Here we have him talking about the economic cycle since 2011. Still a bit soft, but clearly we are out of the woods, is a good summary. He wants to apply a bit of the old fiscal push just in case.
Krugman: The point is that these are, again, asymmetric risks. A little crowding out wouldn’t kill us, given how badly we need infrastructure investment. On the other hand, if we do slide back into a liquidity trap we would be badly hurt by not having the public investment we could have had, helping to prop up demand as well as serving other purposes.
Or to put it another way, given where we are in the macro situation public investment, in addition to its usual benefits, would provide valuable insurance against the all too possible return of the zero lower . It’s not quite as slam-dunk a case as it was in, say, 2013, but it’s still very strong. It’s still time to borrow and spend.
Now, it seems to me he is a few years late, always has been. A good Kanosian would start the fiscal stimulus now in order to be counter cyclical to the recession now likely around election time. 2013 was way past the 'v'. But being a good Kanosian still fails, all the agents figure out how to restore counter-cyclicity.
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