Not so good anti-anti-stimulus arguments

In a recent post on his blog, Paul Krugman takes issue with the anti-stimulus argument that additional government spending is bad because economic theory says that privately allocated spending is more welfare-enhancing, and therefore tax cuts are preferable. Krugman's claim is that stimulus spending is about public goods not private goods. And, he writes, "there's nothing, even in Econ 101, that clearly favors (sic) private spending on private goods over public spending on public goods."

But, I ask, if it is economically desirable to increase expenditures on public goods, doesn't this imply that current expenditures are already below the optimal level? If this is true then what governments ought to be doing is permanently increasing their spending in those areas. Public goods should be provided at the economically efficient level whether we are or not we are in a recession. So Krugman's argument is not so much an argument for a spending-based "stimulus" as it is for a government that fully performs it's public good function.

When it comes to an actual stimulus, the government should be primarily focused on boosting demand where it has actually fallen. So if the current crisis is mostly a shock to consumer demand, then shouldn't the government be chiefly engaged in re-igniting private consumption? Which is a reason why a temporary GST reduction (with a phase-out!) and an EI expansion are the best policies.