It shouldn't be, anyway. Tyler Cowen says: "These cyclically adjusted measures are useful information and should not be discarded, but I don’t wish to use them as the sole or main or dominant source of information about the stance of fiscal policy." I'm going to make a stronger claim. One I have made before.

Are deficits good or bad? That depends. Sometimes they are good, and sometimes they are bad. But even when deficits are good, don't use bad arguments to defend them. It really annoys me. First as an economist, because it's bad economics. Second, as a (Canadian, but whatever) citizen. Because we want governments to run deficits […]

For wonks. And for Andy Harless, who encouraged me to do something like this. Yep, there's still a burden on future generations, even with unemployment [update: if future taxes are increased as a result of current fiscal deficits]. Assume people live 2 periods. Lifetime utility is: U = Log(consumption when young) + [(1/(1+n)]Log(consumption when old). […]

Because aggregating across people alive at a particular time is not the same as aggregating across time periods in the lifetimes of a particular cohort of people. (See JP Koning on the Borges Problem  or Scott Sumner). [Update: or does Noah get my point? because later on in the comments to his post he says: […]

Suppose you wanted to take milk away from people on the east coast, and give it to people on the west coast. But you don't have any way of transporting the milk quickly enough to stop it spoiling before it gets from one coast to the other. Here's how you do it: You take milk […]