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May 1st, 2012
10:40 AM ET

Paul Krugman says the U.S. is in a depression and cutting spending now will make things worse

How bad is our economy? Have we been struggling long enough to call it a depression? Nobel-prize winning economist and New York Times columnist Paul Krugman says yes.

“It’s an awful situation,” he tells “Starting Point” anchor Soledad O’Brien today. While it may not quite be as bad as the 1930s, it’s “pretty terrible” he says. “That was the Great Depression. This is the lesser one. It's an awful situation and importantly it's a time when usual rules don't apply to the economy.”

Krugman, author of a new book “End This Depression Now!” says the government should be putting more money into the economy and focusing less on cutting spending.

“Reverse this misguided budget cutting we’ve done these last few years,” Krugman says, “Get the spending back up there. Get the economy back on track, then we can talk about deficits after that.”

Watch more clips from the interview to see the panel challenge Krugman’s view on the looming debt crisis and the best time for the government to implement spending cuts.

Filed under: Economy
soundoff (6 Responses)
  1. Matt

    Krugman can't be stopped!

    May 1, 2012 at 10:50 pm | Report abuse | Reply
  2. peaceout72

    I can't believe this guy calls himself an Economist. Spending makes your debt better? I think his Phd should be revoked.

    May 1, 2012 at 10:50 pm | Report abuse | Reply
  3. AAsh

    OMG – how can any sane person say "we are not spending enough" when we are running trillion dollar deficits???? And BTW, ask Greece if running deficits "doesn't matter".

    May 1, 2012 at 5:23 pm | Report abuse | Reply
  4. El Flaco

    Krugman is one of the world's best known economists. His advice is well worth considering.

    May 1, 2012 at 3:48 pm | Report abuse | Reply
  5. Neurotoxin

    Shut up, you babbling baffoon. In 2002, YOU suggested the Federal Reserve blow a housing bubble to get us out of the previous recession – following YOUR advice is what got us into this mess. THAT's what happens when people honestly believe the laws of economics don't apply in a recession. You don't CITE any of your "evidence", but you reference Keynes's "General Theory" more times than Pat Robertson references the Bible – and they have about the same scientific weight.

    May 1, 2012 at 3:25 pm | Report abuse | Reply
  6. JustAO

    Republicans and Tea Party don't want our country financially strong because ito them, only the wealthy deserve to have money. They want our country to resemble dictatorships where only a handful of citizens have rights and wealth. Look at all the proposals being put on the table by Republicans and Tea Party. None of them have any credibility from any economists except those who favor big corporations and profits over strong economic theory.

    May 1, 2012 at 3:08 pm | Report abuse | Reply

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