HOOVERVILLE:

I was not the fiercest of deficit hawks, not a hard-money type or an inflation-panicker. But as a non-economist staring at Congressional Budget Office projections and at examples of fiscal crisis from Greece to California, it seemed reasonable to make deficit cutting a near-term priority from 2010 onward, to offset the surge of Great Recession spending with a period of belt-tightening.

But now I think this reasonable view was wrong. Not completely, in the sense that many of the deficit-reducing policies I supported -- means-testing entitlement programs, eliminating tax breaks for the wealthy and upper middle class -- I still support, because I think the money involved is presently misspent. But I was wrong in the priority that I gave the deficit relative to other issues, wrong to discern a looming "fiscal precipice," wrong in some of the criticism I leveled at both George W. Bush and Barack Obama for failing to care enough about balancing the nation's books.

The best time to make deficit reduction a priority is when the inflation rate and the bond market give you some indication that you are headed for a dangerous inflationary spiral. Such indicators were conspicuously absent eight years ago, but many people I talked to (including people in the Obama White House) argued that it was important to reduce deficits pre-emptively, because the spiraling could happen too quickly for policymakers to effectively respond. At that point I believed them; now I think they had overlearned lessons from the 1970s that did not apply in 2010.

Instead, in hindsight the most important economic argument of the early Obama years was between two schools of thought that agreed we should put more money into the economy and only disagreed about how to do it -- the Keynesians who wanted massive government spending and the market monetarists who favored looser monetary policy. Today, both sides of that debate look far better than the strict fiscal and monetary hawks, and the endless arguments about Bowles-Simpson look like an interesting exercise that did not deserve so much swarming attention from politicians and the press.

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