Some left-leaning economists like Paul Krugman strongly advocate such spending, pointing out that Japan's tightening its purse-strings probably deepened that country's problems.
In fierce opposition, right-leaning economists point out that Germany has remained fiscally responsible and is doing well, while countries like Greece have had free-spending governments and have been the worst hit.
While reading yet one more article on this by Krugman in the NY Times, a thought dawned on me and I posted a comment (which I hope Krugman read!)
It seems to me that recovery from a major slump is ideally built around a theme of some sort, that businesses and individuals can rally around. Perhaps the theme may or may not involve major deficit spending.
A world war, a historic decision by businesses and trade unions to be flexible*, an appeal to the national character, an astrological prediction of a bountiful year, even a world championship win in a popular sport - in different contexts and cultures these could all be themes that pull an economy out of recession.
*as in Germany
You can see this in India. A lot of the richer people believe India is shining, so it is not doing badly overall. Currently growth seems to be a seriously lagging indicator of the stockmarket indices, rather than the other way around.
In the US, people and businesses are currently pessimistic, so the situation is worse than it might have been. There are fundamental problems - primarily too little genuine education and too much soundbite TV - but these are not insurmountable.
Perhaps the US should have been allowed to win the soccer World Cup?
