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I'm going to level with you: I don't have the first idea what to do with the deficit. On the one hand I hear the serious-sounding argument that we are flying into a fiscal disaster if we don't fix the deficit right away. On the other hand is another serious-sounding argument that, not only is the deficit not urgent, but deficit hawks could plunge us back into recession a la 1937. And on top of all this is the likelihood that nobody is going to take deficit reduction seriously, either now when the economy needs a boost or later when Democrats will be nervous to inflict fiscal "pain" before the 2010/'12 elections.

First, let's take a look at the deficit monster, courtesy of the New York Times and Richard David* Leonhardt's amazing, enormous graph. The lesson you learn as you scroll down the page is that, as Leonhardt writes, there are two basic truths about the deficit: That Obama is responsible for only "a sliver" of it and that we have no serious plan to climb out of it.

Of course you're going to find conservatives and libertarians barking at the deficit (and many for good reasons), but a more interesting aspect of this debate is the schism it's beginning to draw among moderates and liberals. Let's hear from each side of the debate. Here are some Deficit-is-a-real-problem folks:

Andrew Sullivan:
I don't blame Obama for failing to turn all this around in five months, and for running a debt this big right now. I will blame him if he does nothing serious to tackle this in the next year. That does not mean bromides about how healthcare reform will save us all money. It means serious cuts in defense, entitlements and corporate welfare (and perhaps a VAT or a serious gas tax).

Richard Leonhardt
This debt will constrain the country's choices for years and could end up doing serious economic damage if foreign lenders become unwilling to finance it.

And here are some Deficit-is-a-fake-problem-now folks:

Paul Krugman

The answer, I now think, is to spend the money -- while taking great care to ensure that it is spent well, not squandered -- and let the deficit be. Deficit reduction, on the other hand, might just end up playing into the hands of the next irresponsible president. In the long run, something will have to be done about the deficit. But given the state of our politics, now is not the time.

Katrina Vanden Heuvel
Meanwhile, the deficit hawks continue their damaging and alarmist talk of a federal debt that will soon be above 57 percent of GDP, or 82 percent of GDP by 2019. Just as we saw during the New Deal, there will be signs of recovery during which the deficit hawks will urge for spending cuts. In fact, after New Deal policies cut the unemployment rate from a peak of more than 25 percent to just over 10 percent in 1936, similar calls for fiscal restraint then led President Roosevelt to try to balance the budget. The result? The unemployment rate rose again in 1937 and 1938 and the country went back into a severe recession.

This is, remember, not a strictly political difference. I would be surprised to learn if all the featured writers above didn't vote for Obama. But there is a significant difference between thinking that the deficit monster is breathing down your neck or on some far away island, and it has the potential to create serious political differences as well.

Obama senses that, and that's why we're going to see the return of pay-as-you-go. PAYG essentially means that if Congress spends money in one place, it has to make it up in another so that we're not creating more debt. It's like carbon offsets, but for our budget, and it's a good way to level spending, but it's not going to bring the big orange arrows in Leonhardt's graph up to bold black even line.

How do you come out of a deficit? Tough question. We could have a technology revolution like the 1990s, but that's not likely. Health care reform could save billions of dollars, but that's nothing to bank on in the short term. Ultimately, I think Andrew's right that we could start thinking painfully, for the rich (cut corporate welfare reform) the old (cut entitlements) or the connected (cut defense). But the rich, old and connected are the people who run government or whom the government expects to vote. And Obama might be a revolutionary, but he's not a masochist. So more likely we'll continue to kick the can down the road. The deficit will continue to be the next next issue. And we'll see not the return, but the continuation of America's grand debt-payment tradition: Delay-as-you-go.

*Thanks AK.