Running Deficits or...?
The great debate is under way. During recessionary times, should governments ramp up spending to stimulate the economy even if it means running deficits, or should they batten down the hatches and resist the temptation to splurge until the economic storm passes?
Paul Krugman, the freshly minted Nobel prize-winning economist and writer for The New York Times, argued in a column recently that immobilizing spending could exacerbate existing problems. Instead, he said, Washington should consider extending unemployment benefits to the growing numbers of jobless, offer emergency financial aid to state and local governments, buy up troubled mortgages and engage in major infrastructure investment.
- GARY MASON Globe and Mail October 18, 2008