A friend recently emailed (the subject line reading “Krugman has won”) me the following:

I’m not going to buy into the premise that you can spend your way out of trouble. You have to pay it back someday.

With this link to a Henry Blodget blog post titled The Economic Argument is Over — And Paul Krugman Won.

Here’s my reply:

The idea is that government borrowing and spending, resulting in consumption, fuels growth — yet nothing could be further from the truth. Consumption, by itself, is the opposite of growth: Without producing something first in order to earn the income to fund consumption, consumption is a net destroyer of wealth.

The problem with some hardcore free-market types is that they make the discrediting mistake of predicting things like (per the article) “countries would be beset by hyper-inflation, as bond investors suddenly freaked out and demanded higher interest rates”, then look like fools when that doesn’t materialize (I reside with the higher interest rates, but not the hyperinflation, fools). Blodget and others of his ilk love to point to Japan’s decades of low interest rates, in the midst of massive debt, as evidence that the naysayers got it all wrong. When in reality the naysayers were simply saying the wrong nay: Japan’s decades-long moribund economy is evidence enough of the consequences of heavy indebtedness.

As for those who predicted calamity here at home; they clearly, to this point, have under-appreciated the grit of American businessfolk. Which is evidently strong enough to overcome the pernicious effects of ever-growing government.