The most important issue affecting the American economy and this November’s mid-term elections is jobs. The administration has been desperately trying to increase jobs and lower unemployment. The one tool it has most directly deployed is stimulus spending, i.e., big deficits.
Economists disagree strongly on the effects of the previous $787 billion stimulus, and whether additional stimulus would help or harm the economy. The two camps are well defined.
Prominent members of the “big stimulus” camp include Nobel prize winners Paul Krugman and Joe Stiglitz. They are joined by such outspoken economists as Brad DeLong, Alan Blinder, and the Financial Times Martin Wolf. The “deficit reduction” camp includes Nobel winner Vernon Smith, Niall Ferguson, Ken Rogoff, John Taylor and Jean-Claude Trichet. (Apologies to other prominent economists and universities omitted; the two camps are meant to be illustrative.) We might call the first Princeton-Berkeley and the other Harvard-Stanford. These universities have top-flight graduate programs in economics (ranking 1, 3, 5, 6 in the U.S. News list).