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Krugman: spending and government loans needed
Princeton Professor Paul Krugman on the Economy:
PRINCETON — History does repeat itself and the job crisis that happened after the Great Depression is happening again. Government spending is the solution, according to panelists who spoke about the uncertainties in the jobs market and the ongoing economic crunch this weekend.
”From my perspective we are living in surreal times in a bad way,” said Paul Krugman, Noble Prize winner and Woodrow Wilson School Professor of Economics. “What makes it so surreal is that it is not a mystery why this is happening and it is not a mystery of how to solve it.”
His solutions: spending and government loans.
”There is just not enough spending, because my spending is your income and vice versa,” Mr. Krugman said at the event hosted by Mid-Jersey MoveOn at the Nassau Presbyterian Church on Sunday afternoon. “If there is not enough spending in the economy, then you end up with a mass of unemployment, which is what we have.”
Speaking to about 500 people, Mr. Krugman said one of the main problems was when the economy had a “collapse in demand” with consumers slowing in their spending and demanding less goods and services. If people are not spending money, people are losing jobs, he said. His solution to this problem is for the government to borrow money to spend to stimulate the economy.
”From my perspective we are living in surreal times in a bad way,” said Paul Krugman, Noble Prize winner and Woodrow Wilson School Professor of Economics. “What makes it so surreal is that it is not a mystery why this is happening and it is not a mystery of how to solve it.”
His solutions: spending and government loans.
”There is just not enough spending, because my spending is your income and vice versa,” Mr. Krugman said at the event hosted by Mid-Jersey MoveOn at the Nassau Presbyterian Church on Sunday afternoon. “If there is not enough spending in the economy, then you end up with a mass of unemployment, which is what we have.”
Speaking to about 500 people, Mr. Krugman said one of the main problems was when the economy had a “collapse in demand” with consumers slowing in their spending and demanding less goods and services. If people are not spending money, people are losing jobs, he said. His solution to this problem is for the government to borrow money to spend to stimulate the economy.
”Federal government can borrow long term at an interest rate of 2 percent if it sells inflation adjustment bonds it can borrow at the rate of zero. Lending is actually free to the federal government,” Mr. Krugman said.
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