Paul Krugman continues to make a persuasive case that cutting stimulus spending now to reduce future debt levels will not only be ineffective, but stupid.

As we've noted, we still don't think Krugman has adequately explained how we're going to get out from under our long-term debt mountain without a decade or two of pain--and we'd like to hear him address that in detail. But his case on the ineffectiveness of cutting the stimulus now is compelling:

Rereading my post on the folly of the G20, it seems to me that I didn’t fully convey just how crazy the demand for fiscal austerity now now now really is.

The key thing you need to realize is that eliminating stimulus spending, while it would inflict severe economic harm, would do almost nothing to reduce future debt problems. Here’s the IMF’s estimate of sources of the growth in debt over the next few years:

IMF

And even this figure conveys a misleading impression of the importance of stimulus spending...

Keep reading at the NYT >

See Also: Our Questions For Paul Krugman, Brad DeLong, Niall Ferguson, and the Tea Party