Growth and the Myth of the Deficit
Most of the nationÛªs establishment economists think the federal budget deficit is the root cause of all of the economyÛªs troubles. But they havenÛªt convinced one of their colleagues, Robert Eisner, professor of economics at Northwestern University.</br></br>To the contrary, EisnerÛÓa past president of the American Economic AssociationÛÓsays, deficit spending is what keeps the economy goingÛÓespecially now, when business and consumer demand is lagging.</br></br>EisnerÛªs philosophyÛÓthat there are bigger things to worry about than budget deficitsÛÓmay prove a handy rationale for whoever sits in the White House next Jan. 20.</br></br>Despite the Perot-led budget-balancing bandwagon, it now seems probable that the next president will be forced to postpone deficit-cutting for at least a year and turn attention instead to pump-priming a weak economy.</br></br>In an interview after Perot got back in the presidential race, Eisner said that anxiety about the budget deficit is misplaced. Instead, he argues, we should be worried about the deficits in jobs, health care, adequate housing and our educational system: ÛÏMy point essentially is that the [budget] deficit is completely misunderstood. Most people literally donÛªt know what theyÛªre talking about.Û