Paul Krugman: New York Times: This Is Not a Recovery: this isn’t a recovery, in any sense that matters. And policy makers should be doing everything they can to change that fact...... If unemployment rises for the rest of this year, which seems likely, it won’t matter whether the G.D.P. numbers are slightly positive or slightly negative. ..... All of this is obvious. Yet policy makers are in denial. ...... officials seem loath to admit that the original stimulus was too small..... Obama ..couldn’t pass a supplemental stimulus now. ..... officials could, with considerable justification, place the onus for the non-recovery on Republican obstructionism. But they’ve chosen, instead, to draw smiley faces on a grim picture, convincing nobody. And the likely result in November — big gains for the obstructionists — will paralyze policy for years to come ...... raise its medium-term target for inflation, making it less attractive for businesses to simply sit on their cash .....we’ve already seen the consequences of playing it safe, and waiting for recovery to happen all by itself: it’s landed us in what looks increasingly like a permanent state of stagnation and high unemployment. It’s time to admit that what we have now isn’t a recovery, and do whatever we can to change that situation.Paul Krugman is one of those guys who I almost always find myself in agreement with. We inhabit the same segment of the political spectrum. And he is an intelligent guy. I felt that even before he won the Nobel Prize.
He makes total sense. Actually his column today totally reflects what I said in a blog post yesterday.
Fears Of A Double Dip Recession Are Very Real
I was of the opinion that the stimulus should have been a trillion dollars. I have also talked in terms of a second stimulus bill. Paul Krugman shares those views.