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Karl W. Smith

The Return of Deficit Economics

Is it finally time to start worrying about how much the federal government is spending? 

Some familiar debates are coming back.

Some familiar debates are coming back.

Photographer: Sarah Silbiger/Bloomberg


Again and again over the past few years I’ve said that it was premature to worry about the deficit. In 2018 I argued there was no need to insist that President Donald Trump’s tax cuts be paid for. In 2021 I wrote that Congress needn’t skimp on a third round of pandemic relief.

I would now like to make an announcement: I am beginning to be worried about the deficit. High U.S. budget deficits are not a problem yet, but it’s quite possible they will be in the near future. Congress should be looking for ways to end both excess spending and unproductive tax breaks for higher-income Americans.