If you are a deficit hawk, well, ok. If you are a real one. But ask yourself: What if the deficit doubled tomorrow. As in, tomorrow morning. What would happen?
The answer is nothing.
The Deficit is just under $14T (just below the GDP). Debt service is about 3.5%, or, about $425B/year [source]. The Federal tax revenue will be about $2.1T this year [source]. So 1/4 of revenue is debt service. If the deficit were $28T tomorrow, the debt service would be about $850B/year.
These are big numbers of course. We must, and DeLong et. al. always say, get to pay-as-you-go government. (The repubs are notoriously (at least in Democrat land) bad at PAYGO).
But wait: In 2012, the Federal revenue will be just under $4T. So, all things being equal, we would grow into being able to service twice the debt and then some. Of course, all things aren't equal. Still...
The answer to all problems is growth. Growth can not happen with proposed Republican austerity plans.
The next time you meet a crypto deficit hawk, railing about how the deficit is going to put his grandchildren in the poor house, as him/her how they think their grandchildren will do when the deficit increases (as proposed by, eg, the tax breaks for the rich programs just announced) with no growth (the result of no stimulus and increased spending on the rich).
---The Recovering Republican (Bill)
Update: Naked Capitalism re-posts a thought-provoking article by Marshal Auerback which says much of the above is irrelevant: The tax code does not produce revenue. Rather, it establishes ways to shape the types of economy and society we may want. Obama should drop everything and re-invent the tax code to foster growth, as growth is the only thing that matters. He, uh, does not say specifically how to do that.