Robert Samuelson: the anti-Krugman

What makes Samuelson such a credible pundit on economic matters? Why does he succeed while Krugman fails so miserably? Answer: numbers, numbers, numbers. Today Samuelson takes on some myths about budget deficits:

Indeed, rising deficits are sometimes helpful. They are now. It is possible to dislike parts of President Bush's tax cuts -- and to see the White House's budget rhetoric as hypocritical -- but it is not possible to think that on balance these policies have hurt the economy. From fiscal 2000 to 2003, the budget has moved from a surplus of 2.4 percent of GDP to a deficit of 3.7 percent of GDP; the shift is worth about $650 billion annually. Tax cuts didn't cause all of this swing. Still, the massive stimulus helped offset the depressing effects of the stock market, Internet and telecom bubbles. Higher deficits didn't raise interest rates. In 2000, rates on 30-year mortgages averaged 7.5 percent; this year, they've been under 6 percent.

But the biggest misconception about deficits is that, by themselves, they threaten the economy's long-term vitality. Not true. The real threat is rising government spending. The reason is simple. Government spending must be paid for by either taxes or borrowing (a deficit). If spending rises too high, economic growth may suffer from either steeper taxes or heftier deficits. Spending is the real culprit. [Emphasis added]

Years! Percentages! Figures! A thesis, evidence, and a conclusion – so refreshing.