I do feel a sense of despair here. Ever since the crisis began, some of us have been trying to get across the point that you have to be very careful with your historical precedents, that things work very differently when you have a synchronized severe financial crisis, with interest rates near zero everywhere. And here we are, two years in, and its as if weve been talking to a wall.
Krugman is right here. Concerns about inflation and debt need to take a back seat to concerns about unemployment and aggregate demand.