Big Government Prevented Great Depression II

...And Republicans kept demanding that it step aside and allow it

By Kevin Spak, Newser Staff

Posted Aug 10, 2009 8:22 AM CDT

(Newser) – The economy isn’t in great shape, but we’re going to avoid Great Depression II, writes Paul Krugman in the New York Times. “What saved us? The answer, basically, is big government.” Unlike the private sector, the government didn’t decrease spending as its income decreased, which kept a whole lot of people employed. “Budget deficits are actually a good thing right now,” he writes.

It also rescued the financial system, albeit clumsily, and kept roughly a million people employed with stimulus cash. And all the while, Republicans have been arguing that the government should get out of the way and let the economy burn. So with "utter catastrophe" narrowly averted, Krugman writes, “Aren’t you glad that right now the government is being run by people who don’t hate government?”

[Images (2)]

[Quotes (2)]

Nobel Prize-winning economist Paul Krugman speaks during a press conference at the World Capital Markets Symposium in Kuala Lumpur, Malaysia, Monday, Aug. 10, 2009. (AP Photo/Lai Seng Sin)

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Ronald Reagan was wrong: sometimes the private sector is the problem, and government is the solution. - Paul Krugman

For now, all we have to celebrate are indications that things are getting worse more slowly. - Paul Krugman

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Big Government Prevented Great Depression II