In fact, raising interest rates at the moment, a mistake made during the Great Depression, is contra-indicated. And that will still be so as long as unemployment runs high. Additional stimulus would not lead to near-term inflation, he argues. You can see Krugman's more wonkish version of exactly when interest rates should be raised to stave off inflation here.

DeLong convincingly explains in detail why adding fiscal stimulus now will have a favorable multiplier effect that boosts the economy by generating jobs as well as increasing tax revenue without increasing inflation and a need for raising interest rates.

How much should the stimulus be?

Last December, Lawrence Summers and the rest of Obama's incoming National Economic Council feared that increasing the size of the stimulus program from $800 billion to $1.2 trillion would bring the above [inflationary] factors into play. It is now reasonably clear that they were overly pessimistic about the effects of additional short-term government spending, in large part because they were overly optimistic about the state of the economy. So how much should the government spend? I would favor starting with $100 billion next month, and continuing with an additional $100 billion every month thereafter. Meantime, we should keep an eye on the bond market and inflation forecasts. As long as the terms on which the U.S. government can borrow are exceptionally advantageous, and the unemployment rate remains exceptionally high, the benefits of government spending will continue to be exceptionally large.

Anyone who still thinks additional well-targeted stimulus is not required need not go far to find reasons to change his or her mind, as AnswerLady makes clear.

There is also Economic Policy Institute President Lawrence Mishel's testimony to the House Ways and Means Subcommittttee on Income Security and Family Support last Thursday.

The situation, he said, is grim. The numbers have become familiar, each new set breaking records not seen for decades, often since the Great Depression. There are 15.1 million officially unemployed, 26.6 million if you count the discouraged and the underemployed. Some 5.4 million have been out of work for more than six months; 2 million for more than a year. Six million are receiving unemployment compensation, but only 40% of those out of work are covered by these benefits in the first place. Some 44% of households have seen layoffs or cuts in pay or hours. Record numbers of Americans are on Food Stamps. New foreclosures loom. Bankruptcies, even though they are harder to come by these days, are soaring.

The tepid recovery that even many optimists think we will see develop over the next year means those unemployment and associated numbers are likely to stay high through 2011, perhaps over 8%.

Mischel argues for a second, or improved, stimulus:

Additional aid should be provided to the hamstrung state governments, dozens of which are facing new deficits on the heels of last year's.

Direct creation of public service jobs should be initiated. In 1978, Congress funded jobs for 750,000 people. A larger program is needed now. "Any unemployed worker should be eligible; the jobs should pay prevailing wages; and great care should be taken to prevent displacement of public employees. Such a program can be targeted at distressed communities and will be needed for many years to come as unemployment remains high."

A job tax credit should be enacted that would refund 10%-15% of wages paid for each new hire over the next two years.

More should be spent on infrastructure. "The $13 billion of Recovery Act highway and transit funds under contract have created 122,000 job months already, a number that is doubling each month. The nation’s schools could quickly and effectively spend $10 billion on repairs and maintenance alone, putting to work some of the million

and a half construction workers who remain jobless."

These unemployment and associated statistics are only part of the economy's malaise, however. And an additional stimulus will not deal with structural problems.

Chief among these are interconnected income inequality, outsourcing/off-shoring and and the productivity disconnect.

Since 1973, productivity has soared, but workers have received only a tiny fraction of the increased earnings. In fact, during the weak "recovery" of 2002-2007, they got none of it. The top one-tenth of 1% of U.S. households (13,000 of them) took nearly a third of all income growth since 1989. The bottom 90% got 16%.

No stimulus - old or new - will resolve that inequality and the destruction that it creates. That will take a new attitude from our leaders, which will require a big push from the bottom up.