Paul Krugman on fiscal expansion

In It Depends on the Situation Paul Krugman makes a good point.

Today’s case in point: by now, five years into the financial crisis, you might have imagined that people would stop spouting this line: “You say government spending can create jobs — but then why isn’t Greece booming? Huh? Huh?”

You might think that by now people would have gotten the conditional nature of the claim: fiscal expansion has a positive effect if the economy is depressed and monetary policy won’t move to offset it — typically, if the economy is in a liquidity trap. It’s not as if the advocates of fiscal stimulus haven’t made this point again and again, all the way back to Keynes’s dictum that the boom, not the slump, is the time for austerity. But noooo.