We were watching a debate on TV between a Tea Party economist and a more traditional Republican one. They were feuding over whether or not the Austrian economics of the Tea Party was better than the Supply-side economics of the Republican Party. Renee remarked they sounded less like economists debating and more like a husband and wife bickering over a divorce.
Austrian economics is the “tough love” school of economics, emphasizing the importance of a balanced budget over all other things. Supply-side economics is the “growth” school of economics, emphasizing the importance of lowering taxes over all other things.
Unlike religion, which provides guidance for most all situations on most all days, economics is not religion. It is more like situational ethics.
When the economy is dead, Keynesian economics (read: massive deficits) is appropriate. To repair the government, Austrian economics is appropriate. To rev up a stalling economy, Supply-side economics is appropriate.
Instead of debating which view of economics is “right”, the debate should have been which school is appropriate for right now. Last year, we needed Keynesian economics and got it. This year, we need Austrian economics and hope we get it, which means both tax increases and spending cuts, especially in entitlement programs like Social Security, Medicare, and Medicaid. Once we have healed the government, the tax increases will be stalling the economy, and it will then be time to implement Supply-side economics.
So, who “won” the debate between the two economists? Like divorce, they both lost . . . because they accepted their economic beliefs as religious beliefs, forgetting they are just situational ethics.