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Krugman: "We Shouldn't Even Be Talking About Spending Cuts At All"

Nobel Prize winning economist Paul Krugman: "The first thing is, we shouldn't even -- from the perspective of a rational person, in other words a progressive on this stuff -- we shouldn't even be talking about spending cuts at all now. We have 9 percent unemployment. These spending cuts are going to worsen unemployment. That's even going to hurt the long-run fiscal picture because we have a situation where more and more people are becoming permanent long-term unemployed. And if you have a situation in which you are going to permanently 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. And then, on top of that, we've got these budget cuts which are entirely -- basically the Republicans said, 'We'll blow up the world economy unless you give us exactly what we want.' And the president said, 'OK.' That's what happened."

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