Felix Martin, an economist at Thames River Capital LLP, worked at the World Bank for two stretches between 1998 and 2008. He was formerly an executive board member and analyst at the European Stability Initiative. (April 2011)

For a National Investment Bank

President Obama is in a bind. He knows that the economic recovery is fragile and dependent on continued fiscal stimulus—hence the bipartisan deal on further tax breaks he brokered in December. But he also knows that the tolerance in Washington for deficits of close to 10 percent of Gross Domestic …