Trillion-dollar deficits

The debate over the federal deficit has just entered scary, uncharted territory, said The Republican, a Massachusetts daily, in an editorial. President-elect Barack Obama and the new Congress will be talking about a lot of proposals to avert economic disaster—and many of the things they hope to do are worthwhile. But our leaders are now operating under the "very real cloud" of a projected $1 trillion deficit.

The economy is indeed "very sick," said The Washington Post in an editorial, as Obama put it as he warned that the tax cuts and public spending needed to avert disaster would make such huge deficits necessary for the foreseeable future. But at $775 billion over two years, Dr. Obama's cure represents a "massive and risky expansion of the federal debt," so Congress should proceed very, very cautiously.

That Congress plans to take until February to pass this massive new spending "constitutes a notable act of fiscal restraint in the Age of Obama," said Rich Lowry in National Review Online. Eventually, the stimulus will disappear and Americans will pay for Obama's big spending with higher taxes.

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Actually, said Martin Wolf in Financial Times, the real danger is that the stimulus proposed, at just 5.3 percent of GDP, won't be enough to shake the worst global financial crisis in seven decades. Running a vast U.S. budget deficit is a temporary but necessary move, but the U.S. can't "deliver a durable return to growth" without the world's help.