So Paul Krugman blasted the compromise stimulus, which took out about $100 billion from the original stimulus, a bill that the Nobel laureate already thought was too small.
Krugman’s right and the “centrist” Senators, such as Susan Collins of Maine and Ben Nelson of Nebraska, are wrong.
Basically, it boils down to this: Either you think that massive (and yes, wasteful) government spending can somehow re-awaken the animal spirits, and spur GDP growth through various multiplier effects, or you don’t. Either you see the GDP shortfall as a “hole” to be filled in, or you don’t?
If you don’t think that more spending is the answer when the problem is massive public and private sector debt, then what good does this compromise do? If you believe the only solution is to take our lumps, then there’s nothing in this new bill that does any good.
This is why bipartisanship is such a vacant concept. While it’s great that politicians want to get along, if it means abdicating any economic principles merely to get more votes, it’s a total waste.