Krugman: Obama Can't Take Crutches Away Too Soon

The Obama administration must resist the temptation to leave the economy to its own devices too soon, Paul Krugman writes in the New York Times. “Getting to the point where our economy can thrive without fiscal support may be a difficult, drawn-out process,” he writes, with no bubble in sight to replace housing. “Things can’t just go back to the way they were.”

That means consumer spending won’t look like it did when “people were using their houses as ATMs.” So what’s going to drive the economy? Cutting the US trade deficit is one possibility, Krugman writes, by spending more on American products—and employing more workers to make them. But it’ll take time “before the US economy is ready to live without bubbles.” (More Paul Krugman stories.)