And at The New Republic, Noam Scheiber, with good reason, harkens back to some reporting he did on the possibility of a spending freeze back in early December.
These same liberals and wonks rejoiced when Obama backed job creation. But there is a logic to Orszag’s gambit, which runs roughly as follows: It’s almost certain that Congress will pass, and the president will sign, a jobs bill early next year, probably in the neighborhood of $100 billion to $200 billion. Given that, and given the difficulty of doing anything about the long-term deficit next year, the administration needs some signal to U.S. bondholders that it takes the deficit seriously. Just not so seriously that it undercuts the extra stimulus.
Hmm. All about that bond market? That’s something we’d like to read more about, please. It also seems worth pointing out, as few have, that this Obama spending freeze plan firmly places the “Change” president in the “highly conventional” camp. This is about as radical as a “WIN” button.
Oh, and one more thing. This Journal headline on a follow-up story says
Budget Deficit to Reach $1.35 Trillion for 2010
But the story is about the new CBO projections mentioned above, lowering previous estimates.
Plus, according to the Journal’s own chart accompanying the story, the deficit is projected to continue to go down further, after falling from 2009 in 2010.
We understand, as the Journal says, “The CBO estimate is almost certainly an understatement of the long-term problem,” and things are expected to get worse for a lot of reasons explained in the story.
But the news here is the lower CBO projection.
So, saying the deficit will “reach” $1.35 trillion on this particular story is a bit of, um, a reach.