Damon Linker, The Week:
For years Krugman justified massive spending with no concern for its long-term fiscal impact as an emergency measure demanded by high unemployment, anemic growth, and other after-effects of a “once-in-three-generations financial crisis.” We needed to do whatever it took to get the economy moving again, he argued; the fiscal mess could be cleaned up later, once we regained our economic footing. Until then, it would be “craven and irresponsible,” a sign of “intellectual laziness and a lack of moral courage,” to place concern for long-term problems like the budget deficit and national debt ahead of spending our way out of an economic sinkhole that was hurting tens of millions of Americans.
But what about now?
The unemployment rate is firmly below 6 percent. Growth is humming along at a decent clip. Based on the logic of Krugman’s arguments — which have always conceded that the deficit and debt, and our ability to fund entitlements, are genuine problems, just ones that couldn’t be addressed during the current crisis — one might conclude that now is the time to back off on the deficit spending, to try to bring the budget into balance, in part to assure that we’ll be well placed to spend liberally when the next recession hits.
But to judge from Krugman’s most recent column, nothing has changed, even with the economy taking off and debt hovering at levels not seen since the end of World War II. Conservatives are still sops for the ultrarich, and centrists are still foolishly focused on long-term fiscal concerns instead of the far more pressing problems of the present, which naturally demand yet more deficit spending.
Which brings me to my questions for Krugman: If deficit spending is required when we’re deep in a painful recession, and it’s also required when the economy is growing and creating jobs, when is deficit spending not required? When can it stop? What are the specific economic targets we need to meet before we can begin to readjust our budgeting, making it more sustainable in the long term?