Mr Krugman, appearing to talk about officials and experts in the US, condemns them for their concern about long term federal debt. But he cites a European official and then goes off to talk about Ireland.
As sort of a memory exercise, does anyone remember when President George W Bush (and especially his Secretary of Defense, Donald Rumsfeld) used to ignore Old Europe and everyone would get all upset about it? Try hard. You've got it! So what is Mr Krugman recommending the current Administration do? Ignore the advice and actions of Old Europe. Plus ca change, plus c'est la meme chose (the more things change the more they stay the same).♠
We are talking theology here. On the one hand you have those who say that FDR's big failure during the Great Depression was lack of sufficient deficit spending. On the other hand, you have those who say that deficit spending does not work.
Frankly, it is like walking into the Astro Final and having there be one question only. "How big an asteroid is needed to destroy the earth. Give three examples."
What we know is that the Great Depression ended for the United States during World War II and that by 1944 we were experiencing manpower shortages. The war actually started in the mid-1930s but we were not engaged much until about 1939, when we became an arms merchant. We joined the war December of 1941. Unemployment as a percent of the civilian labor force was as follows:
It would seem that even with war production going strong and the draft and women being recruited into the work force, 1942, our first year of the war, we still have a nominal "full employment" but not the numbers a layman might expect. And competition was tight for workers, thus the beginnings of employee health benefits on a big scale.
There is this view, by Robert Higgs:
ABSTRACT: Relying on standard measures of macroeconomic performance, historians and economists believe that “war prosperity” prevailed in the United States during World War II. This belief is ill-founded, because it does not recognize that the United States had a command economy during the war. From 1942 to 1946 some macroeconomic performance measures are statistically inaccurate; others are conceptually inappropriate. A better grounded interpretation is that during the war the economy was a huge arsenal in which the well-being of consumers deteriorated. After the war genuine prosperity returned for the first time since 1929.I am saying it is not all that clear that we know what happened or what should have happened.
Regards — Cliff
♠ Or, as Kad Barma would say, there isn't a dime's worth of difference between Democrats and Republicans.