Via Ezra Klein I read
Collender thinks this is wrong for two reasons. First, the Democrats with the most difficult reelection battles are the freshmen elected in Republican-leaning, fiscally conservative districts. They’ll need something to show for their time in Washington, and along with the Blue Dogs, they may well be able to get it.
Is there any evidence for this claim ? Is there any evidence that people in Republican leaning districts care more about the deficit than people in Democratic leaning districts ? The past decade didn’t provide much evidence that Republicans are, in fact, fiscally conservative.
Note that the Blue Dogs addition to health care reform — increasing the power of the medicare advisory panel — has become a favorite topic for opponents of health care reform.
I think that Collender is mislead by the absurd theory that the political actions of blue dogs have something to do with the wishes of their constituents. I think it has been conclusively proven that this hypothesis is false.
On economics (hey we are supposed to be economists) Collander and, it seems, Klein also worries that deficits will reduce GNP “Second, and arguably more importantly, the markets are increasingly nervous about the size of our long-term deficits, and without credible action to reduce them, interest rates could rise, choking off the recovery.” Guys we are in a liquidity trap. If interest rates increase, the FED can drive them down. Deficits cause lower GNP when the FED refuses to do that, because they are fighting inflation and or punishing congress. It’s not relevant to next year. You might want to look at a blog by this guy named Paul Krugman.