The US should grow the deficit, not shrink it

The US economy is too fragile to reduce spending and raise taxes. Fiscal austerity is a recipe for worse pain.

Dean Baker
guardian.co.uk, Friday 8 February 2013 10.39 EST

There is an astounding level of confusion surrounding the current US deficit. There are three irrefutable facts about the deficits:

First, the United States has large deficits because the collapse of the housing bubble sank the economy.

Second, if we had smaller deficits the main result would be slower growth and higher unemployment.

Third, large projected long-term deficits are the result of a broken health care system, not reckless government "entitlement" programs.