Paul Krugman has analyzed the stimulus plan as it now stands, using accepted techniques (various multipliers for various types of spending) and finds it falls well short of its objectives. Given the determination of the Obama crowd to jolt the economy into some semblance of life, this strongly suggests that towards the end of the year, more stimulus measures will be on the table, with large dollar figures attached to them.
The post also contains a link to a Bloomberg article with this quote….
A “trillion dollar deficit will be here before we even start the next budget,” Obama said after meeting in Washington with his economic advisers, including Peter Orszag, who has been designated as director of the Office of Management and Budget. “Potentially we’ve got trillion-dollar deficits for years to come, even with the economic recovery we are working on.”
Who would have ever thought that it would be possible to talk about trillion dollar deficits as if they were no big deal?
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