Symptoms versus the Disease

The Patient is Cured! - by GastevMy grandfather, a epidemiologist and medical doctor, was suspicious of medicine that addressed the symptom rather than the underlying malady.  He didn't appreciate a treatment that made you feel better, even if it didn't cure you.  I don't share his fealty to purity in treatment.  If the symptoms are what makes life unbearable, then minimizing the symptoms is real progress, even if a magical cure would be the best of all worlds.  Unfortunately, it seems many commentators want to cure the economy rather than deal with its symptoms.  

Unemployment is the excruciating pain of a bad economy and right now we've got two years of agony with no end in sight.  Yet, many focus on cutting the deficit- which would certainly have the effect of prolonging high unemployment since reduced government spending would come out of already reduced economic demand.  In the long run the deficit and debt have to be addressed, because it is a requirement of good government and even a moral issue, but to do it now would cut into GDP growth and cause more pain.  Worse, trying to cut spending now might very well have the opposite effect of shrinking the deficit since the current recession actually exacerbates the deficit by shrinking the tax base while automatic stabilizers like food stamps, welfare and unemployment insurance all treat more and cost more during a recession.  In other words, trying to reduce the deficit right now is like proscribing a really robust course of chemotherapy to a weak patient: is the operation a success if the patient dies in the process?

A better course would be to put the economy on steroids with further government stimulus, hopefully with promised chemotherapy later in the form of scheduled spending cuts and increased revenues.  Robust growth is the only pleasant way to manage debt, so returning the economy to something like normalcy before bringing fresh pain is the proper diagnosis, further confirmed by the notable absence of the warning signs against new government spending.  Traditionally either high interest rates on fresh debt- which signals that the market does not have faith in the state's ability to repay- or inflation- which shows that the demand in the economy is overstripping supply- are the flashing red lights ahead of a course of government stimulus.  Instead, interest rates and inflation are both incredibly low and there is idle capacity waiting for new demand.  Ezra Klein describes how a fiscal conservative with a eye to the future could craft a deal:

If a Republican or two released a proposal pairing $300 billion in immediate, serious stimulus with $600 billion in even semi-balanced cuts timed to take effect between 2013 and 2020, they could either get what they're asking for or put the Democrats in a very difficult position.

It seems unlikely that Republicans are going to agree to much of anything right now, but Democrats control every aspect of government so leaving it to hypothetical reasonable Republicans is cowardice.  If this is the right thing to do and it's the sort of thing that a Republican could get behind if the political calculus wasn't to oppose everything, then do it!  We need fresh stimulus to make us strong enough to handle future deficit reduction, that much is clear.  The rest is the bitter medicine of politics: nothing but  the talking cure and placebos.