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We Need a Second Stimulus Immediately, Says James Galbraith

Posted Nov 20, 2009 10:02am EST by Henry Blodget in Investing, Recession, Banking

A fight has broken out among economists about whether what ails the country is too much spending or too much debt.

Debt fear-mongers, such as Niall Ferguson, believe that the country's wild borrowing and spending spree has put us on the road to ruin.

"Stimulists," such as Paul Krugman and our guest, professor James K. Galbraith of the Univ. of Texas, believe that spending aggressively and piling up debt is by far the lesser of two evils and that we need to launch a second stimulus immediately. 

Why do professors Krugman and Galbraith believe this? 

Because, in their opinion, skyrocketing debt is far less of a concern than letting the country's people and productive capacity lie fallow for the decade or more that it will take back to get to full employment.

Earlier:

227 Comments

Yahoo! Finance User
Yahoo! Finance User - Friday November 20, 2009 10:07AM EST

Short America, sell the dollar

Yahoo! Finance User
Yahoo! Finance User - Friday November 20, 2009 10:08AM EST

Yea, more money for banks who still won't lend. Great Idea!

Yahoo! Finance User
Yahoo! Finance User - Friday November 20, 2009 10:09AM EST

Gold And Silver: Why They Are Important, And Why They Are Often Manipulated--- http://neithercorp.us/npress/?p=184

Gurbat
Gurbat - Friday November 20, 2009 10:12AM EST

We Need a Second Stimulus Immediately, Says James Galbraith......No. More bailout just means more opportunities for people like Galbraith and corporations liek Goldman Sachs to leech and suck that Timuklus money. .................The unemployed need more opportunitties to expand into. And that means repealing and reverting and aboloshing restrictive rules and laws such as Pattern Day Trader rules...........The sooner US Congress acts to revert restrictive rules such as Pattern day Trader rules, the sooner unemployed and young people will get opportunities to expand themselves productively.........Pardon my French, Jim Cramer!

David
David - Friday November 20, 2009 10:13AM EST

Niall Ferguson is an historian NOT an economist! He is also an apologist for the British Empire and a flak for the 'Globalization' crowd. Why does anyone listen to this guy? and how does he get such exposure for someone with such little credibility?

Gurbat
Gurbat - Friday November 20, 2009 10:14AM EST

We Need a Second Stimulus Immediately, Says James Galbraith......No. More bailout just means more opportunities for people like Galbraith and corporations liek Goldman Sachs to leech and suck that Stimulus money and more debt for US tax payer. .................The unemployed need more opportunitties to expand into. And that means repealing and reverting and aboloshing restrictive rules and laws such as Pattern Day Trader rules...........The sooner US Congress acts to revert restrictive rules such as Pattern day Trader rules, the sooner unemployed and young people will get opportunities to expand themselves productively.........Pardon my Irish, Jim Cramer!

Free Texas 2012
Free Texas 2012 - Friday November 20, 2009 10:15AM EST

Yeah that first one worked so well. It is like doing something that does not work (for whatever reasons) and it not working and then doing it again expecting it to work the second time. Galbraith needs to say in the classroom where twenty year olds will believe what he has to say. Otherwise Galbraith (as well all of academia) has no place in the real world.

USADOOMED
USADOOMED - Friday November 20, 2009 10:17AM EST

If you can not make sure most of the stimulus money goes to the right place, it is better NOT to have one. Apparently, neither our beloved president nor our smart politicians can guaranty anything. In fact they are helping GS to take most our hard-working earned tax. U.S is doomed with these blood suckers siting in their chair, cheer!

Sabastian
Sabastian - Friday November 20, 2009 10:17AM EST

What an idiot.

Albert
Albert - Friday November 20, 2009 10:18AM EST

Yeah, let's keep unneccessary gov't workers. We should trim payrolls on the state and federal level. The amount of waste is out of control. Galbraith has said some things that make perfect sense but this is idiotic.

Yahoo! Finance User
Yahoo! Finance User - Friday November 20, 2009 10:19AM EST

Well thats a brilliant philosophy. I think I'll try it. Because a maxed out credit card is far less concern than having to watching a low def tv on anything but a lazyboy! Whats the point of full employment when every dime we all make has to pay back a huge debt. Krugman and Galbraith are the biggest idiots on the planet.

John S
John S - Friday November 20, 2009 10:19AM EST

This unhealthy fixation with Keynesian economics is a telltale that this has become a nation of spoiled brats. All credit bubbles result in pain, that is why they are to be avoided in the first place. Using Keynesian logic one should go out and break a leg simply because doctors can put a cast on it.

Samuel
Samuel - Friday November 20, 2009 10:21AM EST

taking a hammer to my leg at the moment

Roger P
Roger P - Friday November 20, 2009 10:22AM EST

They should invest heavily in science. Nobody wants to fund science, then they bitch that we're falling behind the rest of the world.

Brian
Brian - Friday November 20, 2009 10:22AM EST

Throw the republicans out of congress and then something can finally get done.

__A_YAHOO_USER__
__A_YAHOO_USER__ - Friday November 20, 2009 10:24AM EST

and people in He!! need ice water.....

ʞɔɐɾ
ʞɔɐɾ - Friday November 20, 2009 10:25AM EST

More excessive debit spending will fix everything. wink wink....Actually I believe the unemployed just don't count in the economy, they are like dependent children; the 85% employed spender is what counts. The unemployed spend every last cent they have, so any pittance thrown to them come right back into the economy. As the employed loosen their wallets up and get tired of being afraid, they will spend, and the economy will get better slowly but surely. Then people will be hiring again.....This all happened back in the 1970's. and it took a long time for all those young baby boomers fresh out of high school and college to get assinulated into the work force.

donfurio
donfurio - Friday November 20, 2009 10:25AM EST

GO BACK TO ACADEMIA TO CRAZY LIBERAL KEYNESIAN HACK!!!

Yahoo! Finance User
Yahoo! Finance User - Friday November 20, 2009 10:26AM EST

What we need is Chinese bankers to run our economy. Three houses of government - Bankers, Media, Politicians. Time to out source all three. Vote in 2010

donfurio
donfurio - Friday November 20, 2009 10:28AM EST

You've got to be kidding me with this guy, California is broke because they spend too much, the fed gov't should not be propping this up.

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