ABSTRACT
This chapter discusses the views of deficit hawks—those who believe government deficits are always harmful, even if sometimes they are necessary. It considers the views of those who believe government spending in general needs to be reined in. The chapter examines two related macroeconomic arguments. The first is the dispute between those who seek to use public deficit spending to fight unemployment and those who are opposed to all public deficit spending. The second and more important issue is one that pits those who have come to be called the austerians against those who believe that a strong and large public sector is extremely important for the health of a market economy like that of the United States. The chapter focuses on the theories opposing both government deficit spending and so-called overspending, as well. Monetary policy should support fiscal policy.
