Costs of Fiscal Austerity

Paul Krugman writes:

Does Fiscal Austerity Reassure Markets?: For the most part, this debate has been between those like me and Brad DeLong, who assert that budget-cutting should be postponed until we’re no longer in a liquidity trap, and those who insist that we must cut immediately, even though it would inflict economic damage and do little to improve the long-run budget position, because immediate cuts are necessary to achieve credibility with the markets.

I would add that we...