CNBC anchor Becky Quick needs everyone to know that she thinks Paul Krugman is wrong about the deficit.
“The only problem with Krugman’s critique [of the push for a deficit reduction plan]? It is hard to find anyone who actually agrees with him,” Quick wrote in an op-ed in Fortune on Friday, which took issue with Krugman’s calls for the government to avoid slashing the deficit now. “Krugman’s claim that there is no fiscal crisis isn’t just laughable, it’s downright dangerous.”
Quick, co-anchor of the CNBC show Squawk Box, uses the fact the some CEOs disagree with Krugman as evidence that the Nobel Prize-winning economist’s deficit stance is wrong. She then cites scary-sounding numbers about the deficit and concludes that the U.S. must reduce the national debt now.
Krugman has challenged many of these arguments. He noted in a January column that unlike families, governments don’t have to pay back all of their debt; they just need to make sure that its “debt grows more slowly than their tax base.” He also has noted that interest rates on Treasury bonds are at historic lows, showing that investors are not worried about the U.S.’s ability to pay off its debt.
Many economists agree that slashing government spending too quickly hurts economic growth. State and local austerity has deprived the economy of 2.3 million jobs over the past three years, according to a recent analysis by the Economic Policy Institute.
Some financial bloggers think that Krugman is spot on. Felix Salmon, finance blogger at Reuters, wrote on Thursday that CEOs’ latest call for deficit reduction is “gross self-interest masquerading as public statesmanship,” and that the economy needs “higher deficits, not lower ones” to combat high unemployment. Joe Weisenthal, deputy editor at Business Insider, also wrote in October that “Obama’s deficits have done a lot of good” by helping dig the economy out of the recession.