I just wanted to flesh out a point I hinted at in my TNRtv segment yesterday but didn't get to elaborate on. My sense of the political relationship between unemployment and the deficit is as follows: Unemployment can be fairly high, but as long as it stays below some critical level, most people will think of it as something that mostly affects/threatens someone else. As a result, many will be as or more concerned about deficit-spending. Their basic calculus will be: Why should we run up enormous amounts of debt helping other people. This, I suspect, is a big reason the number of people who say they're most concerned about the deficit has been gaining on the number of people who say they're most concerned about unemployment/the economy in public opinion polls (scroll down to question 23 in that poll I linked to).
But at some point, unemployment presumably crosses a psychological threshold, wherein most people begin to see it as something that threatens them, too. And my hunch is that it's kind of a knife-edge proposition--or, rather, that the number of such people gradually rises in line with the unemployment rate than balloons once it crosses a certain rate. I have no idea where that threshold is--10 percent? 11 percent? 12 percent? But, if and when we cross it, I think you're going to see concern about unemployment diverge pretty sharply from concern about the deficit.
If you're Obama, I guess the problem is that you want to prevent us from getting to that point. But, if you're successful, then those pesky deficit concerns stick around. It's not very comforting to know that you suddenly won't have to worry about the deficit (politically) if/when unemployment is persistently in double-digits.
Update: Matt Yglesias offers a refinement/simplification of my theory, which I mostly endorse:
When someone loses their job, that usually has a negative impact on that person’s entire household. But most people are fine. But as the number of jobless rises, the circle of people negatively impacted by unemployment grows. Eventually, it grows to encompass a huge number of people and you reach a political tipping point.
Which is to say, it's not so much that the number of people concerned about job losses rises in tandem with the unemployment rate then suddenly balloons (in a nonlinear way). It's that the slope of the line plotting concern about unemployment is slightly greater than the slope of the rising unemployment rate itself. At lower levels of unemployment, the divergence between the two lines isn't that great. But as you go farther out, the gap starts to get pretty wide.
Actually, I think reality is probably some mix of these two hypotheses--partly just two lines with differnent slopes, and partly that the slope of the "concern about unemployment" line actually changes once you cross a certain point, as media preoccupation and mass psychology kick in. Kind of the real economy version of a panic.