Paul Krugman in his New York Times column yesterday chastises the Obama administration for not pushing for a sufficiently large enough stimulus package to juice the economy.
“Would the Obama economic plan, if enacted, ensure that America won’t have its own lost decade?” he asks. “Not necessarily: a number of economists, myself included, think the plan falls short and should be substantially bigger.”
Given this morning’s news that the economy shed nearly 600,000 nonfarm jobs last month–the biggest monthly loss since 1974–the case for government stimulus never looked stronger. All the more so if deflation threatens, which it clearly does.