Four years after the start of the Great Recession, nobody would mistake U.S. economy for a thrumming engine of growth, prosperity, and human flourishing. Sure, we're officially out of "recession." But the recovery is painfully slow and uneven, and 24 million Americans are still unemployed or underemployed. There's a lot of pain out there, and a lot of potential going to waste.
The worst part? It doesn't have to be this way. Or so says Paul Krugman. In a new book, End This Depression Now!, the Nobel-winning economist and New York Times columnist makes an urgent, even passionate case that our economic problems are, at root, fairly simple, and we have the knowledge and the tools to solve them. We've been here before, Krugman argues, during the Great Depression, and the actions that got us out of that crisis will get us out of this one, too.
The basic issue, says Krugman, is a lack of demand. American consumers and businesses, aren't spending enough, and efforts to get them to open their wallets have gone nowhere. Krugman's solution: The federal government needs to step in and spend. A lot. On debt relief for struggling homeowners; on infrastructure projects; on aid to states and localities; on safety-net programs. Call it "stimulus" if you like. Call it Keynesian economics, after the great economic thinker (and Krugman idol) John Maynard Keynes, who first championed the idea that government has an essential role in saving the free market from its own excesses.
Read more: http://www.rollingstone.com/politics/blogs/national-affairs/paul-krugman-on-how-to-fix-the-economy-and-why-its-easier-than-you-think-20120502#ixzz1uCcTfzfB