Paul Krugman's column today is pretty mild, until his discussion of the likely path of the economy leads him to this prescription for the new president:
But what the economy gives, it can also take away. If the current slump follows the typical modern pattern, the economy will stay depressed well into 2010, if not beyond — plenty of time for the public to start blaming the new incumbent, and punish him in the midterm elections.
To avoid that fate, Mr. Obama — if he is indeed the next president — will have to move quickly and forcefully to address America’s economic discontent. That means another stimulus plan, bigger, better, and more sustained than the one Congress passed earlier this year. It also means passing longer-term measures to reduce economic anxiety — above all, universal health care.
"To avoid that fate"--the fate in question is expressly political. To avoid a political fate, the new president will have to push of a "bigger, better, and more sustained" stimulus plan than the one from January. If an Obama administration presumes to finance a reelection campaign with the next generation's tax money, then I will be sorely disappointed and no happier than I am with the current administration's practice of doing so.
We don't need stimulus plans until the economy "gets it" or until the public no longer assigns blame to the incumbent politicians. We need a rational capital budget for desperately needed public infrastructure investments and a plan for implementing it that allows for flexibility in timing.
I'll discuss on the other prescription--universal health care to relieve economic anxiety--in a subsequent post.