"The budget deficit is a gradually-developing problem that needs to be addressed over the next few decades, Prof. Blinder says. Exceptional 9.2% unemployment is holding back the economy now.
He notes that, despite the growing debt and the political crisis in Washington, financial markets remain happy to lend the U.S. Treasury money at exceptionally low rates.
'So does that tell you it’s an emergency, that the market is about to cut us off from credit? No. Where we have an emergency is unemployment,' he says.
Unemployment isn’t just a social issue; it holds down growth, he notes: 'It’s bad for people; it’s bad for business; it’s bad for the financial markets. It’s bad for everything.'"