Krugman: The stimulus may very well be working, but the problem is larger than the administration thought

Paul Krugman gave an interesting explanation the other day for why more stimulus money is needed. Basically, it's not that the administration's stimulus package isn't working - very few of the funds were expected to be spent by this point, so the impact on reducing unemployment was expected to be minimal this early on. Rather, unemployment was only expected to be 8.6% (ish) around now, not in the mid 9s. Thus, it's not that the stimulus bill isn't working, but rather, the bill we already passed is trying to fix a much smaller unemployment problem. It's as if you took the right medicine, but your infection was a lot stronger than the doctor realized, so now you have to up the dose.

Again, Krugman and Stiglitz saw this coming, and warned everyone, so the administration still needs to eat some crow on that one. But, it's unfair for Republicans to say that the first stimulus bill isn't working. It may very well be working, but it was intended to fix a much smaller problem than we now have. (More from Krugman on this here.)