The Good, Bad, And Ugly Of Brooks’s 'Moderate Manifesto' - William Galston

Brooks' critique is fiscal, ideological, and moral--so let's cover the fiscal aspects first. While he does not object to deficit spending designed to counter a steep economic downturn, he won't accept annual deficits of more than $1 trillion stretching "as far as the eye can see." Although this number is considerably more pessimistic than the administration's numbers, it may well be more accurate. In a recent analysis, Brookings' William Gale and UC Berkeley's Alan Auerbach conclude that "under what we view as optimistic assumptions, the deficit is projected to average at least $1 trillion per year for the 10 years after 2009, even if the economy returns to full employment and the stimulus package is allowed to expire in two years." In their view, the longer-run picture is even bleaker: Stabilizing the debt/GDP ratio would require us to close a fiscal gap at between seven and nine percent of GDP, between $1 trillion and $1.3 trillion in current dollars.

The Good, Bad, And Ugly Of Brooks’s 'Moderate Manifesto' - William Galston