GOING BIG.

Check out what China's up to:

Over the weekend China unveiled a “massive” $568 billion stimulus plan to “loosen credit conditions, cut taxes and embark on a massive infrastructure spending program in a wide-ranging effort to offset adverse global economic conditions by boosting domestic demand.”The announcement sent markets around the world soaring as it eased fears of a huge dropoff in Chinese demand.This emergency spending by the Chinese government will invest “the equivalent of almost a fifth of its gross domestic product last year on infrastructure.” The $568 billion is approximately 18% of China’s $3.3 trillion 2007 GDP.An equivalent investment by the United States government in infrastructure and emergency spending would cost over $2.4 trillion, or 18% of the United States’ $13.8 trillion 2007 GDP.

To be sure, you can look at this package two ways. The first is as a stimulus bill, in which case it's far larger than anything being contemplated in the US. That makes some sense, though, as China's economy is far less stable than ours, and a sharp setback would carry with it more dire consequences. Similarly, you can understand the bill as an infrastructure investment package, and as much as America could do with some infrastructure spending, China is a 21st Century country with large territories that lack so much as roads -- it makes sense, again, that their package would be bigger. So I don't think the sheer size of their package should be over-emphasized. That said, they're also going big in part because going small could cause serious problems, as it has in the past. Indeed, this whole post is throat-clearing so I can link to Paul Krugman explaining what FDR did wrong during the Great Depression -- namely, he didn't do nearly enough to stimulate the economy, and his lack of ambition greatly prolonged the crisis. If not for the stimulus bill known as World War II, which jacked government spending to unheard of levels, it's an open question how long the depression would have lasted.