Orszag the Deficit Hawk

From today’s WSJ:

Peter Orszag brought to the White House sterling credentials as a deficit foe. But he will leave next month with the U.S. debt stuck above $1 trillion.

Debt, deficit, whatever!

The funny thing is that deficits are always secondary concern to spending more for all Democrats and most Republicans. As the economy has always been below its potential in real time (not hindsight), this implies that spending money now via the magic of the multiplier generates huge payoffs (if deficit financed they pay for themselves via the multiplier, if tax-financed through righteous redistribution of ill-gotten gains). While this is a common priority, it is telling that no politician would state this belief so flatly.

Orszag also co-authored (with Joe Stiglitz) the famous 2002 article asserting Fannie and Freddie’s expected losses were ‘effectively zero’.

But, he’s got all the credentials and connections. So what if he’s wrong about the big things, what’s important is that he’s articulate and has the singular confabulatory powers of current cutting edge economics. I’m sure he’ll be a prize for any large bureaucracy.

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