Book Review: End this Depression Now! by Paul Krugman

Today I finished reading “End this Depression Now!” by Paul Krugman. In this book, Paul Krugman argues for fiscal expansionary policy with the objective of ending the depression. This is an excellent book that argues this side of the economic debate in layman’s terms, while at the same time addressing the “Austerians” objections to a strong expansionary policy.

This book can be broken up into several different topics that the book is not formally split into. First, the sources of the current problems, the economics behind the problem,  objections to expansionary fiscal policies, differences between the United States’ and Europe’s crisis, and solutions.

Krugman’s arguments are derived from history and basic Keynesian economics. However, most of the book deals with the objections to Keynesian Economics. The objections to an expansionary fiscal policy that Krugman addresses are:

1. Experience shows that fiscal stimulus doesn’t work.
2. Bigger deficits would undermine confidence.
3. There aren’t enough good projects to spend on.

These objections are adequately addressed, however there are a few assumptions that would need to be examined more in depth to complete his arguments and convince many. For example, Krugman only briefly discusses why he believes the United States is in a liquidity trap and he also only briefly discusses why government expenditures created through the accumulation of debt have a net positive impact on the economy in the long run. The book is based on these two issues, but they are not discussed in depth. Another issue that he stated in the beginning of the book that he would address was how the government could flood the economy with an expansionary fiscal policy and then successfully decrease the level of government involvement in the economy without resulting in a contraction. However, an adequate analysis of these issues would probably be beyond the scope of the text. There are many other objections to Keynesian economics, but Krugman does address the most important ones in today's political arena.

Krugman is critical of the Obama administration for not seeking a sufficiently expansionary policy that would actually rescue the economy. However, most of his criticism is directed at Republicans because of their opposition to expansionary fiscal and monetary policy. But he does not particularly target either party, rather he targets a line of thought that he names. For example, he uses the terms ‘deficit hawks’ and ‘bond vigilantes,’ to refer to people who are trying to reduce deficit spending during a recession. 

This book is dedicated “[t]o the unemployed, who deserve better.” And rightly so, few other objectives are as valuable as decreasing unemployment in the field of economics.

Overall, I would rate this book 9.5/10. While one might not necessarily agree with all that Krugman argues or states in this book, it is worth the read so that one is familiar with the fiscal expansionist point of view and the arguments for their policy.

Either way, Krugman probably got a kick out of this comic with all of his callings for a fake alien invasion.