NP - Structural w/ Austerity or Demand-Lack w/ Stimulus?

[David Morris]

http://www.nytimes.com/2012/05/11/opinion/krugman-easy-useless-economics.html?_r=1&ref=opinion

Krugman:

What does it mean to say that we have a structural unemployment
problem? The usual version involves the claim that American workers
are stuck in the wrong industries or with the wrong skills. A widely
cited recent article by Raghuram Rajan of the University of Chicago
asserts that the problem is the need to move workers out of the
“bloated” housing, finance and government sectors.

Actually, government employment per capita has been more or less flat
for decades, but never mind — the main point is that contrary to what
such stories suggest, job losses since the crisis began haven’t mainly
been in industries that arguably got too big in the bubble years.
Instead, the economy has bled jobs across the board, in just about
every sector and every occupation, just as it did in the 1930s. Also,
if the problem was that many workers have the wrong skills or are in
the wrong place, you’d expect workers with the right skills in the
right place to be getting big wage increases; in reality, there are
very few winners in the work force.

All of this strongly suggests that we’re suffering not from the
teething pains of some kind of structural transition that must
gradually run its course but rather from an overall lack of sufficient
demand — the kind of lack that could and should be cured quickly with
government programs designed to boost spending.