Matt Yglesias points to some new analysis by Center on Budget and Policy Priorities in light of the May jobs report. The basic point: "this is a very strange time to be focused on long-term budget issues."
Nearly two years after the economy technically turned the corner from recession to recovery, job growth was disappointing in May and unemployment remained high. At the same time, interest rates are very low (see chart), indicating that financial markets are far more concerned in the near term about a sluggish recovery than about deficits, debt, or inflation.
You wouldn’t know that from the current debate in Washington, which is focused largely on the size of budget cuts that must accompany legislation to raise the federal debt ceiling in order to secure the votes of enough members of Congress.
Because they are all trapped in what Greg Sargent calls the Beltway Deficit Feedback Loop, in which the "relentless bipartisan focus on the deficit convinces voters to be worried about it, which in turn leads lawmakers to spend still more time talking about it and less time talking about the economy."
Of course, Democrats don't particularly want to have to talk about the economy right now, because it frankly sucks. But not doing so, not challenging the deficit-peacockery, does nothing to change the narrative that Republicans have set, with a significant assist from the Village's Very Serious People. In that world, the deficit is the only thing that matter, while in the real world, we need some jobs.