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Crisis and Stimulus

* House Minority leader thinks gov't should tighten its belt
* House Speaker Pelosi open to more stimulus. Note the three economists worried that the plan isn't big enoguh.

Then there's Krugman:
* Savings glut. Obama still dithering on how to save the banks. Plan too small, while the GOP urges tax cuts (but that's their answer to everything.) Europe's structural problems -- one currency, 16 governments, they can't coordinate spending that helps the whole area, or devalue say the Spanish currency. OTOH, their welfare states help prevent abject misery and buffer spending.

* Japan Reconsidered -- whee, we're following their exact same path! And a decade of sluggish growth seems not so bad compared to mass unemployment (photos). Krugman used to say a lot about Japan, back in the day. Mostly "you need more Keynes!" They never really listened.

* More on too small. Note Obama talks about creating 3.5 million jobs in two years, when we've lost over 4 million. The US faces a shortfall of $750 billion in demand; the stimulus is $800 billion over two years, much of which will be saved, not spent. Actually, some of that $800 will be spent over the decade. Oh, and that's an advisor to Reagan writing; he also advised McCain, while calling for a big stimulus back in October.

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Damien Sullivan
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