Early and Often

The most prominent serious economic case against using stimulus to fight the economic crisis — the Reinhart-Rogoff 90 Percent Threshold of Death — has collapsed ignominiously, leaving true believers in austerity grasping for some justification that isn’t based on simple data errors. Washington Post editorial writer Chuck Lane has a new nominee: James Buchanan, Nobel Prize–award-winning economist.

Lane concedes that stimulus can boost the economy in the short run. But there may be a cost. Buchanan’s work, he explains, found “deficit spending is very easy to turn on and very hard to turn off.” Politicians like giving their voters lower taxes and better services, and don’t like giving them the reverse. A short-term stimulus can become a long-term deficit increase. So the real debate is whether stimulus is worth the risk of morphing into permanent deficits. It’s not that the austerians are wrong, he says, they just care more about the long term:

The Obama presidency has been a golden era for right-wing kookery. Many aspects of this kookery, like gold fetishism or threats to default on the national debt, are simply too esoteric to filter into the general public and haven’t hurt the party’s image. Where Republicans have suffered damage is when their kook beliefs wander into the terrain of social issues, which hinge less on specialized knowledge, and the nuttiness is apparent to all. They keep throwing away winnable elections in this manner, and they may be about to do it again in Virginia.