Deinonychus antirrhopus

See, 4% of GDP is big because he can hang the problem on Republicans (never mind that we got here after decades of Democratic control of Congress where the spending occurs), whereas 7% of GDP is small because he can hang the problem on Republicans, after all, we're evil and want to push old people's wheelchairs off cliffs.

I don't see a contradiction here, he's still hanging the problem on Republicans.

But wait a minute. I know I have seen on "right wing blogs" (using broad labels), the argument that the trillions dollar deficit isn't significant because it only represents 5% of GDP, and that is certainly sustainable given our economy.

So, what I'd like to understand (sincerely): is 4,5 or 7% of the GDP significant? And if so, does it depend on what the expenditure is for (i.e., deficit as opposed to SS, per se)?

Sorry, I'm not very well grounded in economics, so it is hard for me to understand the nuances of these arguments.

I guess the question is, when is a deficit not a deficit, and when does 5% of GDP matter, and when doesn't it?

(BTW, I don't read Drum, so I am not addressing the substance of your post, i.e., his inconsistency.)

cj,

First let me say I just woke up so if I don't do a great job here forgive (and I might edit and/or add to this later).

Second if you look at this post of mine you'll see I do take the long term budget imbalances fairly seriousl. If our long term budget imbalance was pretty good I'd not care about the short term fluctuations as much. They'd still be important, but occassionally running a deficit during certain times is not unusual. Think of one of the greatest Presidents for those on the Left FDR. He ran deficits every year he was President (okay there might have been a year or two in there where he didn't), and during his terms in the 1940's they were extremely large deficits.

Deficits at 4-5% forever is not good, IMO (eventaully the interest will become the sole component of government spending--i.e., its unsustainable). Even short term deficits will have negative impacts, but also positive ones. The problems with Social Security and Medicare fall into the catagory of increasing the deficit by x% for as far as the eye can see (actually its worse in that it isn't just x%, but xt% where t is a year and generally speaking xt% > xt-s%). Our current long term problems are mainly a result of this, not the Bush tax cuts. Repealing them will not solve that problem.

FWIW, Steve, the amazing "bad only when one side does it" thing is not limited to Drum.

Paul Kennedy, in his book "The Rise and Fall of the Great Powers," excoriates the Reagan-Bush folks for spending ~5% of GDP on defense, at the time he wrote the book (what, about 1990?). This was in the second-to-last chapter or so. In his CONCLUDING chapter, a few dozen pages later, he praises the Chinese for their sensible approach to defense, which entails spending, you guessed it, ~5% of GDP on defense.

Leaving aside the issue of how much China actually spends on defense, at the time, several colleagues and I found it amusing that what the Chinese were doing on a far smaller economy (and worse, smaller human capital base) was intelligent, whereas what we were doing was obviously foolish. Never mind, btw, that his other examples of empires run amuck (e.g., Spain) had spent far more, as percentage of GDP, on "defense" (or what we would call it today).