Wednesday, June 1, 2011

A Quick Comment on the Debt Limit Statement of 150 Economists

Speaker of the House John Boehner issued a press release today announcing that 150 economists had signed a statement that legislation increasing the debt limit should be "accompanied" by significant spending cuts and budget reforms.  The statement, which consists of four sentences, manages to be repetitive; the last sentence is representative:  "An increase in the national debt limit that is not accompanied by significant spending cuts and budget reforms would harm private-sector job growth and represent a tremendous setback in the effort to deal with our national debt."

The economists who signed the statement appear to be more concerned about "our government's spending addiction" than the deficit, and the lack of any mention of taxes reinforces that impression.  The real problem with the statement, though, is that it is about political tactics, not economic policy.  After all, most economists do not have any particular expertise in political science or, more specifically, legislative strategy.  Why is it critical that debt limit legislation be the vehicle for their desired policy outcomes?

In any case, they may well be disappointed by the legislation increasing the debt limit.  They would be more credible if they argued the policy case for the spending cuts and budget reforms that they advocate, rather than giving the Speaker something to wave around as he negotiates with the Administration and tries to stave off the Tea Party influenced members of his caucus.

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