Losingest Trade of 2010 Proposed by Arnold Kling...: Tuesday Hoisted from (Other People's) Archives from Four Years Ago
Four years ago:
The Keynesians are certain that deficit spending is contributing much to short-term economic performance, and they are uncertain that it is contributing much to long-term fiscal instability. The Rogoffians are certain that deficit spending is contributing much to long-term fiscal instability, and they are uncertain that it is contributing much to short-term economic performance. I am to the right of the Rogoffians. That is, the U.S. fiscal stimulus is so poorly designed that I doubt that it is contributing anything positive to short-term economic performance. And, given the outlook for Medicare (stare at the table), we cannot afford to be casual about deficits.... Part of me wishes that folks like Brad DeLong and Paul Krugman could be forced to put their money where their mouths are and sell credit default swaps on U.S. government debt. My advice to everyone else would be to take the other side of that trade.
How is that working out for him?
Note: no policy changes since 2010 with any long-run spending and tax oomph except for the Arnold Kling-hated ACA.
And note that the Rogoffians never said that current deficit spending is contributing much to long-term fiscal instability--the Rogoffians were, IIRC, on balance opposed to short-run fiscal contraction, although much in favor (as was I) of putting long-run policies of fiscal restraint in stone...
