WASHINGTON, Oct. 22 (Xinhua) -- It will take several years to achieve full employment in the United States, as the post-crisis recession tends to be protracted, U.S. Nobel Prize-winning economist Paul Krugman warned Monday.
The U.S. economy seems to be recovering in earnest, with housing on the rebound and job creation outpacing growth in the working-age population, "but the news is good, not great," as the recovery is slow and tepid, Krugman said in article carried on Monday's The New York Times.
Financial crises are typically followed by years of high unemployment and weak growth, he said, adding that crises are usually preceded by credit bubbles, and when those bubbles burst, many families and companies are left with high levels of debt.
Such a scenario forces them to slash their spending, which in turn depresses the economy as a whole, he added.
"What the economy really needs after a financial crisis is a temporary increase in government spending, to sustain employment while the private sector repairs its balance sheet," noted Krugman.
Noting that the Obama administration did some of the task to cope with the financial crisis, he said that the stimulus plan was both too small and too short-lived.
That was partly due to administration errors, but mainly because of scorched-earth Republican obstruction, he said.