Conservative Economists to Deficit Hawks: Put a Sock in It, for Now

Contrary to the opinion of our South Dakota House Republicans and some crotchety conservatives in D.C., the stimulus act really is "important, useful, and beneficial" for our fair state and the whole country. Jim Bunning be darned, extending unemployment benefits really is a good idea:

Almost every economist agrees that these benefits do, indeed, stimulate the economy by putting money into the hands of people likely to spend that money immediately [Matthew Blake, "Unemployment Benefits Are Economic Stimulus," Understanding Government, 2010.03.09].

Economists think that? Really?

Yes, even the conservative ones:

Few observers, for example, would accuse David M. Walker of being a liberal spendthrift. Indeed, the former U.S. comptroller general has spent most of the last decade forging a personal crusade against deficit spending. Yet last week — on the same day that Bunning, a Hall of Fame baseball pitcher known more for his curveball than his economic insights, initiated his drive against fiscal imprudence — Walker wrote in Politico that “a focus on jobs now is consistent with addressing our deficit problems ahead.”

“A huge recession can yield a huge deficit,” Walker, now head of the Peter G. Peterson Foundation, which advocates for balanced budgets, wrote in an op-ed co-authored by Lawrence Mishel, president of the liberal Economic Policy Institute. “Though a concern, most of the recent short-term rise in the deficit is understandable. Furthermore, public spending can help compensate for the fall in private spending, and help stem the pain of substantial job losses.”

Mark Zandi, chief economist at Moody’s Economy.com, agrees. Zandi, an adviser to Sen. John McCain during the Arizona Republican’s 2008 run at the White House, has urged lawmakers in recent weeks “to be aggressive” in tackling the continuing jobs crisis, which has left nearly a fifth of the nation’s working population without a job or underemployed.

“If we have another recession, we will have no policy response,” Zandi told a House panel last week. “We have to err on the side of doing too much.”

The message from the experts is clear: If you think adding $10 billion to the deficit is dangerous to future economic growth, wait ‘til you see what happens when millions of unemployed folks, denied access to a government safety net, slash their consumption (at best) and foreclose on their homes (at worst) [Mike Lillis, "GOP’s Deficit Crusade Faces Opposition From Fiscal Hawks," Washington Independent, 2010.03.04].

Now maybe you still think the stimulus package and unemployment benefits are bad. Maybe you think we should throw the brake and stop all deficit spending. Go ahead, candidates (R. Blake? Kristi?), advocate that... and also advocate up front driving us right back into a recession that will outlast anyone's term limits in the South Dakota Legislature.