Paul Krugman continues to point out that the media's obsessions with deficits is completely overblown:
Right now, deficit-phobia has quickly congealed into the latest CW. You
can see it in editorials (not from the Times, I’m happy to say, but
almost everywhere else), in what the talking heads say, even in
supposedly objective news reporting. Not a day goes by without my
reading some assertion that “markets are anxious/jittery/worried about
the deficit” — an assertion based on no evidence whatsoever. (Long-term
interest rates on US debt are near historic lows; CDS spreads show no concern about default.)
I've stated this before, but deficits are a concern of the rich and powerful because it gives them an excuse to slash spending on poor people. It's funny how deficits weren't a problem when rushing off to invade the Middle East and giving giant tax cuts to billionaires. In fact, the entire ethos of conservative economics (at least recently) has been the use of debt to fund growth, so why everyone seems to be so anxious about it now is beyond me.
Excessive debt is always a problem, but in the midst of a gigantic recession, history has shown that government spending is the only way to climb out of the hole. We can worry about deficits when the framework of the economy has been rebuilt -- at least then we'll have the infrastructure to make the money back.