What all three of these things had in common was that they followed immense bubbles.
And the economic policies which followed made matters much much worse than they would have been had they followed a more Keynesian approach. Krugman, contrary to your constant assertions, Steve, is very conscious of the debt. Just gives it less priority than avoiding a crushing global depression. He says, over and over again, that the debt has to be addressed. Just first things first.
As for your take on Japan, Krugman's argument, well argued with data, is that they failed to seriously use stimulus. And that led to the long march through nothing. I'm afraid Krugman is the more credible witness here.
As for the US, I don't recall him saying three times the stimulus was needed, though he and Romer and others, Stiglitz among them, said much more was needed. And the present economic doldrums--high levels of unemployment--are evidence on their side of the argument rather than the other. Obama and his crew can, of course, point to their argument that the levels would have been higher without the small stimulus used. I suspect they are right. But the argument which goes that the stimulus is causing some sort of economic problems, that argument is definitely wrong. |
