Krugman: 'There Is No Light At The End Of This Tunnel'

[cal04]

10:55 on the timeline
http://www.huffingtonpost.com/2011/07/29/debt-ceiling-deadline-default_n_913809.html#411_krugman-there-is-no-light-at-the-end-of-this-tunnel


New York Times columnist Paul Krugman said Sunday that the debt deal will worsen the current unemployment situation and the nation's long-run fiscal situation.

"From the perspective of a rational person -- in other words a progressive -- we shouldn't be talking about spending cuts at all now," Krugman said during a roundtable discussion on ABCNews' This Week With Christiane Amanpour. "We have 9 percent unemployment. These spending cuts are going to worsen unemployment. It's even going to hold the long-run fiscal picture because we have a situation where more and more people are becoming permanent long-term unemployed."

Krugman's not alone in his opinion: Last week, economic forecasting firm Macroeconomic Advisors analyzed Republican and Democratic debt proposals and said either plan would significantly slow economic growth if enacted.

"We used to talk about the Japanese and lost decade," Krugman continued. "We'll look at them as a role model. They did better than we're doing. this is going to go on. I have nobody I know who thinks the unemployment rate will be below 8 percent at the end of next year. With the spending cuts it might be above 9 percent at the end of next year. There is no light at the end of this tunnel. We're having a debate in Washington, all about, 'Gee, we'll make the economy worse, but will we make it worse on 90 percent of the Republicans' terms or 100 percent of Republicans' terms?' The answer is 100 percent."


Paul Krugman's comment on this
Update update: I’ve already gotten a fair amount of abusive email over this morning’s appearance, so I must have done well.
http://krugman.blogs.nytimes.com/

[coalition_unwilling]

1. Someone here had the gall a couple days ago to claim that

professional economists had 'debunked' Keynes, a claim that itself was rapidly debunked.

Except for Krugman, Stiglitz and a few other prophets without a country, Keynes has been silenced. But he has not been debunked. I now predict an official unemployment rate of >10% by November 2012, with U6 approaching 25% by then.

[n2doc]

16. On the contrary, Keynes has been vindicated by the present crisis

The big problem is that lots of economists have ceased to look at reality, and instead have gone over to the "let's make crap up" school of Republican politics.

[Remember Me]

23. I've always heard that the Depression had 25% unemployment

back when they didn't play with the numbers like they do now.

Someone posted this photo collection the other day and I found it quite sobering:
http://www.english.illinois.edu/maps/depression/photoessay.htm

[nadinbrzezinski]

25. I'll raise you two percentile points

but I am not a happy camper... 12% will not shock me

[xchrom]

2. Recommend

[Better Believe It]

3. K & R

[Doctor_J]

4. The Repukes are shooting for 9% or more next November

instead of fighting them, the president has gone along with every treasonous move.

[TwilightGardener]

5. Problem is, how do you convince voters that the economy doesn't work

like a family budget? Most people have bought this frame--that when you have financial troubles, you stop spending. Krugman's message is counterintuitive to average Americans, and the Republican frame has been winning for 30 years.

[tigereye]

13. yes, I have found that comparison highly exasperating

and the folks funding the TP goons know that they are not the same. :(

[girl gone mad]

22. ask them where the money to pay off the deficit or shrink the debt comes from.

I think when you do that, most people realize the money would be coming out of the private sector.

[ej510]

6. The Unemployment rate is 20% now and will be 30% or more by 2016.

[Loge23]

7. In any crime, look for the motive.

The right-wing has absolutely natural desire to see the economy approve.
Their corporate constituents are raking in record profits, the labor movement is non-existent, and a poor economy is extremely advantageous to their political aspirations. Why would they want to change anything, unless to hasten the deterioration?
We're in the fifth year already of the decline and it certainly looks like we're deep in the tunnel. The Republican agenda is not based on restoring prosperity to the rank and file of this country; it is about reshaping the country in it's own sci-fi (read: Randian) based scenario of their own warped vision of an economic Eden - call it neo-Feudalism, complete with McCastles.

As for the left of us, the political option is no longer a viable change mechanism. I'll leave it at that.

[suffragette]

8. Agree. We're being "restructured" and this is one of the outcomes

for other nations enacting these "austerity" measures.


K&R

[abelenkpe]

9. We should not be cutting jobs

I understand republicans have a desire to cut government jobs but doing so is suicidal. It will ripple out into communities, more unemployed families will lead to fewer people paying taxes, more requiring government assistance, fewer people buying goods and services leading to job losses in the private sector. In short kicking off another deflationary cycle just as the cost of energy climbs squeezing the working class from both sides. It is an act of insanity! And if that isn't enough they want to add in triggers for cutting Medicare and social security knowing full well the cuts spending cuts will cripple the economy making cuts to medicare and social security a reality? But this is the reasonable approach?

[Tesha]

10. So in other words, this was the Republicans locking-down the election of their Presidential....

...candidate in 2012 via the higher unemployment that's sure
to be occurring by then.

Well played, Democrats, well played! You got rolled again!

Tesha

[banned from Kos]

11. Baby Bush bankrupted us and President Obama has the consequences dumped

onto him.

By "bankrupted" I mean the federal government - of course we are a wealthy nation otherwise.

[nashville_brook]

12. the only crisis we have is JOBS -- the so-called deficit is RW gamesmanship

i just CAN'T FUCKING WAIT for the campaign when all the pols line up to declare how much they're in favor of j-o-b-s...the fucking liars.

[BiggJawn]

14. K-thug's not exactly right on this. there *IS* a light at the end of the tunnel...

An oncoming train.

[Shandris]

15. A musical selection for your consideration.

Rather short, powerful, and, from my perspective, telling.

http://www.youtube.com/watch?v=kbTUQB1ingc

[Lorien]

17. The unemployment rate is way over 8-9%. About 1 out of every four people I know

are unemployed-and most of my friends have college educations, many with advanced degrees. I'm sure that rate is far higher among other groups. Hell, along one branch of my family tree all but ONE are unemployed (most work in the film industry or sciences). The vast majority of my self employed friends and family members are either unemployed or underemployed-which doesn't even get counted by the government unless they report no income on their tax returns (and usually they get a couple of jobs during the year, but not enough to pay their basic bills). We simply aren't hearing the word "jobs" from politicians unless it's used in the disingenuous term "job creators", which is laughable.

[Urban Prairie]

18. The debt deal is just yet another step further in the long-term planned Rethug goal

of their desire for accelerating the utter destruction of the Democratic Party by deliberately and intentionally attempting to further impoverish and deny government assistance for more and more of its voter base. Homeless, sickened, uninsured and hungry/starving people obviously can/do NOT contribute to or can provide any type of assistance for their campaigns, much less having the ability, will, or energy to register and vote,

[Blasphemer]

19. Everything coming out of D.C. right now is absolute rubbish and everyone there knows it

They don't care. Honestly, how can they pretend that they care about the economy if they continue to enact policy that will make it worse? A lost decade creating several lost generations. History will not look well on this period. The Bush years were bad but the failure to fix what was broken will be 1000x worse.

[Lasher]

20. I watched part of the show today.

I like to watch Krugman take apart the talking points that Norquist and Will recite. They're not used to it and they don't like it. They also have not answer to defend themselves because they're full of shit.

I wish Robert Reich would have been on the panel instead of George Stephanopoulos.

[Major Hogwash]

21. Krugman is one of the smartest economists in the entire country! He's right on the money!

One of the few economists who truly understands the delicate balance of trade and the effects on our economy as a result of NAFTA being passed and then NONE of the safeguards in it being used to regulate it.
Fair trade, not free and out of control, trade is what Clinton signed, and it has been warped and twisted into a monster of its own creation!!

[progressoid]

24. k/r