Deficits short-term vs long-term & the health care disconnect

by: Paul Rosenberg
Sun Jun 13, 2010 at 12:00

Last weekend, Brad DeLong had an illuminating little post correcting the sloppy thinking of Henry Blodget at Business Insider.

Trying to position himself "in the middle" between Keynesian expansionists and so-called "deficit hawks", Blodget complained that:

we don't think Krugman has yet offered a persuasive explanation for how we're going to climb out of the gigantic debt and spending hole we're digging without serious future pain.

To which DeLong responded:

Two observations:

1.We are not going to get out of our long-run health-care spending overcommitments without serious future pain. The pain--in the sense of severe spending cuts relative to baseline or tax increases--is already baked into the cake.