Economists are divided on both fiscal and monetary policy, the most important economic issues of the day. The divide is on the direction of policy, not on some detail. A field cannot be more lost than to be clueless on its most important issues. This is the equivalent of Lewis and Clark disagreeing on whether they are going to the Mississippi or the Pacific. When you don’t know east from west, you are lost.
The fiscal policy question is the impact of government deficits and debt on the size of the economy. A concrete fiscal question is to determine the impact of an additional dollar, or trillion dollars, of spending and debt by the US federal government. In economic parlance if the government spends an additional $1, and borrows the $1, what is the impact on the economy?
The answer depends on whom you ask. Keynesian economists believe the $1 of extra spending is ‘stimulus’ that gets multiplied to become something more than $1. On the other extreme, some economists believe that the $1 has to come from somewhere. If the government uses the $1 to create, for example, an IRS Star Trek video (click here), then the additional spending makes the society poorer, because the $1 would have been used better by the private sector.