Paul Krugman headed to White House‽

asymmetric-effects:

To what degree would we think Obama is going to push for stimulus though? I suppose he doesn’t need to be worried about reelection and that might give him looser purse-strings, but I’m just not convinced. The record, since early 2009, has been to “wait it out.” Also, to what degree is stimulus useful this late in the game. In particular, I’m unsure of how I would feel about additional stimulus. Clearly there are issues (ahem, unemployment —or better unemployment, underemployment and marginally attached workers). These are issues that items like Quantitative Easing cannot directly address. But it’s really difficult to (a) understand to what degree our slow recovery stems from structural issues and (b) know whether stimulus at this point would give a good return on investment.

Additional stimulus would be useful at this stage, provided it is well-targeted and ends up in the pockets of people most likely to spend it quickly. You might want to go on a health kick, but the best time to start dieting and working out isn’t when you’re slowly recovering from pneumonia.

(I speak in metaphors because I’m a writer, not an economist.)

andrewgraham