Paul Krugman, like me, is a liberal, but that's not the only reason I like him. I actually think he is right. The Government has to be the spender of last resort. You can't save your way out of a depression, you have to spend. Spending is the only way to create jobs. That is exactly what we did in World War 2. From an economics point of view, WW2 was a massive government jobs program. On his blog Krugman writes:
A spending freeze? That’s the brilliant response of the Obama team to their first serious political setback?
It’s appalling on every level.
It’s bad economics, depressing demand when the economy is still suffering from mass unemployment. [Read More]
In my opinion World War 2 may have ended the effects of the depression, but it was the New Deal programs of President Franklin D. Roosevelt that started the recovery. This recovery, I think, would have been much further along had not a new conservative coalition caused a rollback of the New Deal policies in early 1937, which caused a setback of the recovery. A setback that it took a war to set right. In my opinion Obama's spending freeze is another such setback. Hopefully it will not take another World War to set things right.
No comments:
Post a Comment