The economy has some major problems: a record number of homes are in foreclosure; the wealth gap is greater than at any time since the 1920s; banks still aren’t lending; and unemployment is stuck at 10 percent, creating the conditions for a deflationary spiral. These are all reasons enough to jolt the political system into action to provide a second stimulus to boost employment. But the jobs crisis is not what has Washington in a tizzy. Instead, the Beltway is going ballistic over a problem that has been blown way out of proportion—the deficit.

Here’s one instance in which the common sense of ordinary Americans should temper the establishment’s freakout. Just 4 percent of voters say that the deficit should be Congress’s number-one priority, far below jobs (56 percent) and healthcare (14 percent). In fact, what Washington calls The Deficit Crisis! is really two separate issues related to jobs and healthcare. The first is a short-term deficit created by a combination of factors: George W. Bush’s tax cuts; his multitrillion-dollar wars; his boondoggle with Big Pharma, Medicare Part D; the recession; and temporary stimulus spending under President Obama to alleviate the recession. The second is the threat of a long-term deficit brought about almost entirely by rising healthcare costs, which could double Medicare payments as a share of GDP by 2035 if—and it’s a big if—healthcare laws remain in their current form.

Instead of dealing with these issues separately and soberly, the chairs of Obama’s bipartisan Commission on Fiscal Responsibility—Erskine Bowles and Alan Simpson—mashed them together, which had the effect of sending Washington into a full-blown deficit panic attack. Their prescribed treatment for the malady they’ve diagnosed is to amputate parts of the government, slashing Medicare and other programs, freezing government wages and downsizing the federal workforce. For good measure, deficit hawks have thrown Social Security into the mix, even though Social Security payments go up by only 1 percent of GDP by 2030, a one-time bump easily addressed by tiny modifications to taxes and benefits.

A reality-based deficit commission would have noted that at about 10 percent of GDP, the short-term deficit is modest compared with World War II levels and that bringing it down to reasonable levels is quick work. Some combination of cuts to the military, tax increases on corporations and the rich, and small cuts to discretionary spending would do it. Getting the economy going again is most important; economic growth means greater tax revenue, which is why smart short-term stimulus is deficit reduction—and why panicky austerity measures are the last thing the economy needs right now.

As for the long-term deficit, the issue is really a matter of healthcare policy, one that recent legislation tried, but did too little, to fix. But by framing the issue as a deficit crisis, fiscal conservatives implant the notion that there’s nothing more to be done with healthcare reform (hello? single-payer?) and that the only solution is to cut Medicare. This does nothing to control healthcare costs, but it does unload the burden onto the private sector.

Thankfully, these recommendations are not final; the handful of progressives on board could amend them before they reach Congress (see Representative Jan Schakowsky’s much more sensible plan). But progressives should also challenge the premise of this debate. Deficit hysteria is just a pretext for ideological and class warfare by "bipartisan" means. Let’s not dignify it with our participation.