The Debate Over the Cause of the Debt and Evolution

Dean Baker says yet again what, sadly, needs saying yet again.

The Debate Over the Cause of the Debt and Evolution

The NYT had an article discussing President Obama’s plan to set up a commission to propose recommendations for reducing the deficit. At one point the article refers to the debate: “over the nation’s rising debt and its causes and solutions.”

There really is not much basis for debate over the cause of the debt. The debt has grown rapidly in the last two years because of the recession created by the collapse of the housing bubble. The debt would be much lower today if the deficit hawks had not been dominating public debate and distracting attention from the housing bubble in the years when it was growing to dangerous levels.

Over the longer term, the deficits are projected to be unsustainable due to the growth of health care costs in the United States. Since the United States pays for more than half of its health care through public programs like Medicare and Medicaid the failure to fix the health care system will also lead to serious budget problems.

As with evolution, there really is not much room for debate on the factors driving the deficit (the big rise in military spending also was an important factor in the deficits). It is misleading to imply that there is.

—Dean Baker

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