I have a new piece at The Hill, discussing the problem of unsustainable budget deficits:

Governments have little incentive to run budget surpluses and today seem to be ignoring even the more modest goal of keeping the deficit at sustainable levels.

The economics profession shoulders some of the blame for this situation. Many economists relied on dubious macroeconomic theories to advocate deficit spending during the past recession. This provided a cloak of respectability to large budget deficits.

When that sort of “fiscal stimulus” later became inappropriate — even according to the sort of Keynesian models that call for deficit spending when unemployment is high — it was difficult to get average people to understand why they should all of a sudden worry about budget deficits.

In contrast, some conservatives issued excessively alarmist warnings during earlier decades, when deficits were not at unsustainable levels:

As with the boy who cried wolf, the public is becoming numb to the constant warnings about a debt crisis.

Today, however, there really is reason to be concerned about the budget deficit.

For the first time in history, America is seeing its budget deficit rise dramatically higher during a period of peace and prosperity. While there have been even bigger deficits on occasion — measured as a share of GDP— they were always associated with a temporary situation such as war or high unemployment.

Just as I try to avoid being a perma-hawk or a perma-dove on monetary policy, I try to avoid constantly warning that any budget deficit is excessive, or going to the other extreme of claiming that deficits never matter.

Notice that the recent tax cuts are not paying for themselves with faster growth (and this is the optimistic forecast, assuming no recessions):