for the hangover theory is disastrously wrongheaded. Recessions are not necessary consequences of booms. They can and should be fought, not with austerity but w

for the hangover theory is disastrously wrongheaded. Recessions are not necessary consequences of booms. They can and should be fought, not with austerity but with liberality—with policies that encourage people to spend more, not less Ten years later, well. We are coming out of a situation where 40,000/year salaries could get you a mortgage on a 400,000 dollar house. There are 101 reasons why that situation emerged, and most of them are directly related to prior policies to get people to buy "more". Sure, it would be stupid to suggest a repeat of this process as a solution. Krugman isn't stupid. Read the "stimulus" bill. Most of it doesn't even pretend to address the situation at hand. It's a list of very expensive programs that Democrats and their lobbyists have always wanted. Krugman approves of this, why not? The same thing happened with the "Patriot" bill and the TARP. Crises are useful.