Paul Krugman, the Nobel Prize-winning Princeton economist and New York Times columnist, said Tuesday that the United States needs to spend on a scale similar to World War II in order to escape an extended economic slump.
“What we need is actually the financial equivalent of war,” he said during a talk at the 92nd Street Y in Manhattan. “What actually brought the Great Depression to an end was the enormous public spending program otherwise known as World War II.”
World War II boosted government spending to 42 percent of total U.S. output, according to the Congressional Budget Office. Krugman said that while a fiscal stimulus program does not have to be on the scale of World War II, ideally it would involve “useful” infrastructure projects such as repairing bridges and sewer systems and building a railway tunnel between New Jersey and New York.