Krugman debunks all of the "Stop spending!" deficit hawk shriekery.
This conventional wisdom isn’t based on either evidence or careful analysis. Instead, it rests on what we might charitably call sheer speculation, and less charitably call figments of the policy elite’s imagination — specifically, on belief in what I’ve come to think of as the invisible bond vigilante and the confidence fairy.
Basically, if we cut spending, the resulting so-called "confidence" in the economy will spur growth and job creation. Yeah. Confidence. Maybe. As Krugman notes, this hasn't worked for Ireland. But why should we let contemporary evidence and historical precedent get in the way.