Stephen Moore of the Wall Street Journal editorial page, simultaneously reporting and propagating the Republican line du jour, accuses President Obama of a fiscal flip-flop:
Republicans plan to hammer the debt and deficit hypocrisy theme in the days and weeks ahead. White House economic adviser Larry Summers has lectured Congressional Democrats that now is a good time for the federal government to borrow to "stimulate demand" because interest rates are low. Yet the President keeps insisting that fiscal responsibility is an important priority of the White House. Republicans are having a field day. A recent email blast reminded supporters of a statement made by President Obama on November 18th: "It is important though to recognize if we keep on adding to the debt, even in the midst of this recession, that at some point, people could lose confidence in the U.S. economy in a way that could actually cause a double dip recession."
Fiscal schizophrenia reigns in the White House.
Okay, let's go back and read what Obama said last November 18th:
There may be some tax provisions that can encourage businesses to hire sooner rather than sitting on the sidelines; so, we're taking a look at those. I think it is important though to recognize that if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the US economy in a way that could actually lead to a double-dip recession.
And so one of the trickiest things we're doing right now, is to on the one hand make sure the recovery is supported and not withdraw a lot of money either with tax increases or big spending cuts - and states, for example, need a lot of support to keep hiring teachers and so forth - at the same time, making sure that we're setting up a pathway longterm for deficit reduction.
Got that? Obama was saying the same thing he's saying now. In the short run, we have an economic crisis that requires deficits. In the long-run, we'll need to reduce the deficit. (And the long-term costs of temporary stimulus are pretty low.) Indeed, taking steps that increase long-term deficits could actually hurt in the short run. These are not contradictory ideas. Indeed, in his November interview, Obama endorsed the very notion (helping states mitigate budget cuts for teachers and other things) that he's pushing for right now.
Moore and the Republicans think it's "hypocrisy" to be for high deficits during a liquidity crisis but against them during a recovery. Really. The whole Republican message is based on not understanding this distinction.