Paul Krugman: What's It All About Then?:
Simon Wren-Lewis writes with feeling about the “austerity deception“; what sets him off is a post that characterizes the whole austerity debate as being about “big-state” versus “small-state” people. Wren-Lewis’s point is that only one side of the debate saw it that way. Opponents of austerity in a depressed economy opposed it because they believed that this would worsen the depression--and they were right. Proponents of austerity, however, were lying about their motives. Strong words, but if you look at their recent reactions it becomes clear that all the claims about expansionary austerity, 90 percent cliffs and all that were just excuses for an agenda of dismantling the welfare state….
One interesting point which Wren-Lewis gets at… is that the austerity side… doesn’t seem to comprehend the notion that other people might actually argue in good faith. No time to do the link right now, but back when we were discussing stimulus many people on the right, economists like Lucas included, simply assumed that people like Christy Romer were making stuff up to serve a political agenda. And now I think we can see why they made this assumption--after all, that’s how they work.