Liberal economist and New York Times columnist Paul Krugman has said that our government's trillions in debt is not a problem and even intimated that we should print more fiat money to get us out of our bad economy.
Krugman appeared on C-SPAN's "Washington Journal" program on January 30 and scoffed at Rep. Paul Ryan's (R, WS) claim that our country is on the verge of a debt crisis. Ryan's comments were made at last week's National Review Summit.
"We spend a trillion dollars more than we take in each year. We can’t keep that up. If we stay on this path, we will run the risk of a debt crisis. What is that? That’s a moment where our finances collapse, our economy stalls. We will have to convince the country to change course," Ryan said.
Asked if we really are in danger of collapse, Krugman replied, "Uh, no."
There's a whole bunch of reasons why that's not true. First of all... that trillion-dollar deficit is overwhelmingly the result of a depressed economy. And when the economy's depressed it's good to run a deficit. You don't want the government to try and balance its budget right now.
Krugman then noted that we print our money, so we can't run out. "But also the United States is a country that has its own currency. Can't run out of cash because we print the money," he said.
"The story Ryan is trying to tell just doesn’t actually make sense," Kurgman explained. "There are no historical counterparts to the story he claims we’re at risk of," Krugman continued. "And of course, Ryan himself desperately, desperately is concerned about the deficit but won’t accept one penny in additional revenue to deal with it. All he really wants is to cut spending."
The segment discussed above is about five minutes in: