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STIMULUS MATH….Goldman Sachs says we’re about to suffer the deepest recession since World War II, with unemployment expected to top 8.5% next year and maybe inching a little higher in 2010. So how big should a stimulus package be given the size of the economic tsunami we’re headed into? Paul Krugman tells us today that since Okun’s Law suggests that every point of unemployment above 5% represents a 2% output gap, an 8.5% unemployment rate means that the economy is performing 7% under its potential:

So we need a fiscal stimulus big enough to close a 7% output gap. Remember, if the stimulus is too big, it does much less harm than if it’s too small. What’s the multiplier? Better, we hope, than on the early-2008 package. But you’d be hard pressed to argue for an overall multiplier as high as 2.

When I put all this together, I conclude that the stimulus package should be at least 4% of GDP, or $600 billion.

Given the likely length of this recession, we’ll probably need nearly this much again in 2010. Call it an even trillion bucks when it’s all said and done.

As recently as a few months ago that would have seemed unimaginably large to me. Today, not so much. Stimulate away, President Obama.

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REAL QUICK, REAL URGENT

Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

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