James Fallows has a very good article on our trade deficit with China in the Atlantic monthly that I’ve been recommending for a week now. If there’s an issue that suggests to me that I need to reconsider my political outlook, it’s sitting in the middle of the second page, where he relates that America’s annual savings rate has hovered near zero percent, often below zero.
I also suspect that the low national savings rates interact with the issue of budget deficits. I’m can’t get myself into the mindset where deficits are a huge evil, but when the government is hemorrhaging money, and the American people aren’t the ones lending it, that strikes me as worrisome.
Politically, this is obnoxious since in spite of all the rhetoric that’s been going on in the past few years, the Republicans are still more fiscally responsible. While the things the democrats want to spend money on (healthcare, etc) strike me as better than the Republicans’ priorities (endless war, irresponsible tax cuts, etc), that doesn’t change the fact that budget deficits would probably be larger under any of the three primary Democrats.
On this note, I found an old post by Megan McArdle on fiscal responsibility. I particularly like her explanation of how budget policy is not the sort of thing you should ever yell about, no matter how much you care.
Of course, I only made it through intro econ and a semester of macro, so veritas cum grano salis. In particular, I don’t know how to weight fiscal responsibility against the possibility that we’re headed into a recession–that’s not generally the time to worry about a budget deficit.