From Paul Krugman,
We currently have a deeply depressed economy [and] will probably have a depressed economy through 2013 as well, if not beyond.
The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record.
OK, I remain uncertain, albeit skeptical, on the issue of stimulus and open to persuasion, so I’d love to look at some of these many examples. Unfortunately, Krugman doesn’t actually mention any of them; he only says they exist. No specific cases. No authors. No linkies. No hints. Nuthin’.
It sounds mysteriously like that vast number of civilizations that collapsed because they abandoned traditional marriage. I’m always hearing that there’s a long list, but nobody’s ever given me an example of that, either.
And I’m not the only one who wishes Krugman would be a little more specific (check out his link to Alesina’s counter-factual findings).