Krugman: U.K. Government Should Be Spender of Last Resort

Nobel laureate Paul Krugman said the U.K. government should drop its commitment to fiscal cutbacks and boost spending to avert an extended downturn in the economy.

In a “depressed economy” officials should realize that “this is the time for the government to act as the spender of last resort,” he said yesterday in a speech at the London School of Economics. “Supplement that with exotic monetary policy. If you want to worry about debt and deficits, fine, but this is the time, to quote St. Augustine, to say ‘Oh Lord, make me chaste and continent, but not yet.’”