Whether you are a "sort of" New Keynesian or an “Austerian,” after reading Paul Krugman's "End This Depression Now" you will have a better understanding of economics and the arguments for and against more government spending (i.e. stimulus) to get us out of the depression.
While many economists call for austerity - cutting government spending to reduce the deficit - Krugman, winner of the Nobel Prize in Economics, makes a good case for more government stimulus spending when the economy is in a depression. He does not deny we need to cut government spending, but argues that this is the wrong time to do it.
With unemployment high, consumer spending is down. People and businesses become more and more cautious about spending and this stalls the economy even more. Among other recommendations such as mortgage relief, he claims a huge injection of government spending would get people back to work, jump start the economy and put us on the road to recovery. Krugman’s thesis finds support in the Economist magazine in its outlook for Europe. His criticism of Obama is that his stimulus program was not big enough.
Krugman is of the opinion that if the politicians had some courage to act, the problem could be solved quickly. Unfortunately, our political class (both parties) is mired in polarizing, uncompromising extremism and can’t seem to focus on getting anything accomplished other than raising Super Pac money and getting reelected . They may need a “stimulus” kick from voters. Term limits anyone?