‘The boom, not the slump, is the right time for austerity at the Treasury.” Paul Krugman quoted this assertion, made by John Maynard Keynes in 1937, to frame “Keynes Was Right,” his final New York Times column for 2011. The master’s adage, reworked by Krugman, is, “Slashing government spending in a depressed economy depresses the economy further; austerity should wait until a strong recovery is well under way.”
This is not a fresh theme for Krugman. He has filled too many columns to remember with complaints that President Obama’s 2009 stimulus bill wasn’t nearly big enough to catalyze a true economic recovery. In October 2010, for example, Krugman lamented that the “key problem” with the Obama economic policy was that “we never had the kind of fiscal expansion that might have created the millions of jobs we need.”
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