Enough about the Deficit: It's Time to Spend

Volatile markets rule the headlines, but the imperiled nonfinancial economy is more worrisome, Paul Krugman writes in the New York Times. The way to get that rolling again, contrary to what John McCain said in Wednesday’s presidential debate, is to ignore the deficit and increase government spending. As retail sales plunge alongside industrial production, “all signs point to an economic slump that will be nasty, brutish—and long.”

It’s nearly certain unemployment is headed above 7%. And with no new bubble to replace the housing boom, recovery remains elusive. But spending could provide needed infrastructure improvements, jobs, increased unemployment benefits and aid to state and local governments so they don’t hatchet their own budgets. “Now is not the time to worry about the deficit.”
(More unemployment stories.)