...because I'm posting a little reminder from Matthew Yglesias as well:
One of the ironies of Washington is that the people who spend the most time talking about the budget deficit often have very little practical understanding of it. One example comes from my friend Dave Weigel’s interview with Delaware Senator Chris Coons, who’s positioning himself as a leading budget hawk:
“The framework that was laid out by the deficit commission, while I don’t agree with everything they did, shows the direction I think we need to go in terms of scope,” said Coons. “If we simply look at the 12 percent of the budget that’s non-discretionary spending, we’re never going to get there. I think we need to be doing the large work.” (...)
“Why do you think 3 percent of GDP is a sustainable deficit?” asked Coons.“Don’t we need to get to a balanced budget, in order to get to the point where we’re tackling the debt?”
The answer is that, no, you actually don’t need to get to a balanced budget in order to tackle the debt. The country’s debt is becoming less burdensome, which is to say any time GDP is growing faster than the debt. If debt growth is zero (balanced budget) or negative (surplus) that usually means fairly rapid debt-shrinkage. But given positive economic growth, modest budget deficits are completely consistent with reductions in the debt burden.
This is another thing that is good to keep in mind when listening to the budget peacocks talking about how the little people need to sacrifice in order to balance the budget (because raising taxes on people who can afford to pay them will supposedly wreck the economy entirely).