From GS economists:

"Our recently released Global Economics Paper No. 200 entitled "No Rush for the Exit" argues that policymakers should react to the combination of a sluggish recovery and declining inflation with additional policy easing, either via a return to unconventional monetary policy or via further fiscal stimulus.The obvious counterargument is that monetary and fiscal easing carries long-term costs in the form of, respectively, a risk of a renewed asset bubble and a higher public debt burden. But our study shows that these costs look far from prohibitive at present. On the monetary side, US financial markets are nowhere close to bubble territory. On the fiscal side, it is difficult to argue that the US government has reached the limits of its debt capacity when long-term bond yields are low and falling, and when federal interest payments stand at just 1½% of GDP. When compared with the risk of a renewed economic downturn and/or a descent into deflation, the cost of additional stimulus seems to be well worth paying."

-WSJ Source

The recent July 5 note echoes arguments made by Krugman numerous times at his NYT blog.

After recently talking with a colleague, I find the current environment analogous to a wide receiver in football thinking about the running downfield and the defensive backs coming for him before he even catches the ball. Knowing the open route is certainly important, but he should first and foremost concentrate on the task at hand- catching the ball.

There is little doubt we will have to make some hard services cuts in the future, in addition to raising taxes. Our sovereign and municipal debt loads are a future economic hazard. But the immediate hazard is high unemployment amid tepid growth while teetering on the edge of deflation. Let's not drop the ball and concentrate on the task at hand. We are already aware of the danger downfield.