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Paul Krugman is doing the rounds on his book tour (I saw him speak here Tuesday night – yeah, I’m a dork, I got him to autograph my copy) and here he is on Democracy Now! to pound the drum for government spending. Oddly enough, Krugman’s been accused of supporting austerity cuts, which just isn’t true. For an hour, all he did was talk about how the government needed to spend our way out of this.

AMY GOODMAN: Well, for the remainder of the hour, we’re joined now by one of the world’s leading economists, Paul Krugman. He is a Nobel Prize-winning economist, an op-ed columnist for the New York Times, also professor of economics at Princeton University and centenary professor at the London School of Economics. His latest book is End This Depression Now!

Paul Krugman, welcome back to Democracy Now!

PAUL KRUGMAN: Good morning.

AMY GOODMAN: How do we end this depression now?

PAUL KRUGMAN: Spend. I mean, it’s really—it’s actually—the economics is really easy. If we were to spend more money at the government level, and actually, at this point, largely, just rehire the schoolteachers, firefighters, police officers who have been laid off in the last several years because of cutbacks at the state and local level, we would be a long way back towards full employment. Other things to do, we could talk about monetary policy, debt relief for homeowners and students. But the core of it is, right now, there just is not enough spending, and we need the government, which can do it, to step in and provide the demand we need.

AMY GOODMAN: To say the least, you’re going against the accepted dogma on all television among the so-called leaders of our country. Spend? In a time when the government has the debt the size it has?

PAUL KRUGMAN: Right. So you can always say, “Oh, you know, $14 trillion.” Everything about the U.S. economy is huge. Investors don’t think it’s a problem. Investors are willing to lend the U.S. government money at 1.8 percent interest. This is not the time. I’ll be all for worrying about the budget deficit once the—once the economy is off the bottom. But it is not off the bottom. We are in a depression. This is the time to spend.

AMY GOODMAN: Where do you get the money?

PAUL KRUGMAN: Borrow it, and then repay it later in better times, which is not at all—that may sound funny, but that’s exactly what we’ve done in the past. That’s exactly—how did we get out of the Great Depression? We got out of it by—actually, we got out of it before World War II, but thanks to the spending that preceded World War II, thanks to the military buildup. A little factoid people may not know, just this morning: Which of the major economies in the advanced world grew fastest in the first quarter of 2012? The surprise answer is Japan. Why is that happening? It’s because Japan is now spending a lot of money reconstructing after the tsunami. And that spending is driving rapid growth in Japan right now. We could all be doing that.

AMY GOODMAN: Let’s go to Mitt Romney for a moment, the presidential candidate’s economic plans and his critique of the Obama White House. This is what he said Wednesday at a campaign stop in Iowa.

MITT ROMNEY: President Obama is an old-school liberal whose first instinct is to see free enterprise as the villain and government as the hero. America counted on President Obama to rescue the economy, to tame the deficit and help create jobs. Instead, he bailed out the public sector, gave billions of your dollars to companies of his friends, and added almost as much debt to this country as all the prior presidents combined. The consequence is that we are now enduring the most tepid recovery in modern history.

AMY GOODMAN: Your response to Mitt Romney, Paul Krugman?

PAUL KRUGMAN: Boy, you know, don’t even know where to start. I mean, Romney’s technique is that—since basically every word he says is a lie, including “a,” “and” and “the,” you never know where to start. But this is—the idea that the—first of all, that Obama is responsible for the large deficits is just not true. It’s overwhelmingly the result of the Bush tax cuts, unfunded wars and a terrible economic crisis that began, of course, under Bush. The idea that the deficits are what’s holding us back is all wrong. The deficits are in fact what’s keeping us afloat. If we had tried to balance the budget, we would now be in a full, full-on replay of the Great Depression. So it’s all nonsense. It’s—and, by the way, the idea of Obama as somebody who governs from the left, I mean, Obama is—Obama’s positions are those of a moderate Republican circa 1992. It’s not—he’s not a leftist. What’s happening now is you have a radical-right Republic Party.

AMY GOODMAN: Well, let’s talk about the Republicans, to House Speaker John Boehner, recently addressed the Peter G. Peterson Foundation’s 2012 Fiscal Summit.

SPEAKER JOHN BOEHNER: The failure of stimulus, a word people in Washington refuse to say anymore, has sparked a rebellion against overspending, overtaxation and overregulation. Americans who take pride in living on a budget recognize that we can’t go on spending money that we don’t have. And our economy is stuck in large part because it is stuck with debt.

AMY GOODMAN: House Speaker Boehner also advocated making long-term changes to programs such as Social Security.

SPEAKER JOHN BOEHNER: We can eliminate all the unfunded liabilities in Social Security, Medicare and Medicaid tomorrow, and the effect on the congressional budget 10-year window could be minimal. That’s because changes to these programs take time and need to be phased in slowly.

AMY GOODMAN: That’s House Speaker Boehner, who has also just revived the debt ceiling—the debt ceiling threat.

PAUL KRUGMAN: Yeah, so—boy, again, let’s leave aside the long-run budget stuff for the moment, and let’s just talk about—the idea that stimulus failed, it was never tried. Take a look at the actual track of government spending in the United States, and take into account the state and local governments as well as the federal, and what you see is, far from actually having a big increase in spending, we’ve actually had much lower. We’ve had austerity in the face of a recession, in a way that we have never had before since the 1930s. So it’s actually been the reverse.

And look, we’ve just done an experiment with what happens if you cut government spending sharply in the face of a depressed economy. That’s what’s been going on in Europe. It’s been going on in an extreme form. I’ve been saying, actually, we’ve basically had a large-scale human experiment, the kind that is banned under Princeton University rules, going on on the people of Greece, Spain, Portugal and Ireland. And the results are clear: it’s disastrous. It leads to very, very sharp economic contractions. Here, we’re having a minor version, though still terrible, of the Great Depression; there, they’re having a full-on replay of the Great Depression.

AMY GOODMAN: Contrast it with Argentina.

PAUL KRUGMAN: Ah, Argentina is an interesting story, because they broke all the rules. There are two countries that we talk about now, actually, people like me. One is Argentina. Argentina had something that was a little bit like the euro. They had a supposedly permanent commitment: one peso, one dollar. Became impossible, fell apart. There was a period of about six months of economic chaos, following, to be honest, then a rapid recovery. Argentina bounced back strongly because they were competitive again. The weaker peso made them able to export. You know, and they defied all the predictions of ruin.

The other story, which is more contemporary, is Iceland, which, in effect, did the same thing. Iceland, because of—the funny thing is, Iceland, the sheer scale of the financial disaster meant that they could not be orthodox. It was not possible. So they were forced to allow a devaluation, have some temporary controls on capital, repudiate some of the debt their bankers ran up. Iceland has a lower unemployment rate than we do right now. So, those are the stories that we should be looking to as examples that say this does not have to be happening.

AMY GOODMAN: So, right now, President Krugman—and that’s not making a mistake—what do you do starting today?
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Student debt bomb ticking

Laura Flanders contrasts Barack Obama’s happy talk to the graduating class at Barnard College with the realities of the student loans racket:

…Except it’s a different sort of debt bomb. It the sort that individuals have to carry about. Thanks to federal law, there’s no declaring bankruptcy on student loans and there’s no debt relief. There’s no getting a refund for an education that did you no good. At the end of the day those payments can be drawn directly out of your social security check…

The video recording of a journalist was key to a “not guilty” verdict in the case of an Occupy Wall Street protester.

Robbing the poor

It’s a great way to make big money, but you have to rob them in aggregate, as Barbara Ehrenreich points out. “Payday lenders” are especially effective.

Mittens in a nutshell

Mitt Romney apparently is wary of the Super Pac that’s planning a $10 million “racially tinged” attack on Barack Obama, but he had this to say about his own statements regarding Obama’s relationship with the Reverend Jeremiah Wright: “I’m actually gonna — I’m not familiar precisely with exactly what I said, but I stand by what I said, whatever it was. I’ll go back and take a look at what was said there.”

Here it is with the nervous snickering:

‘A dangerous fool’

Krugman on Romney.

Americans Elect calls it quits

Remember this “centrist” pipe dream? The opportunity for a third-party presidential candidacy was there, but nobody would run:

Americans Elect, a well-financed group that aimed to help a viable third-party candidate enter this November’s presidential race, has announced it is ending its web-based push to break America’s two-party system.

The organisation, which was founded with millions of dollars from its initial wealthy backers, had little trouble in organising a push to get on the ballot across America. It managed to secure ballot access in 29 states and was on track in all the rest. But it failed to attract a big-name candidate to join it or generate enough popular support from ordinary Americans to fulfil its own requirements to accept a candidate…

As a result, no single person running on the Americans Elect internet-based website managed to secure enough support to qualify for the Americans Elect primary in June causing the group to decide to shutter the process…

Wall Street creep of the week

It was announced late yesterday that Jaime Dimon will be “invited” to testify before the Senate Banking Committee to discuss JPMorgan Chase’s $2 billion-plus trading losses. More here.

Hunger among the elderly

Hey, it sounds like this would be a really good time to turn Medicare into a voucher system, raise the retirement age and tie the Social Security cost-of-living increases to the chained CGI, so 90-year-olds don’t have as much money to throw around!

URBANA – A new study that looked at the hunger trends over a 10-year period found that 14.85 percent of seniors in the United States, more than one in seven, face the threat of hunger. This translates into 8.3 million seniors.

“In 2005, we reported that one in nine seniors faced the threat of hunger,” said Craig Gundersen, University of Illinois associate professor of agricultural and consumer economics and executive director of the National Soybean Research Laboratory who led the data analysis on the study. “So, unlike the population as a whole, food insecurity among those 60 and older actually increased between 2009 and 2010.”

According to the study, from 2001 to 2010, the number of seniors experiencing the threat of hunger has increased by 78 percent. Since the onset of the recession in 2007 to 2010, the number of seniors experiencing the threat of hunger has increased by 34 percent.

Gundersen said that the fact that seniors in our country are going without enough food due to economic constraints is a serious problem that will have greater implications for senior health.

“Compounding the problem is that food insecurity is also associated with a host of poor health outcomes for seniors such as reduced nutrient intakes and limitations in activities of daily living,” Gundersen said. “Consequently, this recent increase in senior hunger will likely lead to additional nutritional and health challenges for our nation.”

The increases in senior hunger were most pronounced among the near poor, whites, widows, non-metro residents, the retired, women, and among households with no grandchildren present.

“What may be surprising is that out of those seniors who face the threat of hunger, the majority have incomes above the poverty line and are white,” Gundersen said.

Other key findings in the study are that those living in states in the South and Southwest, those who are racial or ethnic minorities, those with lower incomes, and those who are younger, ages 60 to 69, are most likely to be threatened by hunger.

Thought for the day

Before leaving the question of divorce, I should like to distinguish two things which are very often confused. The Christian conception of marriage is one: the other is the quite different question-how far Christians, if they are voters or Members of Parliament, ought to try to force their views of marriage on the rest of the community by embodying them in the divorce laws. A great many people seem to think that if you are a Christian yourself you should try to make divorce difficult for every one. I do not think that. At least I know I should be very angry if the Mahommedans tried to prevent the rest of us from drinking wine. My own view is that the Churches should frankly recognise that the majority of the British people are not Christians and, therefore, cannot be expected to live Christian lives. There ought to be two distinct kinds of marriage: one governed by the State with rules enforced on all citizens, the other governed by the Church with rules enforced by her on her own members. The distinction ought to be quite sharp, so that a man knows which couples are married in a Christian sense and which are not. 

C.S. Lewis 

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