Krugman on the debt crisis

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.”

“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.”