Recently, several media commentators as well as politicians have been championing what the Center for American Progress Action Fund’s Matthew Yglesias dubbed “neo-Hooverism” — the notion that the next president should significantly curb spending due to the financial crisis. While it was certainly a mistake for the Bush administration to amass such huge deficits, the severity of the current economic crisis calls for loosening of fiscal restraint. Nobel Prize-winning economist Paul Krugman explained, “[R]ight now, increased government spending is just what the doctor ordered, and concerns about the budget deficit should be put on hold.” “[I]t is clear that additional federal supports are required to help jump start our economic recovery and lay the foundation for long-term growth,” said Gov. Arnold Schwarzenegger (R-CA) yesterday. Sen. John McCain (R-AZ), however, is defying the advice of the economists, proposing a drastic reduction in government spending. “And I’ll cut spending,” he said. “I will keep [Americans] taxes low.”

From The Progress Report