Deficit spending is politically advantageous.

You know the Trump era is over when Democrats and Republicans are yapping over issues like the federal debt and the annual deficit.

Welcome back! If Biden’s unofficial campaign slogan was Make Politics Boring Again, he was successful.

Debt and deficit talk is once again all the rage in America. Hell, even John Oliver is devoting a segment to it. Unfortunately, I’m seeing the same, widely held (and incorrect) assumptions about the debt being propagated by some in the media.

Let’s get into my views, of which some are heterodox.

1. Running up deficits is politically advantageous for the party in power.

(Short term, anyway.)

Take Jan Hatzius, the chief economist at Goldman Sachs, for example. In a letter to clients before the election, he conceded that a potential Biden administration (and a Democratic sweep of both Congressional chambers) would result in “tax increases on corporations and upper-income earners.”

Sounds bad, right? Not exactly.

He writes:

All else equal, such a blue wave would likely prompt us to upgrade our forecasts. The reason is that it would sharply raise the probability of a fiscal stimulus package of at least $2 trillion shortly after the presidential inauguration on January 20, followed by longer-term spending increases on infrastructure, climate, health care and education…

Yes, the chief economist of a top financial firm — the type of firm that would push for such measures as free trade and flat taxes — believes that Democratic control of government (and subsequent tax increases) would be a net-good for the economy.

The reason is the deficit. Running a deficit is stimulatory. Borrowing money to pump into the economy exerts an uplifting effect for every sector.

2. Republicans don’t care about the deficit.

GOP campaigns like they worry about the deficit, then govern like they don’t. “Fiscal conservatism” isn’t a sincerely held, principled position, but a politically held, sinister one. Republicans only feign interest in the deficit when they are in the governing minority.

If Republicans care so much about the deficit, why did they permit former President Trump to run up historic deficits? Even the pre-pandemic deficits far exceeded Obama’s.