Issue of the week: Is it time to tame the soaring deficit?

The bill is coming due, and it’s going to be a doozy, said Edmund Andrews in The New York Times. Since the financial crisis struck

in 2008, the U.S. government has borrowed trillions to stabilize the banking system and stimulate the economy. As a result, the federal budget deficit has swelled to $1.4 trillion, and the national debt stands at a staggering $12 trillion. Until now, interest payments on that debt have remained relatively modest, at $202 billion this year, thanks to the Federal Reserve’s success at holding down both short- and long-term interest rates. But that can’t last. By 2019, the White House says, interest on the national debt will explode, reaching $700 billion or more annually. Faced with a potential interest bill “that would total more than the combined federal budgets this year for education, energy, homeland security, and the wars in Afghanistan and Iraq,” a consensus is growing in Washington for an all-out effort to shrink the budget deficit.

“Americans are stuck with a budgetary conundrum,” said The Economist. Unwilling to give up costly entitlements like Social Security and Medicare, they’re also reluctant to pay higher taxes to fund them. But taxes will inevitably have to rise. Not immediately, to be sure—though aggressive government spending to stimulate the economy “should be maintained for as long as it is needed.” But by announcing “a credible plan” now to reduce the budget deficit in future years, the Obama administration and Congress could reassure taxpayers—as well as overseas creditors—that they’re serious about mopping up all that red ink. Without such a plan, nervous creditors will eventually demand that the U.S. pay higher interest rates, and businesses will have trouble borrowing at any price.

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That’s already happening, said George Melloan in The Wall Street Journal. While the Treasury has borrowed $7 trillion this year, bank lending to businesses has fallen by $392 billion from the year before. And why shouldn’t bankers turn away from their traditional business of making loans to entrepreneurs? It’s so much easier to buy risk-free Treasury debt paying 3 percent a year than to figure out which businesses can be trusted with credit. This state of affairs can’t continue indefinitely. “Feeding the government and starving free enterprise is a prescription for economic stagnation.”

True, “piling up more government debt is undesirable and involves risk,” said William Greider in The Nation. But the Obama administration runs a far greater risk if it stops “force-feeding recovery” too soon. With tens of millions of Americans out of work, the economy is in a mess “that only the federal government can repair, by borrowing tons of money and spending it.” It’s possible that Obama might spook the nation’s creditors by steering that course, said Paul Krugman in The New York Times. But “that risk must be set against the certainty of mass suffering if we don’t do more.” So go ahead, Mr. President: Borrow—and spend—until the economy gets back on its feet.