Nobel Prize-winning economist Paul Krugman says the government should be spending more, given the slow pace of recovery and the millions who still remain out of work.
“The U.S. economy is recovering but slowly,” and still experiencing “depression conditions,” Krugman told The Daily Ticker. “Almost four million workers have been out of work for more than a year…we haven’t had anything like that since the ‘30s” [and]… there’s lots of unused capacity…a lot of savings that have nowhere to go.”
He is unconcerned that increased spending would lead to bigger deficits and suggests that, “There is no good reason that debt should be a priority today.” History shows austerity doesn’t solve debt problems and the 10-year-outlook for debt is not too bad, Krugman adds.
Krugman says, the U.S. economy will get a lot of boost by reversing cuts at the state and local level, particularly in areas such as education and infrastructure. “Just undoing that would lead a long way back to full employment. It is in fact that easy,” he says.
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