If repetition doesn’t improve the argument, try escalation. Paul Krugman, Princeton’s Nobel laureate-turned-columnist, has been haranguing the Europeans, and the Germans in particular, to drop their fiscal tightwad act: Don’t cut government spending, keep the deficits rolling. When Chancellor Angela Merkel ordered $ 100 billion in cuts and new taxes, Krugman warned her that she might end up worse off than Herbert Hoover—like Heinrich Brüning, Germany’s Reich chancellor from 1930 to 1932, “whose devotion to financial orthodoxy ended up sealing the doom of the Weimar Republic.“

That didn’t impress Merkel or her fellow Europeans, among them Nicolas Sarkozy of France and David Cameron of Britain. The French president imposed savings of $120 billion, and his British counterpart cut $190 billion (over the next several years). So Krugman escalated. If the “Great Depression” wouldn’t work, how about the “Long Depression” that American economists date from 1873 to 1896—a slew of panics and crashes bouncing back and forth across the Atlantic, interrupted only by weak growth. “We are now, I fear, in the early stages of a third depression,” which, according to the Cassandra of the New York Times op-ed page, will probably look like the nineteenth-century version.

How shall we count the ways in which the current phase is different from the Big D’s that tormented the nineteenth and twentieth centuries? Let’s start with the policies of governments. The folks who ran them back then didn’t know about macroeconomics, let alone about John Maynard Keynes, who taught us a few things about deficit spending. So the Hoovers and Brünings opted for austerity and zero deficits while their central banks turned off the money tap. Today, this is known as “pro-cyclical” policy, which deepens the slump.

As John Kenneth Galbraith, no deficit slouch he, put it with mild irony in his classic The Great Crash, 1929: Since then, “there has been a modest accretion of economic knowledge. A developing depression would not now be met with a fixed determination to make it worse.” In the fall of 2008, all governments—from Berlin to Beijing, with Washington in the lead—went into massive overspending from 3 to 5 percent of GDP. Today, the result is a double-digit U.S. shortfall that resembles Greece’s, and a German deficit approaching 6 percent, almost twice as much as permitted by the guardians of the euro.

The “fiscal orthodoxy” of the Europeans is anything but Brüning and Hoover rolled up into one. Good Keynesians, they’re merely reducing their astronomical deficits, not eradicating them. They intend not to slam on the brakes, but merely to ease up on the accelerator. It’s deep-red deficits as far as the eye can see.

What about the European Central Bank, the Fed’s counterpart? Tight money poisoned the fitful recovery during the L-Depression, and it triggered the G-Depression after the collapse of the Austrian Creditanstalt. Today, the world is awash in liquidity while interest rates remain at rock bottom, where they will stay.

Apart from a “modest accretion of economic knowledge,” there is the vast expansion of the modern welfare state. In the '30s, it was an embryo; in the nineteenth century, it still awaited conception, at least outside the Bismarck Reich. Today, even the United States boasts “automatic stabilizers,” such as unemployment benefits that rise in a recession, and social security benefits that deliver permanent incomes. In the most generous welfare states like Germany, public transfer payments of various kinds add up to one-third of GDP.

Above all, stimulus packages don’t deliver much stimulus. The U.S. will run a deficit of $1.5 trillion this year, and unemployment has hardly budged. If you want to know why, look at recent research like “New Keynesian Versus Old Keynesian Government Spending Multipliers,” by a team at Stanford (NBER Working Paper No. 14782) and at the data analyzed by Harvard’s Edward L. Glaeser.

Meanwhile, the new orthodoxy of the White House (“spend, spend, spend”) is beginning to crack, as Obama’s political advisers urge the President to listen not to Krugman, but to the rising public anger about deficits. Maybe Mr. Obama should also keep in mind his Grand Guru Keynes who wrote in his laborious prose in 1937: “Just as it is advisable for the Government to incur debt during the slump, so for the same reason it is now advisable that they should incline to the opposite policy.”

Josef Joffe is editor of Die Zeit and a senior fellow of the Institute for International Studies, and an Abramowitz Fellow at the Hoover Institution, at Stanford.