Is deficit commission wrong? Critics say there's no national debt crisis.
President Obama's deficit commission says the national debt requires urgent action. But economists are split on that basic premise.
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But is that premise true?
It's actually a matter of sharp debate among economists, with some prominent Nobel Prize winners arguing for higher federal deficits – as a means of stimulating economic growth – rather than for quick steps on deficit reduction. Even Federal Reserve Chairman Ben Bernanke appears sympathetic to this position.
This view, of course, is politically at odds with the public mood of deficit anxiety that helped to sweep Republicans into greater power in elections a month ago.
But it could gain some traction in Washington due to weak job-market numbers released Friday. Unemployment rose to 9.8 percent nationwide, as the private sector added a lower-than-expected 50,000 jobs in November, the Labor Department said.
Whoever is right, the debate over stimulus and debt reduction is important at a time when Congress is grappling with these issues.
Lawmakers will soon consider the fiscal commission's blueprint on national debt and they are already in talks regarding stimulative fiscal policies such as extending both the Bush tax cuts and benefits for the unemployed.
Here are the contrarian voices, arguing that stimulus should be the bigger priority:
"We don't have a recovery" in the economy right now, says Joseph Stiglitz, a Nobel winner from Columbia University. He argues that, for practical purposes, the US is still in a recession – growing too weakly to create strong job growth.
"We have to intervene," he said in a telephone interview a few weeks ago, spelling out arguments from his book "Freefall."
Mr. Stiglitz said that, with consumers weakened by high debt and unemployment, government needs to step in with a large new stimulus effort. Secondly, he says a more effective program of relief for borrowers at risk of foreclosure would help to put consumer spending back on track.
Similarly, Nobel winner Robert Solow of the Massachusetts Institute of Technology argues in the academic journal Daedalus that pursuing deficit reduction now "seems at best perverse, and in sufficient force, a suicidal recipe for renewed and protracted economic downturn."