Mow the Grass or Put Out the House Fire?

To make up for my struggle to complete everything I needed to at the end of last week (for those of you who didn't notice, I did not have my usual Thursday / Friday post), I decided to include a "bonus" post this week. Pretty much everything I have been following in the realm of economics over the past week and a half has had to do with budget deficits and national debt; for my third paper, I researched and wrote about the significance of budget deficits in determining the overall economic stability of the United States and, as all of you know, our recent class discussions have centered around the ongoing debt crisis in Greece.

Continuing in that vein and fresh off of my research endeavors, I thought some of you might be interested in what the actual significance of deficits in the US is. Additionally, you might be able to use some of the information to draw comparisons to Greece. So...a quick overview: there are two dominant sides in the budget deficit debate. One side, the more conservative, harps on large deficit statistics, strongly advocates for a balanced budget, and fears leaving a legacy of debt to the future (our) generation. The more liberal side views deficits as a secondary indicator of progress, claiming that they take a backseat to more pertinent economic issues, such as high unemployment, foreclosures, and elevated personal indebtedness. Dean Baker wrote that focusing on the deficit projections for the future is like fussing over the yard not being mown when the house is on fire.

What conclusions can we draw (and I know I only gave you a tiny bit of background, but I will link some articles you can read if you are interested)? Basically, the US can still afford to take on debt and not have its economic stability suffer. Deficits are not irrelevant and they shouldn't be left unchecked. But they should also not be viewed out of context. When you consider the broader economic needs we are still facing because of the 2008 crisis, I tend to side with the liberals and say "let's focus on fixing our economy, then worry about cutting down the deficit." Because a strong economy will enable us to do that more efficiently. A strong economy will benefit everyone!

For those of you have been intrigued by my ramblings and wish to read more, here is a great overview about the debt ceiling/deficit debate/debt issues, etc. from The New York Times:

http://topics.nytimes.com/top/reference/timestopics/subjects/f/federal_budget_us/index.html?scp=1&sq=budget%20deficits&st=cse

And here is a great article from Dean Baker that I used for my paper (really fun read!):

http://www.huffingtonpost.com/dean-baker/budget-deficits-and-blow_b_179261.html

Happy reading! Feel free to comment and ask questions. I will follow-up in my post at the end of the week.