Krugman: Dems, Go Further Than Pay-As-You-Go

Paul Krugman says that now is not the time for the new Democratic-led Congress to worry more about paying down the deficit than using reclaimed revenue and rolled back tax cuts to fix broken programs like Medicare.

Suppose the Democrats can free up some money by fixing the Medicare drug program, by ending the Iraq war and/or clamping down on war profiteering, or by rolling back some of the Bush tax cuts. Should they use the reclaimed revenue to reduce the deficit, or spend it on other things?

The answer, I now think, is to spend the money — while taking great care to ensure that it is spent well, not squandered — and let the deficit be. By spending money well, Democrats can both improve Americans’ lives and, more broadly, offer a demonstration of the benefits of good government. Deficit reduction, on the other hand, might just end up playing into the hands of the next irresponsible president.