American history scholar Ezra Klein displays his vast knowledge of economics in the pages of the latest Newsweek:
Most economists don’t think we should start cutting spending until 2012. The recovery is simply too weak, the labor market too fragile, and businesses too restrained in their hiring for the government to slash spending on goods, services, and workers. Eventually the private sector will take up the slack so that Washington can focus on deficit reduction and debating whether to subsidize National Public Radio. But until then, the government needs to keep supporting the recovery.
That’s why the budget hawks—the people who worry most about the deficit—have all proposed holding off on deficit reduction until 2012. This was the position of both the president’s fiscal commission and the widely respected Bipartisan Policy Center. Stimulus now, cuts in a year or two.
Well, no. Had Klein slipped the word “Keynesian” in between “most” and “economists,” he would have been on more solid ground.
That’s because the Keynesians are wrong about the virtues of stimulus, as Roy Cordato has explained for us in the past.
