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Mar 25 / Jonathan

Budget Deficits and Blow Up Dolls: It’s the Economy Stupid!

A note on budget deficits from Dean Baker. FIrst put out the fire; then mow the lawn.

Budget Deficits and Blow Up Dolls: It’s the Economy Stupid!

04DEA21E-3941-43D4-B20B-026857CC942B.jpgIn the movie Lars and the Real Girl, the main character imagines that a female blow-up doll is his fiancée. To humor Lars, his brother and sister-in-law go along with the charade. Over the course of the movie, more people are drawn into the circle, until eventually the whole town is treating Bianca the blow-up doll as one of its leading citizens. …

People are losing their homes through foreclosures at the rate of more than 100,000 a month. The default rates on credit cards, car loans and other debt is at record levels. Most of our major banks are effectively insolvent.

Home and stock prices have plummeted, destroying most of the wealth of the baby boom cohort as they stand on the edge of retirement. The economy is shedding almost 700,000 jobs a month, with the unemployment rate rapidly approaching the highest level since the Great Depression.

In this context we are supposed to be up in arms over the deficit projections for 2013 or 2019? This is a bit like someone complaining about the lawn not being mowed at a time when the house is on fire, it’s just not the first priority. And the media all seem to go along with the charade — yes, they are very concerned about the projected deficit for 2013, just as the characters in the movie expressed concern about the health of Bianca the blow-up doll. …

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