That is not what he believes he is saying, but as I see it, his recommendations are akin to bleeding the patient to death (and digging our economic hole even deeper). He writes in his most recent column:
If there’s one piece of economic wisdom I hope people will grasp this year, it’s this: Even though we may finally have stopped digging, we’re still near the bottom of a very deep hole.So, what does Krugman recommend? Well, he seems to believe that we are not digging fast enough, and that more digging will get us out of the hole. Krugman declares:
So what can be done to accelerate this all-too-slow process of healing? A rational political system would long since have created a 21st-century version of the Works Progress Administration — we’d be putting the unemployed to work doing what needs to be done, repairing and improving our fraying infrastructure.Yes, yes, bring back the WPA! Yeah, the organization with the alternative title, "We Piddle Around," and "We Poke Along." I'm not sure that a "rational political system" would be creating such waste, but to Krugman, the economy simply is a mechanistic mass of homogeneous factors into which one throws in a bunch of money, with an economy magically appearing.
What Krugman never will understand is that the kind of government he demands is a burden to the economy, not a stimulator. I have yet to see him suggest one thing that actually would make our economy stronger. Instead, he claims that we can have a recovery based upon government spending and subsidized "green energy" production.
Now, both Krugman and I see problems on the horizon, but for two very different reasons. First, here come Krugman's worries:
Realistically, the best we can hope for from fiscal policy is that Washington doesn’t actively undermine the recovery. Beware, in particular, the Ides of March: by then, the federal government will probably have hit its debt limit and the G.O.P. will try to force President Obama into economically harmful spending cuts.Now, I am not sure how the Fed's QE2 or QE100 would "promote job growth" in the long term, given that it would more likely result in stagflation. For that matter, what this economy needs is real economic growth, and if that occurs, then "job growth" will follow.
I’m also worried about monetary policy. Two months ago, the Federal Reserve announced a new plan to promote job growth by buying long-term bonds; at the time, many observers believed that the initial $600 billion purchase was only the beginning of the story. But now it looks like the end, partly because Republicans are trying to bully the Fed into pulling back, but also because a run of slightly better economic news provides an excuse to do nothing.
Instead, Krugman really seems to believe that if the government creates official "jobs" and then pays people with printed money (QE2 version), then the result will be a growing, robust economy. Well, maybe Krugman and Brad DeLong believe that nonsense, but everything he is recommending will do nothing but make the economic hole we are in even deeper and the sick economy even more ill.