If you haven't seen it yet, Kevin Murphy of the University of Chicago has reduced the question of whether the fiscal stimulus will have net benefits to a single inequality, an inequality that is a function of just four parameters. (Video, that also includes presentations by John Huizinga and Robert Lucas; slides for just Murphy's presentation.) Murphy gives his estimates of the four parameters and concludes that the stimulus's costs outweigh its benefits.
Brad DeLong of Cal-Berkeley, accepting the inequality for the sake of argument, gives different estimates of the four parameters and concludes the benefits are much greater.
Ah, this reminds me of the macroeconomics of my vanished youth, when macroeconomists estimated multipliers and slopes and fought--sometimes bitterly--over those values. The macroeconomics of my youth, when I thought that someday, given enough thought by brilliant economists and enough sophisticated econometrics, one side or the other would have to concede, at least mostly, and the world would have something approaching a consensus.
So will other economists attempt to estimate and debate the four parameters in Professor Murphy's elegant little inequality. I think so.
Will there be a consensus this time?
I won't be holding my breath.
UPDATE: Arnold Kling adds two things to Murphy's equation. One, catchy names for the four parameters: the Keynes Effect, the Housework Effect, the Galbraith Effect, and the Feldstein Effect. (In economics, 37% of the success of a theory is determined by whether or not the theory involves catchy names. That's the Newmark Number.) And two, he reminds us that the parameters are almost surely not constant. That is, whatever the values are for a $10 billion stimulus, the values are probably different for a $1 trillion package.