Here's a quick primer on the difference between "Keynesians," who want to spend money to get the economy going, and "austerians" (a little play of words of "Austrians," an anti-Keynesian school of economics), who insist that we need to cut back, belt-tighten, and stop racking up debt. In the video, Henry Blodget of Business Insider sits down with Niall Ferguson, a Harvard professor and historian who hasn't just taken up a strongly anti-Keynesian stance since the financial crisis but has also argued that America's about to go down the imperial drain, and fast.
Ferguson's performance is masterful in its bet-hedging. For example, he wants to find a ceiling for U.S. borrowing — but the debate we had earlier this year about...the ceiling for U.S. borrowing displeased him.
Anyway, you get the idea. He's not in agreement with New York Times columnist and Nobel-winning economist Paul Krugman. Krugman and Ferguson have actually knocked heads at the same event, with Ferguson repeating his argument that markers for U.S. debt are OK "until they aren't," maintaining that the big risk for the USA is a loss of investor confidence. Krugman, for his part, insists that the multi-billion post-financial-crisis stimulus bill wasn't big enough.
This debate has been going on forever. But this time around the stakes are higher than ever before. So what do you think? Spend? Or cut? Krugman? Or Ferguson?