As if to answer my question in my last blog, “What Now?” there was Paul Krugman on “Morning Joe” flogging his latest book, “End This Depresssion  Now.”   The first item of interest was Krugman referring to the “Great Recession” as a “depression” and justifying elevating the “recession” to “depression” (or is this lowering) because of continuing bad employment prospects. 

So Krugman is on the same page as am I, i.e. the recovery has been rather lackluster and fallen well short of expectations.  He differs from me in his remedy to improve the situation.  Krugman calls for more “stimulus” from the Feds.  He argues that rather than cutting Fed expenditures, given the cheap cost for the Feds to borrow, the Feds should be borrowing more to channel to state and local governments.  It is worthwhile noting here that most of  President Obama’s “stimulus” money in 2009 was indeed channeled to state governments. 

Krugman argues that Fed money for state governments will allow the states to reemploy teachers and other state employees let go because of tight budgets.   And in this he is right.  The question remains, however, if $900 billion did not do the job, why would his suggestion of $300 billion to do the job work now?

The issue is, as I said in my last blog, that the recovery has not been as effective as we had hoped.  The question now is what will be more effective?  Krugman argues for another stimulus bill.  I argue for recreating the “mountain” of consumer debt that was effectively destroyed by the “housing bubble” collapse.  And there are other remedies being postulated in this election year.