Socrates Meets Deficit Neutrality
Mankiw tries his hand at Socratic dialog. It begins:
Friend: I am going to take off a few days from work and fly down to Bermuda for a quick vacation.
You: But isn’t that expensive? Won’t that just add to your growing debts?
Friend: Yes, it is expensive. But my plan is
deficit-neutral. I have decided to give up that half-caf, extra-shot
caramel macchiato I order at Starbucks twice every day. I really don’t
need that expensive drink. And if I give it up for the next three
years, it will pay for my Bermuda trip.
You: Well, then, how are you going to solve the problem of your growing debts?
Friend: I am going to figure that out as soon as I return from Bermuda.
Bonus: Mankiw, unlike Socrates, isn’t afraid to break voice at the end of the exchange to make sure that we get the point:
Even if you believe that the spending cuts and tax increases in the
bill make it deficit-neutral, the legislation will still make solving
the problem of the fiscal imbalance harder, because it will use up some
of the easier ways to close the shortfall.