KRUGMAN Explains Sequestration: “This was designed to be stupid” [View all]

[kpete]

“This was designed to be stupid,” Krugman said. “The whole point was, this was supposed to be a doomsday device that would force the Democratic and Republican parties to reach an agreement. Of course, they didn’t, and here it goes.”

While the effect of the spending cuts would take time to manifest, Krugman told Schultz, they would definitely be felt by late 2013.

“This is exactly what the doctor did not order,” he said.

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“If we would just stop cutting, the growth would probably keep going,” Krugman answered. “If spending had grown as fast in this recovery as it has in past recoveries, we’d be spending something like $200 billion a year — state, local and federal — more, maybe $300 billion a year more. Maybe $300 billion a year more. We’d have about a million and a half more public sector workers than we do right now, because we’ve been laying them off at [an] unprecedented pace. So, I think $300 billion a year of additional spending would be appropriate and would mean, if we did it, that we would be pretty close to full employment at this point.”

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http://www.rawstory.com/rs/2013/03/01/paul-krugman-sequester-was-designed-to-be-stupid/