We're Doomed Without Another Stimulus: Krugman

Jobs report offers scary echoes of 1930s stagnation
By Jason Farago,  Newser Staff
Posted Jul 3, 2009 7:35 AM CDT
Larry Summers, Christina Romer, Tim Geithner and Barack Obama at the White House.   (AP Photo/Gerald Herbert)
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(Newser) – Yesterday's grim jobs report is the clearest sign yet that the US desperately needs another fiscal stimulus, writes Paul Krugman in the New York Times. This is 1930s redux: a Democratic president has pushed through an insufficient program, while strapped state governments cancel out federal spending with their own budget cuts. If President Obama doesn't act, he'll be facing his "personal 1937."

Further stimulus won't be easy. Republican leaders are united in opposition, "unconstrained by facts or logic," and Krugman's fellow economists are "recycling old fallacies" about the dangers of public spending. Obama's team, particularly Council of Economic Advisers chief Christina Romer, has a good understanding of the dangers of repeating the 1930s. "What I don't know," writes Krugman, "is whether the administration has faced up to the inadequacy of what it has done so far."