Saturday, February 2, 2013

Paul Kruger Argues US Deficet Can Be Reduced By Lower Unemployment

In the debate over fiscal policy, you frequently hear liberals argue: "It's not time to deal with the deficit, we need to fix the economy first and then fix the deficit when the economy is stronger." While this has merit as a political concept, it's actually giving into a false frame that dealing with the deficit and dealing with unemployment are two separate things that you do at different times. Steps you take to improve unemployment are deficit reduction measures ... While the government has done, technically, nothing to address the deficit in the last few years, the deficit is shrinking (relative to GDP) merely because the economy has improved, and more people are going back to work. If unemployment drops to 7 percent, or 6.5 percent, or 6 percent, we'll get quite a bit of deficit reduction then.
www.huffingtonpost.com

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