Former Treasury Secretary Larry Summers and former Fed chairman Ben Bernanke said last week at a Brookings Institution forum that we definitely do not need to cut the federal deficit right now and ought instead to run it up.
These elite economic thinkers made a case that deficit-reduction would destroy the precarious economy at the moment. They contended there's no better time than this one of zero-range borrowing rates to take on more debt, no matter how much debt you have already.
I remember Dick Cheney saying that Ronald Reagan proved that deficits don't matter.
I remember Bill Clinton thinking he'd done something in the '90s by producing a surplus.
That was before this occasion of what some call negative-number interest rates, accounting long-term for inflation.
I can hear the Republicans now. They'll say, aha, behold: Liberals gain back the presidency and immediately start talking about borrow-and-spend sprees, no matter that Republicans have been on their own such spree and silent on deficits for four years.
Summers was an Obama administration Treasury secretary. More interestingly, Bernanke was an economic adviser to Republican President George W. Bush, who made him Fed chairman. Then Barack Obama reappointed him.
Alas, bipartisan economic agreement at this high level likely won't matter. We are at a low level in America.
Mitch McConnell said in 2009 that his purpose in life was to sabotage Obama's presidency. I suspect that will be his purpose with Joe Biden's as well.
All of this must play out amid debate over Biden's mandate.
Was it to go Keynesian and demand-side to spend us to prosperity? Or was it to do only a few practical and incremental things, such as fighting the virus more effectively and targeting a new round of virus-related economic relief?
I think it was the latter--that the centrist bipartisan alliance of U.S. Sens. Mark Warner, Joe Manchin, Mitt Romney and Susan Collins that emerged last week on virus relief is the voter-responsive way to go.
But I would root for the Biden administration if it attempted to embrace the former.
Summers and Bernanke offered similar arguments, beginning with the observation that, as late as the early 20-teens, the conventional wisdom remained that America needed to cut its unsustainable budget deficit.
But, as Summers observed, it would have been "catastrophic" to cut the deficit over the last dozen years during the rebuilding from the mortgage meltdown.
He said we need to stop measuring the direness of the debt by assessing it as a percentage of gross domestic product.
At these interest rates, at least, we should measure it, he said, as a percentage of multiple years of GDP, since the federal government could borrow money today and lock in paying 0.8 percent on that money for a decade and reap the benefits of the ratcheted-up economy, the GDP, during that decade.
That sounds remarkably similar to those old supply-side arguments beginning in the Reagan era that cutting income taxes should be factored into budget projections by "dynamic scoring" that considers the growth the cuts would stimulate.
Maybe it was true then. Maybe it's true now. Maybe debt could bring the left and right together if only they'd let it.
Bernanke concurred more reservedly, saying only that now is no time to draw the deficit down and thus constrain the virus-damaged economy. To the contrary, he said, this would be a good time to run up the deficit to spend on health care, climate reform and infrastructure.
If time indeed is wasting on finding ways to help people in fossil-fuel jobs begin to move to renewable resources, then there would not be a better foreseeable time than now for the federal government to subsidize that effort with interest rates this low.
If indeed time is wasting on fortifying our bridges to keep them from collapsing, then there would not be a better foreseeable time than now for the federal government to borrow and spend for that.
If indeed time is wasting on making health care more affordable and steering its availability toward universality, then there would not be a better time than now for the federal government to put more money into that.
Meanwhile, Summers dealt with the effect on the federal budget of Social Security by saying there is emerging demographic relief and an easy-enough mathematical solution if it comes to that.
The demographic remedy is that abundant baby boomers now in the Social Security-recipient phase are ... well, they're beginning to pass on and will be mostly departed before too very long. (Demographic relief is a nice way to put that.) The available mathematical fix, if we really need it, is simply to apply Social Security taxes to higher levels of income.
At any rate, isn't it nice after four years to ponder policy and arithmetic rather than obsess on the ravings of a mad megalomaniac?
America will get better as the commentary becomes more substantive.
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John Brummett, whose column appears regularly in the Arkansas Democrat-Gazette, is a member of the Arkansas Writers' Hall of Fame. Email him at [email protected]. Read his @johnbrummett Twitter feed.