Stimulus Not Big Enough to Save Us: Krugman
Obama's economic policy is falling behind the curve
By Kevin Spak, Newser User
Posted Mar 9, 2009 9:53 AM CDT
President Barack Obama makes remarks at the Columbus Police Graduation Exercises in Columbus, Ohio ,Friday, March 6, 2009.   (AP Photo/Gerald Herbert)

(Newser) – Pundits are constantly complaining that Barack Obama’s stimulus is too big and too ambitious, but Paul Krugman has a different complaint: It’s too small. Obama’s promise that the bill will create or save 3.5 million jobs by 2010 “looks underwhelming to say the least,” given that the economy is already down 4.4 million jobs, and losing another 600,000 by the month.

But Obama doesn’t seem to realize he’s behind; he recently said he expects to have “the pillars in place for recovery this year,” and dismissed calls for more decisive bank action as coming from “blogs.” Eventually he’ll come around, Krugman thinks, but by then his economic policies will appear to have failed, and Congress might not give him the money. “As a result, the recession rages on.”

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Mar 9, 2009 5:24 AM CDT
By the way, in the past anytime other countries have faced this situation of insolvent banks, the International Monetary Fund has continually recommended nationalization:
Mar 9, 2009 4:05 AM CDT
What the American system is supposedly built upon is personal responsibility and fair compensation for hard work. The approach to this financial crisis by both Bush and Obama has been just to throw money at the problem, and to reward the excessive risk taking of these banks. All this is doing is postponing the problem. Unfortunately, it would be irresponsible to just let the free market take it's toll on these banks, because the whole market would go with them, which would exceed the depth of the great depression. The only responsible approach is a temporary nationalization. This approach has been demonized by some on the right, but it's more of a free market approach that what's currently taking place. These banks are zombies.... they're bankrupt. In this approach, these insolvent banks would be broken up, their assets would be sold off, and we'd get around this "Too big to fail" issue. But for this to happen both sides need to see the rational behind this approach, and their needs to more discussion and more public support for it.
Mar 9, 2009 2:28 AM CDT
Agreed. Although I think its distinctly possible that Obama knowingly decided to "spread it out" by putting 700 billion in now and then secretly planning to put more in later once things got worse I also think its possible that he is simply too in the center to recognize the full extent of the problem.