The economist David Beckworth and I have argued for a combination of spending cuts and a monetary policy that stabilizes the long-term path of nominal spending. Writing in the Washington Post the other day, Mike Konczal, seconded by Paul Krugman in the New York Times, argued that our views have been tried and have been failing. The latest economic-growth number, he notes, was weak.
Policy has moved a little bit of the way in the right direction since the 2011 article of ours that Konczal quotes–but only a little bit, as Beckworth notes in response. But what’s strange about Konczal’s criticism, as both Scott Sumner and David Henderson note, is that that disappointing economic-growth number was nonetheless an improvement over the growth rates before the recent round of “austerity.” (Sumner also did another post on the double standards Krugman is using.) I don’t think the latest growth number is strong evidence for the arguments Beckworth and I made about the primacy of monetary policy, but it is certainly not evidence against them.