This week the White House hosted a “jobs summit” to brainstorm about the best ways to create more jobs in the U.S. economy. In opening the summit, President Obama touted the job-creating success of the “Recovery Act” passed earlier this year (citing this CBO report (.pdf) just released), but also cautioned that it doesn’t mean we can afford to keep repeating it. From the transcript (emphasis added):
PRESIDENT OBAMA: Now, let me be clear. I am open to every demonstrably good idea, and I want to take every responsible step to accelerate job creation. We also, though, have to face the fact that our resources are limited. When we walked in, there was an enormous fiscal gap between the money that is going out and the money coming in. The recession has made that worse because of fewer tax receipts and more demands made on government for things like unemployment insurance.
So we can’t make any ill-considered decisions right now, even with the best of intentions. We’re going to have to be surgical and we’re going to have to be creative. We’re going to have to be smart and strategic. We’ll need to look beyond the old standbys and fallbacks and come up with the best ideas that give us the biggest bang for the buck.
In an interview I did with NPR’s Scott Horsley prior to the summit, I said something similar – the basic point being that even if we need more deficit-financed stimulus, it’s still not true that just any old deficit spending will do. You see, we can’t afford to do stupid deficit-financed spending or tax cuts, because then the short-term (and even longer-term) benefit of the policy can’t possibly outweigh the cost of compounded interest. Which means we would be better off not doing it. So just because we may wish we had more jobs in this country, doesn’t mean we have an excuse to just throw more money out the door – certainly not when we seem to need the money for so many other things like expanded health care coverage, more troops in Afghanistan, and, oh yeah, saving for the future.