Debt versus Stimulus

Since I was a very young woman, I have been a foe of federal debt.  My commencement speech from 1966 was titled "The Future :  Can We Afford it?".   Returning to academic economics in the 21st century, I am faced with texts based on Keynesian theory, which I find quite persuasive.  When I was in college and grad school, the schools I attended were proponents of Monetary but not Fiscal Policies.

Recently I have been perplexed about the current recession.  When I show the "Boom and Bust Rap" to my students, there are always nods to both Keynesian and Austrian points being made.

Today, as I read Robert Samuelson's editorial in the Washington Post, I find something to help me reconcile my seemingly conflicting points of view.

Samuelson believes its the misuse of Keynesian theory that has led us to the quagmire we find ourselves in today.  Keynesian stimulus and monetary manipulation/policy must be saved for that rainy day when it is most needed.  Deficit spending should be the exception, not the rule.  Samuelson believes and I agree that Keynes' prescription for government action to protect the economy from massive recession has been hijacked to provide something for nothing in democracies where this offer wins votes!

It is time to try to right these wrongs.  However, in the middle of a weak economic recovery this could be suicide.  The big question is:  When is the right time and will politicians be willing to do the unpopular job of reducing the Federal Deficit?