In his column Monday, the New York Times' Paul Krugman argued against raising interest rates, claiming that "America is facing growing drag from the weakness of other economies," something that its "not-so-bad economy" isn't ready to handle.
According to Krugman, the United States economy only survived the Great Recession because "the Fed and the White House mostly worried about the right things," and even though "[t]heir actions fell far short of what should been done," the "no-so-bad" measures they did take -- the 2009 stimulus et al -- prevented America from spiraling into an economic crisis comparable to the one currently plaguing Europe.
As Krugman argued,
The result of these not-so-bad policies is today’s not-so-bad economy. It’s not a great economy, by any measure: Unemployment is low, but that has a lot to do with a decline in the fraction of the population looking for work, and the weakness of wages ensures that it doesn’t feel like prosperity. Still, things could be worse.
And they may indeed get worse, which is why the Fed’s likely rate hike will be a mistake...