In an essay entitled "Depression Economics Returns", Economist Paul Krugman, recent recipient of the Nobel Prize in Economics, says the U.S. is already in the realm of depression economics. The size of the stimulous he says we need to pull us out of this depression is eye-popping:All indications are that the new administration will offer a major stimulus package. My own back-of-the-envelope calculations say that the package should be huge, on the order of $600 billion.News reports are already indicating that there was a record decline in retail sales last month, unemployment claims are soaring, state unemployment insurance funds are depleted, and the end is not yet in sight.
Some of the most alarming news is coming from the nation's third largest city and President-elect Obama's hometown, the city of Chicago. The mayor has advised the city to prepare for mass layoffs.
1 comment:
interesting the adjectives that are used. Bush calls for a 700 Billion dollar bailout of wall street and it's vital, the end of the world as we know it if we don't get it.
Krugman advises 600 billion to stimulate the economy and get people back to buying products so businesses can make a profit again, and it's HUGE, Costly, Budget breaker, not time to be timid.
What would have happened if that 700 Billion that is in the process of evaporating into golden parachutes had been used as an economic stimulus instead?
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