Obama's Cure Not Potent Enough for Economic Ills

Call for bold action on economy followed by plan that falls a long way short
By Rob Quinn,  Newser Staff
Posted Jan 9, 2009 5:50 AM CST
People pass a jewelry store that is going out of business Thursday, Jan. 8, 2009 in New York.    (AP Photo/Mark Lennihan)
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(Newser) – Barack Obama's call for aggressive action on the economy hasn’t been backed up by a plan bold enough to do the job, Paul Krugman writes in the New York Times. Plunging levels of investment and consumer spending will leave a gap of around $2 trillion between what America produces and what it can sell—and Obama's plan only offers $775 billion to fill that hole.

Fear of debt could be staying Obama's hand, Krugman writes, as could political caution or simply a lack of "shovel-ready" public works projects. But whatever the reason, two huge gaps remain: "the gap between the economy’s potential and its likely performance, and the gap between Mr. Obama’s stern economic rhetoric and his somewhat disappointing economic plan."