At least that's how the U.K. press frames it. It's Krugman v. Ferguson (again), but as a summary of an important debate it could be worse. Frankly, I think they're both right in a way. The difference is less about true substance and more about time horizons, which could be expected when an economist and historian lock horns. Here's the nut:
“What they are really arguing about is whether we should exit quickly from the policy that has been taken up,” said Stephen Lewis, a veteran City economist with Monument Securities. “Even Krugman would agree that you cannot carry on building up public debt forever. Ferguson’s point is that we should be looking for the exit right now.”
In that, he is far from alone. Warren Buffett, the world’s richest man, was warning last week of the dangers of what he called, with his skill for a pithy phrase, “greenback emissions” — the vast accumulation of public debt that risks turning America into a “banana republic”.
Much more at the link (including juicy insinuations!), and this is not just a debate for the U.S., but rather for most of the industrialized world. It's a good read for getting a frame of the underlying issues even if the personalities are in the way. I have little doubt that Krugman is right about the short-run necessities, but I share Ferguson's concern for the medium- to long-run, and a historian's input is valid for discussing that time frame.
And frankly, I think the accusations of racism directed at Ferguson by Krugman, Fallows, and many others in the left-ish commentariat are disgraceful, and I was happy when Henry Louis Gates and others said so. I respect Krugman and Fallows quite a lot, but every analogy need not be over-thought or overwrought, and impugning character is no substitute for engaging in debate. Even if Ferguson's comparison of Obama to Felix the Cat (both are black, yes, but that wasn't really the point, nor was the observation meant to be derogatory) was a clumsy intro to an op-ed, it certainly exhibited no racist intent. (To be fair, Coates had a different reaction than Gates, although I'm not really sure how much that matters; this fire was fanned by several white guys after all).
So yeah: deficits, depressions, banana states, academic egos, the fate of the global economic system, and accusations of racism! What could be more titillating than that?