The basic argument is common sense. If your problem is too much debt, you won’t solve it by taking on more debt.
That is, of course, precisely what the U.S. government is doing.
Ferguson ends on this classic note from Churchill:
Americans, Churchill once remarked, will always do the right thing – after they have exhausted all the other alternatives. But if we are still waiting for Keynes to save us when Davos comes around next year, it may well be too late. Only a Great Restructuring can end the Great Repression. It needs to happen soon.
This is exactly my fear. We really won’t do the right thing until we are forced to and, by then, it will be too late. I know Obama’s people are aware of this. I just hope they plan to act on it.