It's much better, in a depressed economy, to err on the side of too much stimulus than on the side of too little."

The follow up to that (not sure if it was Krugman or somebody else who stated it) is that you can always turn down 'the heat' if the economy gets 'too hot.' (I guess via Fed action to raise interests rates among other things.) But if you haven't started with enough 'fuel' things may never got 'hot' enough.

"there's actually considerable support for an aggressive rescue plan, even among business interests "

Even? Business interests are frothing at the mouth, for the manna descending from Washington. They *love* the idea of a huge stimulus, poorly thought out (let's spend money! no let's spend lots and lots of money! oh I know how we can even spend more money!), in the same way that the banks loved the TARP. It's taxpayers - the common people, you and me - who will eventually pay for this train wreck in the making.

Now tell me again how this borrow your way to prosperity thing works.That little scheme up in New york that fell apart this week, works like government,except he could not print his own money. When this inflation thing hits, I am going to get rich. I save and consume very little.

Those that hope for inflation to reduce their debts had better take another look at what brought us to this point in thew first place.

2008.

The Year Wealthcare was created.

I know folks are tired of me calling the massive subsidies for the few at the expense of the many, Wealthcare.

But, we have fundamentally not supported our economy with sustainable employment.

It's not a stimulus package that's needed, but a fundamental shift in America's economy....leaner, greener, more sustainable.

The key is to build our future now.

Not just regurgitate same old same old junk.

Where are the massive solar arrays?

The windfarms?

The tidal electrical generators?

Universal healthcare?

Full funding for the job retraining promised under NAFTA?

A carbon TAX, not just a cap-and-trade, that would make transparent the FULL cost of manufacturing in China.

Don't stop, Tom.

"The more... the better," Spoken like a man who's already got his assets offshore and out of USD.

...and outside of Krugman there's considerable concern amongst economists that attempts to reflate an already over-inflated economy are just going to prolong and increase the necessary corrections to come (much as the current crisis is the result of inflating a housing bubble to prevent the contraction that really should have followed the pricking of the dot-com bubble). I really don't know the answer, but I'm deeply concerned this is going to get really, really ugly either way... I don't think there is a quick fix, no matter how many trillions are printed.

...and outside of Krugman there's considerable concern amongst economists

Got some names there? Are we talking real economists, or the AEI types who get paid to find a justification for policies that benefit Republican interests?

For years, if not generations, some of us

have argued for a detestable notion of promoting

sustainability.

Not just being "organic" but fundamentally econo-eco-friendly.

Obama is faced with what's called a paradigm shift.

We've got to start living today like it's 50 years in the future, or else we won't get there.

I hereby declare that 1/10 of 1% of bail out monies should go towards a sustainable economy.

The monies spent in that effort would yield a greater return than all the 100s of billions that Wealthcare has sucked up to date (this year alone).

I know I'm right.

For humans to evolve, we've got to always become more efficient and never lose sight of the fact that there's only one earth.

http://www.newser.com/story/45155/madoff-fraud-will-hit-hedge-funds-hard.html

This is not what I mean by sustainability.

In fact, do ya think Madoff is the only Ponzi-bozo on Wall Street?

Me thinks TARP, aka Wealthcare funds have been wrongfully utilized!

Hedge funds may all be Ponzi schemes.

Does the Obama camp even listen to Krugman's advice? I sure hope so.

Danp, I can name one real economist off the top of my head.

Jim Jubak at MSN had been warning about inflating bubbles for better than six months.

I've commented favorably a number of times on Jubak's analysis at my blog.

What are we trying to accomplish with the economy? Re-inflate the bubble and get consumers to spend more? Americans are already in too much debt and have houses full of junk they don't need anyway. We've got to get away from the consumer-debt-financial gimmick economy (and the idea of Endless Growth) and develop a reality-based, sustainable economy.

Wow, not only did the GOP bring the American citizens to its knees, it brought down the economy.

Welcome to the new Divided States of America.

For me, yeah, this is not good news. However, I'm not tied to anything here. I can jump up and leave this country at any given time.

I don't trust the banks, and for sure, I will never invest in the stock market again. I now use Credit Unions, and when they start acting like the bank, I will no longer use them!

SocraticGadfly - Unfortunately I couldn't get to your blog (I think your link is bad, but I googled it, and my problem is my old computer, I think). I will say this, however. If by bubble, you mean debt, housing or stock market, I will buy that gladly. And maybe that's what NewHorizon meant, too, though I was more focused on "over-inflated economy", which to me meant too much production, too much spending regardless of debt.

As for Obama's plan, I don't mind deficit spending if the purpose is to create lasting jobs, and not merely enough short term jobs to pay off personal debt, followed by government owned infrastructure that will require never-ending spending.

So where is Steve's consensus? I do not see it among the comments.

I also notice that beyond a few buzzwords, no one here has details about what government employees should be doing to create private sector jobs.

"Things can't go on like this!"

In his "Tour of German Inflation" (in One-Way Street), Walter Benjamin singled out the expression, "things can't go on like this" as exemplifying the "stupidity and cowardice constituting the mode of life of the German bourgeois". Embedded in the expression is the unfounded conviction that, somehow or other, unpleasant conditions cannot be enduring ones. However, as Benjamin noted, "to decline is no less stable, no more surprising, than to rise."

Yesterday, in the New York Times, nine economists weighed in on what, in their opinion, would constitute the ideal stimulus package, given the constraints of a $500 billion total to be either spent, returned in tax cuts or some combination of the two. Of course, the underlying premise of any stimulus package is the growthodox conviction that "things can't go on like this" -- that the accustomed "economic growth" of the recent past should be the norm and interruption of that growth can only be an anomaly.

Get over it, suckers. Bernie Madoff had the economic stimulus package meme down pat. Madoff's estimated $50 billion Ponzi scheme was already 10% of the proposed $500 billion package. O.K., then, in twenty five words or less, what's the difference between a stimulus package and a Ponzi scheme -- bearing in mind the operative concept, "German Inflation" (see also "Uh Oh...")?

DanP: http://socraticgadfly.blogspot.com it is; I left the final "m" off "com," I see, in m y hyperlink.

Jubak a few years ago called the housing bubble for the bubble that it is, and he is worried that some of Bernanke's actions, if not creating another ecoomic-sector-specific bubble, will fuel inflation in general.

This is the shell game corporations are playing. This is why we should demand to keep all union jobs.

offshore in the Cayman Islands, corporations dodging U.S. taxes, except for Warren Buffett.

Here's the deal, Citigroup,
coca-cola
intel
altria - philip morris, kraft foods...
procter & gamble
seagate technology
del monte
j.p. morgan chase

here's the deal JP Morgan Chase, Intel said they would repatriate the millions of dollars of U.S. profits, if they were given a tax break to pay only 5.25% and they'd use it to create jobs, fund pensions & payoff debt.

these companies are using artificial pricing = transfer pricing. An accounting practice that let companies buy & sell with their offshore subsidiaries and set prices.

e.g. they'll say they paid $400 for a dozen shirts to export from China, but it costs $2.00 to import to U.S.

This is called transfer price abuses, that have left the treasury dept short of revenues.

Yet, 24 of these companies received a total of $35 billion frm the U.S. govt in 2001 for contracts.

sorry,
meant to say,
they'll say they paid $400 for a dozen shirts to import from China,
but it costs $2.00 to export to China

NPR had that Chicago school hack who wrote Freakonomics on yesterday pontficating about "creative destruction" I somehow missed the fact that he was a Friedmanite when the publicity for the book was rolled out a few years ago. His warning for Obama? "Don't increase spending that will create entitlement programs."

NPR sucks.

Also Tom Friedman was on the Daily Show a few weeks back talking up his latest piece of garbage paint by numbers book. Stewart ask him about the risk of creating another bubble. "Bubble's are good, they can be great, especially for what they leave behind. If it leaves behind a wonderful infrastructure then it will be a great thing..."

The roller coaster bubble ride is part of the schizo nature of our society. A society where you can hear daily about the "evil" of suicide bombers and terrorists that kill innocent civilians meanwhile predator drones are killing innocents by the bucket load. A society where an innocent life in the developed world is worth more than that of a life in the 3rd 4th and 5th worlds. A society that can attempt to preserve rainforests while it sprays Columbian forests. A society that can fetishize their young into being the purest of the pure deserving of 1000 dollar baby strollers and whine and complain about gas prices while it sits back and buys gas guzzling cars and won't hold it's leaders actions accountable for our children's future. A society who's economy is driven and based on needless consumption. We're suffering because we need to go by more useless shit at the mall? I feel for the average person that works in retail (hell, I have and some of my closest family still does) but the model is completely flawed.

The American lifestyle is nearing an end because fundmentally it is mentally it.

I'm as guilt as the next guy but it's not hard to see sustainability as the path towards a somewhat healthy future. The sad thing is that it's not a new concept.