I was a bit surprised to see that in his column a day or so ago he had become skeptical of federal deficits where he had been proposing a debt-financed infrastructure spending program last October. What accounts for the change in his views?
It could be that Fed actions since October have convinced him that additional debt is no longer economically justificable. It could be that he believes the distributional effects of debt-financed tax cuts are different from debt-financed infrastructure spending. If he’d produce evidence for that, he’d be performing a real public service.
It might be that in his column rather than giving bad economic advice he’s giving bad political advice. In that case I’d really like to know when he stopped being an economist and starting being a political pundit? Last week? October? When he started writing his column in the New York Times?
Just for the record I don’t believe the protestations over the American Recovery and Reinvestment Act (the “stimulus”) for a second. IMO the hoocoodanode defense is balderdash. I think that Larry Summers and the other administration economists knew precisely what they were doing when they lent their degrees to support the White House’s political judgment that an $800 billion stimulus was all that the Democratic Congress would tolerate.
Is the “he” you are talking about Paul Krugman?
Two ironies, he too was awarded a Nobel Prize like the current President. Krugman’s contribution to economics since being awarded the Nobel is about as good as the Presidents contribution to peace.
Second irony, Krugman is just following his idol Keynes quote, “When the Facts Change, I Change My Mind. What Do You Do, Sir?”. Just that the changing fact occurred on Nov 8th!