Politico's Jeanne Cummings puts some meat today on a point I tried to make last week, which is that if the economy is so weak it needs another round of stimulus, the deficit isn't a legitimate argument against enacting it. The reason is that an underperforming economy is pretty likely to create deficits that are larger than the cost of the stimulus.
As Cummings reports:
The White House projected revenues for 2012 are forecast at $3.1 trillion. But if growth is just 2 percent, rather than around 4 percent, as some economists now expect, that income would hover around $2.4 trillion — adding another $700 billion to the projected deficit of $581 billion.
“That would be a significant change in the deficit,” said [former Bush economic adviser J.D.] Foster, who did the math.
You can argue that the economy doesn't need more stimulus (though I'd disagree). And you can argue that another round of stimulus wouldn't be effective (again, I'd quibble with you). But you can't just point to the deficit and say we can't afford it. That makes no sense.
Update: See my thoughts in comments for why this isn't the mirror-image of conservative arguments in favor of self-funding supply-side tax cuts.
Update II: Paul Krugman kind of hits on the point I mention below in this item. Especially: "[T]he big factor causing a high multiplier in Eichenbaum et al is the possibility of a deflationary spiral, which fiscal policy helps avoid." That's basically what I had in mind (though I haven't read the paper he's refering to).