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Answering Debt Questions At Presidential Debate, Obama 'Paying The Price' For Earlier Mistakes

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To no one's surprise, much of Wednesday night's debate focused on the country's trillion dollar deficit.

The Republicans and some Democrats have harped on it for as long as President Barack Obama has been in the White House, and Obama has largely bought into the premise that the deficit is a negative. He continued to do so Wednesday night, despite the efforts of economists who promote more progressive Democratic policies to convince him otherwise.

"We all know that we've got to do more," Obama said when asked about his plans to balance the budget.

But that made more than a few economists cringe. Dean Baker, the co-founder of the Center for Economic Policy and Research, described this outlook as "bad policy and horrible politics."

If economists like Baker, and Nobel Prize-winning economics professor Paul Krugman had their way, Obama might have answered the deficit questions more like this: "Let's not worry about the deficit for now. What we need to worry about is creating more jobs. You can't create jobs without spending money to boost the economy, and you can't spend money in a bad economy without accumulating debt. A big deficit is unavoidable, and furthermore, it's a sign that we're getting the economy back on track. We'll worry about it a few years from now, when the economy is strong and we actually have enough money to pay it off."

Instead Obama said this: "I worked with Democrats and Republicans to cut $1 trillion out of our discretionary domestic budget. That's the largest cut in the discretionary domestic budget since Dwight Eisenhower. Now, we all know that we've got to do more. And so I've put forward a specific $4 trillion deficit-reduction plan."

Not only did this statement vex economists who say that he shouldn't be reducing the deficit in the first place, it failed to pass muster with fact-checkers. Jon Karl, an ABC correspondent, called the plan "mostly fiction."

So if talking about this stuff is bad policy and bad politics, and if gets you in trouble with fact-checkers, why do it?

According to Baker, Obama might not have had much choice.

"President Obama is paying a price for never having bothered to tell the public the truth about the nature of the downturn. We have a weak economy because the housing bubble collapsed," said Baker in a note to HuffPost and Politico "The collapse cost us $700 billion in annual construction demand and $500 billion in annual consumption demand, for a total shortfall in private sector demand of $1.2 trillion."

"The fact that almost no one understands these basic facts, including many of the reporters covering the campaign is largely President Obama's fault since he has not explained them to the public," he added. "This failure made his job last night much more difficult and it will continue to be a problem throughout the campaign since it will allow Governor Romney to hold him responsible for both the weakness of the economy and the deficit."

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