Did Big Government avert a Depression?

"So it seems that we aren't going to have a second Great Depression after all," said Nobel Prize–winning economist Paul Krugman in The New York Times. "What saved us? The answer, basically, is Big Government." Generous federal spending was just what the economy needed—and just what was missing in 1930—to stop "the plunge."

Don't listen to Paul Krugman and the other "Keynesian clowns," said Mike Mish Shedlock in Minyanville. Krugman and Federal Reserve Chairman Ben Bernanke think the solution is to "throw money at problems," but "financial Armageddon" could still come. If anything, the stimulus schemes favored by Krugman and Bernanke will only "drag this mess on for another decade, just as happened in Japan."

The stimulus-loving Paul Krugman is hardly an impartial bailout referee, said Glenn Hall in TheStreet.com. But he does acknowledge that budget deficits are "a bad thing in normal times." Let's hope Krugman and other fans of Big Government spending in the current crisis have "enough of an independent streak to throw down a flag if deficit spending continues when normal times return."

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