Pundits can't help but ask whether the winter's fiscal stimulus has failed, and for Joseph Stiglitz it has—because the Obama administration made "political compromises that caused it to be less effective than it could have been." For the Nobel Prize-winning economist, there is no option but a second stimulus to stand in for dampened customer demand. "Not preparing for a second stimulus now risks a weaker economy," he writes: "more bankruptcies and home foreclosures and higher unemployment."
A good second stimulus, concentrating on assets and helping to mitigate states' woeful budget shortfalls, would head off unemployment and deflation with "little downside risk." But the Obama administration screwed up big time by plowing too much money into drowning banks, "confusing corporate welfare with a Keynesian stimulus" and leaving voters unwilling to contemplate another push. Economically, there isn't much choice: "If we try to save money now, we risk spending much more later."