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Democrats are joining Dick Cheney in predicting that "deficits don't matter."

Back when Dick was spending the dough with this argument, liberals and Democrats ridiculed it.

Actually Dick was making the opposite argument, the same mistake that idiot George Osborne is making.

Cheney was arguing that if the economy is doing well, which was at the time relatively speaking, then deficits don't matter because you have all this money coming in. So spend away, it doesn't matter.

Osborne is saying that because the economy is weak they don't have much money so they need to be cutting back.

Both those approaches are the exact wrong thing to do.

When times are good, that's the time the government should be looking for ways reduce obligations, eliminate redundancies, maybe raise taxes to reduce debt all of that. Because when times are bad, the government can borrow money to pick up unused capacity in the economy and it is much harder to do that if there is a big structural deficit. It is called countercycling. It is on the first mid-term of Econ 101.

Unfortunately, too many politicians are more worried about being ideologically pure than making correct decisions. But as the article points out we will have some textbook examples of the exact wrong thing to do, so politicians in the future can ignore those as well.
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