Monday, December 1, 2008

NYT Krugman: Deficits and the Future

 Many economists, myself included, are calling for a very large fiscal expansion to keep the economy from going into free fall.  [....] You can make a reasonable case that Bill Clinton’s fiscal restraint in the 1990s helped fuel the great U.S. investment boom of that decade, which in turn helped cause a resurgence in productivity growth. [ But today is different. ]

Fiscal expansion will be even better for America’s future if a large part of the expansion takes the form of public investment — of building roads, repairing bridges and developing new technologies, all of which make the nation richer in the long run.  [more at NYT]

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