Brad DeLong takes aim at deficit scolds:

In general, if there are worries about the debt you see them in (a) interest rates right now or (b) expected debt escalation in the near term. If you do not dare talk about interest rates and have to look 30 years in the future to produce a scarce debt escalation number, you are a bullshit artist.

And at the Peterson Foundation in particular:

A more honest Peterson Foundation would say: if the ACA [a.k.a. Obamacare] does not succeed in keeping health-care costs from exploding, we will have a big problem, but if it does not so much–we will know in a decade and should be ready now to do whatever is needed then.

There’s the thing.  We will know in a decade and we need to be prepared to deal with it then.  Our immediate problem is unemployment and underemployment.  If we fix those problems and the ACA has its intended effect* then we’ll be on our way to fixing the deficit issue.

The economy has a demand-side problem.  Implementing aggressive fiscal policy, i.e., enacting a temporary increase in Government spending on infrastructure, procurements, etc., to stimulate demand could plausibly put the country on a path to a healthier economy.  I find the arguments in favor very plausible and, as far as I can tell, aggressive fiscal policy is the only plausible path to healthier economy.  (DeLong addresses Government spending effects in the current climate here.  He and former Treasury Secretary Summers get into the gory details here.  And DeLong does so again here.)  One side effect of a temporary increase in Government spending would be an increase in the deficit in the near term.   It is what it is.   The potential benefits of said policy outweigh the penalties for doing nothing or, worse yet, implementing austerity measures.

We know from Europe’s experiment that austerity measures in a demand-starved economy are a disaster.  (Look here and here for more detail, including the IMF’s acknowledgment that their endorsement of austerity turned out to be entirely wrong-headed.)  So austerity measures all but guarantee failure, is another stimulus package sure to be a success?  No.  Unfortunately, when Action A results in failure, doing the opposite of A does not guarantee success.  But are there better ideas out there?  Nevermind better, are there even any other plausible ideas in circulation?  Not as far as I can tell.  As DeLong and Summers and Krugman and many others have argued, the downside risk in adopting more aggressive fiscal policy now is minimal.  The upside potential is significant.  Go for it.

* No, I’m not holding my breath that the ACA will work as intended but I’m not presuming failure either.   See how things pan out and make course corrections as necessary.

UPDATE:  Krugman’s column today, Looking for Mr. Goodpain, addresses the austerians desperate search for evidence that austerity works.