It’s Almost Time to Boost the Economy. Almost.

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Ben Bernanke told Congress today that the long-term deficit is indeed a problem, but it’s a problem for the long term. The best way to address it is to combine future budget tightening with present-day budget loosening, which will boost the economy and produce lower deficits in future years:

Bernanke raised concerns that a sharp, immediate push to reduce the deficit could harm the recovery in the upcoming months. In January 2013, he pointed out, the Bush tax cuts will expire, and the major spending reductions triggered by the Budget Control Act will take effect, absent any further action by Congress. As a result, “there will be sharp change in fiscal stance of the federal government. Without compensating action, it would indeed slow the recovery,” Bernanke told the committee members.

However, Sen. Pete Sessions (R-Ala.), the highest-ranking Republican on the committee, pressed Bernanke to answer whether the country’s current deficit was itself holding back the recovery and discouraging key market players. “They’re not reacting to the current level of debt. What they’re attentive to is the process,” Bernanke said, pointing to the political dysfunction that led to the Standard & Poor’s downgrade of the US credit rating last year.

Roger that. But it’s still a little too early, I think. If Congress takes action right now, it risks having an effect this year, thus helping President Obama. Better to wait until summer, when a sudden conversion to Keynesian pump priming will be timed perfectly to help the economy in early 2013, when a Republican might inhabit the Oval Office. Timing is everything in politics, after all.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America will move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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