Ezra Klein: Unemployment may be at 9.7%, but the Senate is moving on

Unemployment may be at 9.7%, but the Senate is moving on

Or, at the least, they care about the deficit more. By a vote of 52 to 45, the Senate rejected a jobs package that would've extended unemployment insurance, offered some tax breaks to individuals and businesses, kept doctors in the Medicare program and more. "$77 billion or more of this is not paid for," said Sen. Ben Nelson, "and that translates into deficit spending and adding to the debt, and the American people are right: We've got to stop doing that."

No, sir, they're wrong, and we don't.pi] It's hard to say this loudly enough, but it really doesn't make sense to offset stimulus spending, at least in the short term. The point of the money is to get the economy moving faster, to give people cash to spend. This isn't like health-care reform, where you're purchasing something and you should pay for it. When you're trying to expand the economy, you need to use debt to put more money into it than would otherwise be there. If you're just moving a dollar from one purpose to another, you may be using that dollar better, but you're not expanding the total amount of demand in the economy by very much. You're just moving it around. It would be like bailing water from a boat, but throwing it into another part of the boat.

There'll come a time when we need to start reducing the deficit. If we can get the economy back into gear, that time might even be soon. But for now, increasing the size of the deficit isn't some nasty side effect of stimulus spending. It is, quite literally, the point of the enterprise.

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