Happy New Year: may it not be depressing

We're in a new realm of economics. This is what the 2008 Nobel Prize winner in Economics, Paul Krugman, has to say:

"the analysis of John Maynard Keynes, who argued that monetary policy is ineffective under depression conditions and that fiscal policy — large-scale deficit spending by the government — is needed to fight mass unemployment."

Martin Feldstein, Chairman of the Council of Economic Advisers under President Reagan, agrees on the urgent necessity of a large fiscal stimulus. Feldstein wants to see a stimulus of US$200-300 billion a year in each of 2009 and 2010.