower interest rates, stimulate private sector activity, and increase productivity. Deficit reduction thus became a key priority for the Clinton administration. In the short-term, of course, we're not dealing with an interest rate problem. But the long-term deficit reduction being pushed by Summers and Geithner is no surprise: They don't want to face a situation in which we pull out of short-term crisis but growth doesn't restart because interest rates shoot up. I don't know if they're right about all that, but it's not a surprising approach. 
