Tuesday, December 02, 2008

Attention: Deficit

"Right now there's intense debate about how aggressive the United States government should be in its attempts to turn the economy around. Many economists, myself included, are calling for a very large fiscal expansion to keep the economy from going into free fall. Others, however, worry about the burden that large budget deficits will place on future generations. But the deficit worriers have it all wrong. Under current conditions, there's no trade-off between what's good in the short run and what's good for the long run; strong fiscal expansion would actually enhance the economy's long-run prospects."

From article in The New York Times by Paul Krugman

Krugman is right. You stop the bleeding, then you worry about how much the bandaids cost.