I'm reading through some of his archives, and came across this very compelling claim

I wonder if Konczal realizes that even Krugman doesn’t go that far. Indeed Krugman recently argued we could avoid liquidity traps with a higher inflation target. There’s absolutely no benefit to big government if you are trying to avoid “depressions.” Last time I looked most of the “depressions” were located in Western Europe, which (coincidentally) has the largest governments in the developed world.

In contrast, Australia has one of the smallest, and had no recession. And Hong Kong has a rigid dollar peg, which exposed it to huge demand shocks in 1997 and 2001, and yet it avoided “depressions” despite having the smallest government sector in the entire developed world. Maybe it was those flexible labor markets that the liberals insist will only make a depression worse. But they’d reply that it’s better to have inflexible labor markets, like Greece and Spain.
http://www.themoneyillusion.com/?p=21332