Krugman and Klein on Budget Deficits

As a follow-up to my post on budget deficits, here's Paul Krugman's take on the deficit:

Let’s talk for a moment about budget reality. Contrary to what you often hear, the large deficit the federal government is running right now isn’t the result of runaway spending growth. Instead, well more than half of the deficit was caused by the ongoing economic crisis, which has led to a plunge in tax receipts, required federal bailouts of financial institutions, and been met — appropriately — with temporary measures to stimulate growth and support employment.

The point is that running big deficits in the face of the worst economic slump since the 1930s is actually the right thing to do. If anything, deficits should be bigger than they are because the government should be doing more than it is to create jobs.

And here's Ezra Klein:

Deficit fear-mongering was a core part of the Democrats' strategy against Bush, too. It just didn't work very well. The reason is that the public didn't care very much about deficits. Why? Well, they weren't very worried about the economy. But now they're terrified about the economy. And deficits -- which signify irresponsible money management to voters who think of things in terms of household finances rather than Keynesian counter-cyclical spending -- are evidence, to them, that the government isn't handling the economy correctly. The fact that deficits rise sharply during recessions simply confirms to voters that there's a connection.

Republicans are taking advantage of this misguided analysis, just as Democrats would happily have latched onto the sentiment if it had presented itself in the Bush years. But the driver here isn't Republican messaging but, on the one hand, anger over the economy, and on the other hand, the fact that the troubled economy needed a vast expansion in the short-term deficit. A bad economy isn't popular and big deficits aren't popular, and combining the two is seriously unpopular, even if it's necessary.