In interest of intellectual humility, some confessions

Every year at this time I join a growing number of journalistic flagellants in enumerating things that I got wrong in the previous annum’s worth of columns.

When I started the practice, the annual audit sometimes felt a little bit too scrupulous, like picking nits with my own work. But the past two years have been different: As Donald Trump’s ascent turned all sorts of supposed wisdom into folly, I’ve found myself with a great deal of mistaken analysis to acknowledge and live down.

Focusing on Trump again would reveal the limits of this yearly format, because the Trump era is not even close to over yet, and year-overyear developments are generally the wrong way to assess a presidency’s impact and the predictions that preceded it.

Now is a good time for intellectual humility, and for reserving judgment on an administration whose ultimate effects on domestic tranquility and the Pax Americana remain uncertain.

Instead, in the spirit of the longer view, I want to use this confessional column to reach back to the early Obama years, and the arguments I made then that assumed the urgency of deficit reduction, the pressing need for honest liberals to champion major tax increases and for honest conservatives to go all-in for major entitlement reform.

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.

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.

There are always real limits on what government spending or tax cuts can accomplish and how far they can go. A society only has so much productive capacity, dumb tax cuts can be hoarded and dumb spending used to enrich special interests or subsidize social pathology, and too much spending can eventually induce inflation.

But those limits are not established by an arbitrary deficit target. Instead, a rich and powerful country with a stable government and control over its own currency (which is to say, not a prisoner of the euro) should be willing to live with a loose fiscal policy when wage growth is disappointing and inflation low, and it should debate tax and spending changes on their own terms — will this money be put to good use? — rather than pursuing a balanced budget for its own sake.

That low-inflation, slowgrowth context prevailed under Obama; to a lesser extent it still prevails today. There will doubtless come a time when deficit scolds make essential arguments, but of late they haven’t — and when I was one of them, I now believe, I was making a mistake.