Krugman: Proposed debt deal will cost jobs and revenue

[Playinghardball]

Source: RawReplay
By David Edwards

Nobel Prize winning economist Paul Krugman warned Sunday that proposed spending cuts in a deal to raise the nation’s debt ceiling would end up hurting the economy.

“From the perspective of a rational person, we shouldn’t even be talking about spending cuts at all now,” Krugman told ABC’s Christiane Amanpour. “We have nine percent unemployment. These spending cuts are going to worsen unemployment… If you have a situation in which you are permanently going to raise the unemployment rate — which is what this is going to do — that’s actually going to reduce future revenues.”

“These spending cuts are even going to hurt the long-run fiscal position, let alone cause lots of misery. Then on top of that, we’ve got these budget cuts, which are entirely — basically the Republicans , ‘We’ll blow up the world economy unless you give us exactly what you want’ and the president said, ‘Okay.’ That’s what happened.”

“We used to talk about the Japanese and their lost decade. We’re going to look to them as a role model. They did better than we’re doing,” he added. “There is no light at the end of this tunnel. We’re having a debate in Washington which is all about, ‘Gee, we’re going to make this economy worse, but are we going to make it worse on 90 percent the Republicans’ terms or 100 percent the Republicans’ terms?’ The answer is 100 percent.”

Watch this video from the ABC’s This Week, broadcast July 31, 2011.

http://www.rawstory.com/rawreplay/2011/07/krugman-proposed-debt-deal-will-cost-jobs-and-revenue/

[DonCoquixote]

1. I saw this

and it was depressing to see Norquist there, whining about how this was not even close enough.

[Ruby the Liberal]

3. Krugman = Nobel Laureate Economist; Norquist = Pedigree-less Randian Ideologue

Yet one is relegated to commentary and the other holds our economy by the short and curlies.

[mzmolly]

2. What's important is when the so called cuts will take place.

If "talking" about spending cuts, increases consumer confidence, then we should be "talking" about them, yes.

[dawg]

6. I can have all the confidence in the world ...

If I don't have any money (or a job), I'm not going to be increasing my spending any time soon. All of this talk of "confidence" is bullshit.

What does the "con" in con-man stand for, anyway?

[ChiciB1]

9. Unfortunately There Are So Many Of Us Who Don't Have Money To Spend!!!

From the get-go I've NEVER been able to figure out HOW they expect to "grow" an economy when too many people can't SPEND money to help it GROW!

No Money... No Spending... To me that's pretty simple math!

[high density]

4. George Will declared Keynesian economics dead

Krugman responded we just didn't do nearly enough, as he argued at the time the stimulus was being crafted.

There has been no discussion about the fact that the Republican plan to create jobs with tax cuts has not worked for the past decade. Yet this along with spending cuts are being accepted as a viable path (if not the only path) forward.

[adhd_what_huh]

5. Krugman = Debbie Downer

[dawg]

7. Yep, and he's been wrong at every turn.

The stimulus was more than enough. The Bush tax-cuts for the rich expired on schedule. Unemployment is back down to acceptable levels, and the President is a shoo-in for re-election.

Oh, wait. That's a different universe.
My bad.

[adhd_what_huh]

8. I didn't say he was wrong....geesh. He just doesn't understand the politics

of the situation.

[neverforget]

10. No he's just an economist

[liberal_mama]

11. I guess we'll see soon if the economy perks up

or gets way worse with the spending cuts.

[dawg]

12. He's not supposed to understand the politics, that's for the politicians.

He's an economist. He's just telling it like it is.

But the politicians, at least the ones on "our" side, seem to understand neither the politics nor the economics. We don't seem to be drowning in success on either front right now.

[adhd_what_huh]

13. I don't think Krugman is saying anything the White House

is not fully aware of. The White House has a responsibility to get us passed this Tea Bagger congress and re-take the house. If we could do just what we wanted to do then everything would be great, but alas we cannot and our first priorty is defeating the Pukes and Tea Baggers. This really is total war.

[dawg]

14. If we're trying to score a political victory ...

I think we are shooting ourselves in the foot. I could be wrong. I'm not a professional politican either.

The political results will speak for themselves, just as the economic results are already doing. We'll see, won't we.

[Stuart G]

15. k & r thanks for posting...nt

[senseandsensibility]

16. Of course it will.

But facts are inconvenient and will not be mentioned by the corporate media or the politicians, except a very few.