The truth is they're not. What's up with the what ifs?
"The real story of this election, then, is that of an economic policy that failed to deliver. Why? Because it was greatly inadequate to the task."
Krugman continues to argue for mo' money though the bailed out US banks are stuffed to their gills with cash. Demand is needed, not more cash on bank's balance sheets. And as Obama said "there is no such thing as shovel ready projects." So I don't see where Krugman is going with this.
"But economies that have experienced a severe financial crisis generally don’t heal quickly. From the Panic of 1893, to the Swedish crisis of 1992, to Japan’s lost decade, financial crises have consistently been followed by long periods of economic distress. And that has been true even when, as in the case of Sweden, the government moved quickly and decisively to fix the banking system.
To avoid this fate, America needed a much stronger program than what it actually got — a modest rise in federal spending that was barely enough to offset cutbacks at the state and local level. This isn’t 20-20 hindsight: the inadequacy of the stimulus was obvious from the beginning."
No Professor, to avoid this fate the US had to see that shareholders and bondholders of failed institutions were wiped out. Then new, clean money would of bought the assets of C, GS, JPM, GM or whomever for pennies on the dollar and the US would of had a "V" shaped recovery. Instead, Obama practiced crony capitalism and propped up financial entities that are to this day insolvent. Other than than the trillions of US taxpayer dollars used to bailed out these insolvent financial institutions their other saving grace was the rule change from mark to market to mark to fantasy. If a bank is holding a $200,000 mortgage on a piece of property that is now worth $120,000 that piece of paper is not worth the $200,000 that banks are claiming they are. This is due to the mark to fantasy rule change.
Krugman is not much more than a political hack calling for more deficit spending in the midst of a liquidity trap. Wanting to pile on even more debt that can never be paid. Even the left leaning Brits have grown weary of "Kruggers" when they write: