For those of us who spent the Reagan revolution arguing against the idea of austerity and instead in favor of supply-side tax cuts, it’s quite something to cover the eruption in the 21st century of the latest feud among economists. A generation ago we didn’t argue against spending cuts, simply that sometimes it was better to borrow than tax. Today’s dispute has been triggered by the Nobel laureate Paul Krugman, who, in his column in the Times, has been going after Harvard’s Kenneth Rogoff. This for the warnings by Mr. Rogoff that there is a limit to how much debt a country can take on before it begins to have a negative impact on growth.

“Debt hysteria” is the phrase Professor Krugman uses in today’s column to describe the fear that has been driving economic policy in the current crisis. For years he has been criticizing Chairman Bernanke of the Federal Reserve for running a monetary policy that’s too tight. He describes our policy as “monstrously failed.” He warns that there’s a “real danger we’ve ignored: the corrosive effect, social and economic, of persistent high unemployment. And even as the case for debt hysteria is collapsing, our worst fears about the damage from long-term unemployment are being confirmed.”

Whichever one is right — Professor Rogoff or Professor Krugman — the thing to remember is that during the Reagan revolution things were different. Reagan acceded to the presidency but a decade after the collapse of the Bretton Woods system. Inflation was rampant, and growth had stalled. This was stagflation. Reagan made a strategic decision to attack this with measures designed to increase incentives to get back to work. These were the supply-side tax cuts, which reduced the marginal tax rate, the rate on the next dollar earned.

Reagan’s presidency commenced not long after Paul Volcker was elevated by President Carter to chairman of the Fed. While Reagan put through his fiscal revolution, Mr. Volcker launched his attack on inflation, running up interest rates and precipitating a recession. Instead of lasting through the 1980s, however, the recession was cut short as the Reagan tax cuts began to work. This triggered the great boom that, net of retreats, carried through the Clinton years, when the post-Cold-War peace dividend was paid.

So great was the growth during these years that tax revenues boomed and the budget came into balance. This was the situation inherited by President George W. Bush, when a new war erupted and social spending soared. Congress signaled that supply-side tax cuts weren’t going to be permanent. A different kind chairman than Mr. Volcker was running the Fed. This was the period during which the vast lending in dubious real estate was done, all designed to promote a social agenda.

The warning of trouble came in the collapse of the dollar, which had a value of a 265th of an ounce of gold on the day Mr. Bush was sworn to his first term. By December 2005, it had collapsed to a 500th of an ounce of gold. This was marked in these pages by James Grant, editor of the Interest Rate Observer, and by our editorial, “The Bush Dollar,” which warned that a dollar “worth less than a 500th of an ounce of gold is something Mr. Bush is going to have a hard time explaining to his grandchildren — not to mention the rest of us.”

Of course, a 500th of an ounce was just the beginning, yet save for a handful of journalists and congressmen, no one seemed to care. Messrs. Krugman and Rogoff and, for that matter, Mr. Bernanke, are similar in one respect — they have spent this whole great recession evincing indifference to the gold price. Among many, comfort during the crisis was taken from willingness of foreigners to lend to the American government and from the fact that the dollar was doing fine when compared with European and Communist Chinese scrip.

We have likened this to a passenger in a plane taking comfort when the plane suddenly plunges in the fact that the passenger in the seat across the aisle is also losing altitude. The fact of the matter is that the Reagan boom coincided with a vast flow of value back into the dollar, an issue Professor Krugman ignores. This newspaper is not an economist, but a generation of editorial writing has taught us that the real signal to watch if one wants to talk about government debt is the value of the dollar.