When William Easterly agrees with Jeffrey Sachs, there are two possible reasons.
[1) Jeffrey Sachs is unusually right, or
2) William Easterly is unusually wrong.
Unfortunately in this case, Easterly is unusually wrong.
From the article:
Nobel-prize winning economist Paul Krugman isn’t paying enough attention to growing U.S. government debt as he promotes deficit spending, Columbia University professor Jeffrey Sachs said.
“Krugman has staked out a rather crude Keynesian position and unrelentingly so,” Sachs said today.
Krugman “knows one thing, which is stimulus, stimulus, stimulus and expand deficit spending.”
Krugman has “under-emphasized the risks of growing debt, he’s over-asserted what we really know about the effects of these policies and he has underestimated the long-term need for public-sector change and reform,” Sachs said.
But it is all about stimulus (both fiscal and monetary). It is all about too much savings and not enough spending. And as long as there is a massive savings glut and interest rates are stuck at zero, federal government debt doesn’t matter. It really doesn’t.
Tell your friends.