Intriguing

Fixing the Stimulus

As Barack Obama seeks to steer his rescue package through Congress, liberals like Paul Krugman and more fiscally conservative columnists like Clive Crook have the same advice: Spend more. “If anything,” Crook writes in the Financial Times, “$800bn over two years now looks too small.” He recommends spending $500 to $750 billion alone in 2009, the majority of which should be “high-impact spending” and not tax cuts. Krugman notes a study by Christina Romer, Obama’s incoming chief of the Council of Economic Advisers, which says that even with the rescue plan, unemployment will be 7 percent in the fourth quarter of 2010. “If Mr. Obama drops the ‘jump-start’ metaphor,” Krugman writes, “if he accepts the reality that we need a multi-year program rather than a short burst of activity, he can create a lot more jobs through government investment, even in the near term.”