Paul Krugman explains why we can't settle for stabilizing the economy, and says unless there's a bigger economic stimulus package, high unemployment is here to stay for a long, long time:

The effects of the stimulus will build over time — it’s still likely to create or save a total of around three million jobs — but its peak impact on the growth of G.D.P. (as opposed to its level) is already behind us. Solid growth will continue only if private spending takes up the baton as the effect of the stimulus fades. And so far there’s no sign that this is happening.

So the government needs to do much more. Unfortunately, the political prospects for further action aren’t good.

What I keep hearing from Washington is one of two arguments: either (1) the stimulus has failed, unemployment is still rising, so we shouldn’t do any more, or (2) the stimulus has succeeded, G.D.P. is growing, so we don’t need to do any more. The truth, which is that the stimulus was too little of a good thing — that it helped, but it wasn’t big enough — seems to be too complicated for an era of sound-bite politics.

But can we afford to do more? We can’t afford not to.

High unemployment doesn’t just punish the economy today; it punishes the future, too. In the face of a depressed economy, businesses have slashed investment spending — both spending on plant and equipment and “intangible” investments in such things as product development and worker training. This will hurt the economy’s potential for years to come.

Deficit hawks like to complain that today’s young people will end up having to pay higher taxes to service the debt we’re running up right now. But anyone who really cared about the prospects of young Americans would be pushing for much more job creation, since the burden of high unemployment falls disproportionately on young workers — and those who enter the work force in years of high unemployment suffer permanent career damage, never catching up with those who graduated in better times.

Even the claim that we’ll have to pay for stimulus spending now with higher taxes later is mostly wrong. Spending more on recovery will lead to a stronger economy, both now and in the future — and a stronger economy means more government revenue. Stimulus spending probably doesn’t pay for itself, but its true cost, even in a narrow fiscal sense, is only a fraction of the headline number.

O.K., I know I’m being impractical: major economic programs can’t pass Congress without the support of relatively conservative Democrats, and these Democrats have been telling reporters that they have lost their appetite for stimulus.

But I hope their stomachs start rumbling soon. We now know that stimulus works, but we aren’t doing nearly enough of it. For the sake of today’s unemployed, and for the sake of the nation’s future, we need to do much more.

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Amazing, how concerned bobbleheads become about the deficit right after the Republican administration that created it has left the scene of the crime. As people like Paul Krugman keep reminding us, there are obvious economic reasons the deficit cannot be the priority during a major recession. But those facts seem to elude David Gregory during this NBC News’ “Meet the Press” interview with Tim Geithner:

DAVID GREGORY: Let me talk about the deficit and the debt. These are alarming numbers. You've said they are. Let's look at the deficit-- since inauguration day. $1.2 trillion, now $1.4 trillion. It's up 17 percent. The overall debt, inauguration day, $10.6 trillion, now, $11.9 trillion. What's it gonna be a year from now?

TIMOTHY GEITHNER: Well, it's gonna have to come down now. It's-- it's too high. And I think everybody understands this. You know, we got these two central imperatives. Restore growth, create jobs. But make sure people understand we're gonna have to bring those fiscal deficits down as growth recovers. First growth, though. Without growth, you can't fix those long term fiscal problems. But you're not gonna have a recovery that's gonna be strong enough unless people are confident we're gonna have the will to go back to living within our means.

DAVID GREGORY: How do you bring it down, though? Do taxes have to go up?

TIMOTHY GEITHNER: Well, we're gonna have to do-- we're gonna have to make some hard choices. But we're not really at the point yet, David, where we're gonna know what's gonna be the best path forward. The President's very committed to bringing down these deficits. He's very committed to doing so in a way that's not gonna add to the burden of people-- people making less than $250,000 a year.

DAVID GREGORY: I mean, I think a lot of people - I think its fair to say - what are hard choices? I mean, what hard choices have been made so far? Are you gonna raise taxes?

TIMOTHY GEITHNER: We're gonna have to bring our resources and our expenditures more into balance.

DAVID GREGORY: So, it's possible.

TIMOTHY GEITHNER: Well-- again, the President's committed to make sure we get this economy back on track. We'll bring down deficits over time. And--

DAVID GREGORY: But Mr. Secretary you talked about hard choices. So, why can't you give a straight answer as to whether taxes have to come up, when you have a deficit this big?

TIMOTHY GEITHNER: Because David, right now we're focused on getting growth back on track. Okay? And we're not at the point yet where we have to decide exactly what it's gonna take. And I just want to say this very clearly. He was committed in the campaign to make-- he said in the campaign. And he is committed to make sure we do this in a way that is not gonna add to the burden on people making less than $250,000 a year. Now, it's gonna be hard to do that. But he's committed to doing that. And we can do that.

DAVID GREGORY: You can do it. But it's still a chance that you'd have to raise taxes and go back on that, if you've got a debt this big?

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Nicole Wallace wants us to think that the party of no has not been using scorched earth policy and trying to undermine the President at every turn-- even though she worked for the likes of George Bush and the John McCain campaign which brought us that totally non-scorched earth wonder Sarah Palin. You know... the one who said that Barack Obama was "palling around with terrorists".

How could anyone ever get the idea that the Republicans wanted to resort to a "scorched earth" policy after watching that campaign in action?

Of course, that would be asking too much of Anderson Cooper to possibly bring that up to Ms. Wallace, wouldn't it?

And she thinks Bill Frist and Jeb Bush are people "who could end up on the landscape in a presidential landscape down the road".

Really? Jeb-- who's last name is mud since his brother messed up his chances of ever running-- and the cat killer Bill Frist? Bring 'em on Nicole. Bring your good buddy Palin on with them while you're at it if that's the GOP's hope for the next presidential election. I welcome any one of them as the GOP's next nominee.

COOPER: Nicolle, have -- critics of the Republicans say, basically, look, they have a scorched-earth policy going on right now, that they are opposing anything that President Obama supports.

Is that fair?

WALLACE: That's not fair. And it's not true.

I mean, Jeb Bush has been very complimentary of Obama's Education Department secretary so far. Today, he said he was encouraged. Bill Frist was on, you know, as a very credible voice, as a doctor, talking about the need for health care reform. John McCain is -- is a statesman's statesman. And he is providing a lot of leadership and I think productive and constructive ideas...

(CROSSTALK)

COOPER: But you're kind of clutching at straws. I mean, Jeb Bush and Bill Frist?

(LAUGHTER)

WALLACE: These aren't straws. These are certainly people that...

(CROSSTALK)

COOPER: Bill Frist is like, you know...

(LAUGHTER)

WALLACE: But these are people who could end up on the landscape in a presidential landscape down the road.

So, I think when you -- you look at Washington, sure, you look at House members. But when you look at the American public at large, you know, not all of what happens in Washington breaks through.

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Argh, there's so much wrong with this clip that it's all I can do to keep typing and not smacking my head against the desktop. First of all, they ask on Krugman to discuss his NY Times column talking about how GOP obstructionism has reached cartoonish levels and they decide to frame the segment on whether Obama lost his "MOJO"? Seriously? A major news organization ignores the absurdity of the GOP overarching need to find things with which to smear Obama and instead frames the issue for the President of the United States as an Austin Powers plot? And no one but a hyper-partisan conservative "party before country" cheerleader thinks that the IOC selecting Rio for the 2016 games has something to do with a failing on any kind on the part of Obama. Cheers to Anderson Cooper for validating what Krugman so aptly described as "bratty 13 year old" behavior and using a Nobel Laureate to do it. Way to keep on top of the issues of the day, Anderson.

And there's that issue of media's bizarre notion of balance again. Sweet Jesus, why on earth would anyone need Mary Matalin's opinion on Obama's "mojo"? The woman has spent years advising Dick Cheney, fer cryin' out loud, what exactly is her expertise in mojo? As would be expected, Matalin never answers anything directly, resorting to the familiar GOP projection and mean-spritied insinuations, saying she's never drunk the kool-aid on the messiah-like qualities of Obama.

Watch as Krugman acknowledges that Obama hasn't done everything perfectly and that there's still far to go, but that the level of discourse from the right prevents any actual adult-level dialog. And Matalin proves him right by devolving into fingerpointing and bringing in one non sequitur after another. Of course, everything that Obama has been hit with has an equivalence in Matalin's mind to that poor, misunderestimated George W. Bush. If you believe Matalin, the Democrats did nothing but screamed "Liar!" and "Loser" to Bush. Constantly. Hmmm....funny that, I don't remember it that way, but maybe that's because I'm part of the reality-based community.

But hey, how much honest analysis can you get from someone who openly admits she reveres the Fat Bastard himself, Rush Limbaugh? For that alone, she should be laughed off camera.

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Paul Krugman writes an excellent column on the mental state of the Republican Party and compares their collective glee over the United States losing our Olympics bid to that of a "bratty 13-year-old", and who better to make him go up against but Lady McCheney who's never found someone she could not bully on the set of CNN? If CNN wanted to have an honest discussion about the points he was trying to make in his column, they wouldn't have put him up against this Cheney hack who represents everything that's been wrong with the last nine years plus of our politics in this country.

COOPER: In "Raw Politics" tonight: the mounting pressure on President Obama, under attack from his critics and on the defense about his policies. The shocks are not just coming from the right anymore. Check out who "Saturday Night Live" chose as their newest target over the weekend.

(BEGIN VIDEO CLIP, "SATURDAY NIGHT LIVE")

FRED ARMISEN, ACTOR: On my first day in office I said I would close Guantanamo Bay. Is it closed yet? No.

I said we would be out of Iraq. Are we? Not the last time I checked.

ARMISEN: I said I would make improvements in the war in Afghanistan. Is it better? No, I think it's actually worse.

ARMISEN: How about health care reform? Hell no.

(END VIDEO CLIP)

COOPER: The sketch then went on to lampoon Mr. Obama for Chicago losing the 2016 Olympic Games.

Now, some of the president's conservative critics literally broke out in applause when the news broke that Chicago had been rejected.

Today, "The New York Times"' Paul Krugman said the GOP has become a party ruled by spite, eager to see the president fail, even if it's on something that is good for America. His latest book is "The Return of Depression Economics and the Crisis of 2008."

Paul Krugman and political contributor Mary Matalin, who's -- who was a counselor to Vice President Dick Cheney, joined me earlier.

(BEGIN VIDEOTAPE)

COOPER: There is a narrative right now that -- that President Obama has lost his mojo. There was a couple people saying that the last couple days, "Saturday Night Live." Do you -- do you buy that?

KRUGMAN: No.

I mean, I think there are -- there are a lot of problems. And he -- you know, it's very difficult to be a strong, successful president when the employment picture is still worsening. And the employment picture is still worsening. And the stimulus law, while it has helped, isn't big enough to turn that around any time soon. So, he's got some problems.

But, look, health care, the -- the mood I get from the people who are really working on health care legislation is that this thing is now going to happen. A few weeks ago, there were real doubts about whether it was going to happen. But now it looks like it is going to happen. And that is going to be a huge thing.

Regardless of exactly what happens in the midterm elections, if we come out with legislation establishing universal health care by the end of this year, which I now believe we will, My God, that is transformational. We will be a different country. So, that is mojo in -- in the space that matters.

COOPER: Mary, do you believe that he has lost his mojo? I mean, there's people saying: Look, health care has not worked out. He's been weak on. He hasn't been out in front of it enough. The situation in Afghanistan, certainly, and other issues. The Olympic thing is just the -- the latest.

MATALIN: I don't -- I don't know if he lost his mojo. I never drank the Kool-Aid in the first place.

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It looks like Rush Limbaugh's glee over the United States losing the bid for the Olympics was even too much for Joe Scarborough to take.

Scarborough: I would like Rush Limbaugh to tell me Mike Barnicle...who's he helping there other than Rush Limbaugh? Because I would tell you middle Americans--Rush is smarter than that--middle Americans that swing elections see that and "Oh my god, Republicans have gone off the deep end."

I hate to tell you Joe but a lot of people I know realized the Republicans went off the deep end a long time ago. And Katrina Vanden Heuvel is exactly right. The Republicans would have attacked Obama no matter how this went down. If he hadn't gone, they'd have been saying the other heads of state went and he lost it for America. If he'd gone and the U.S. had gotten the bid, they'd be attacking Chicago for their dirty politics. You cannot win when dealing with these people who as Paul Krugman rightly pointed out that you were so dismissive of later in the segment... have "the emotional maturity of a bratty 13-year-old".

Paul Krugman says that the main Republican strategy to fight climate change legislation will be to attack it as hurting the economy:

By 2050, when the emissions limit would be much tighter, the burden would rise to 1.2 percent of income. But the budget office also predicts that real G.D.P. will be about two-and-a-half times larger in 2050 than it is today, so that G.D.P. per person will rise by about 80 percent. The cost of climate protection would barely make a dent in that growth. And all of this, of course, ignores the benefits of limiting global warming.

So where do the apocalyptic warnings about the cost of climate-change policy come from?

Are the opponents of cap-and-trade relying on different studies that reach fundamentally different conclusions? No, not really. It’s true that last spring the Heritage Foundation put out a report claiming that Waxman-Markey would lead to huge job losses, but the study seems to have been so obviously absurd that I’ve hardly seen anyone cite it.

Instead, the campaign against saving the planet rests mainly on lies.

Thus, last week Glenn Beck — who seems to be challenging Rush Limbaugh for the role of de facto leader of the G.O.P. — informed his audience of a “buried” Obama administration study showing that Waxman-Markey would actually cost the average family $1,787 per year. Needless to say, no such study exists.

But we shouldn’t be too hard on Mr. Beck. Similar — and similarly false — claims about the cost of Waxman-Markey have been circulated by many supposed experts.

A year ago I would have been shocked by this behavior. But as we’ve already seen in the health care debate, the polarization of our political discourse has forced self-proclaimed “centrists” to choose sides — and many of them have apparently decided that partisan opposition to President Obama trumps any concerns about intellectual honesty.

So here’s the bottom line: The claim that climate legislation will kill the economy deserves the same disdain as the claim that global warming is a hoax. The truth about the economics of climate change is that it’s relatively easy being green.

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Rachel Maddow and Paul Krugman weigh in on Sarah Palin’s misguided talking points in her recent speech to financial executives in Hong Kong. Palin apparently thinks that the solution to our economic mess in the United States is less government regulation rather than more to rein the bankers and Wall Street in for their bad behavior.

As Krugman notes we need more regulation and consumer protections and if we can’t even fix the simple things that should be a no brainer like consumer protections, how are we going to fix the bigger problems?

From Think Progress-Delegates walk out of Palin’s first international speech:

Sarah Palin made her international debut today in a closed-door speech at the CLSA Investors’ Forum in Hong Kong. AFP reports that Palin’s speech, which touched on issues like international terrorism and the U.S. debt, “divided” the audience and even prompted a few delegates to leave in disgust:

Former US vice-presidential nominee Sarah Palin divided an international audience of financial big-hitters at her first speech outside North America on Wednesday with some leaving in disgust. [...]

Some listeners praised her forthright views on government social and economic intervention but others walked out early citing boredom or disgust. [...]

A US delegate leaving early with a colleague said: “it was awful, we couldn’t stand it any longer.”

As Krugman noted during this interview unfortunately Sarah Palin is not that far out of the mainstream of the Republican Party with her views on regulation.

Journalists are often surprised when they see themselves criticized because they think that they are above it all, but when you see something like this come up in print it makes you just shake your head. Howard Kurtz' newest column portrays Paul Krugman as an Obama cheerleader now being lost over his handling of the health care debate.

A president is going to be smacked around from the moment he takes office and the uplifting rhetoric of campaign rallies meets the gritty reality of governing.

But the criticism of Barack Obama has turned strikingly personal as some of his liberal media allies have gone wobbly on him. After playing a cheer-leading role during the campaign, some are bluntly questioning whether he's up to the job.

If Obama is losing Paul Krugman, can the rest of the left be far behind?

Really, this is who he picks as a cheerleader? Paul Krugman has been analyzing President Obama's choices ever since the primaries began and he was often critical of the then Senator all the way through to his winning the election. Krugman took a lot of heat when he criticized Obama's initial health care plan and he's been outspoken ever since on all issues economic including writing that he thought the stimulus wasn't big enough, but Howard makes it seem like Krugman was an Obama cheerleader right from the start.

Dean Baker caught this earlier today.

Those of you who remember Paul Krugman's often harsh criticisms of Obama during the election campaign might be surprised to read Howard Kurtz's media column which puts him first among the disappointed former Obama cheerleaders. Krugman has certainly been critical of Obama's performance in office, but this is only news for Kurtz, not people familiar with Krugman's writings.

All Villagers aren't wrong in everything they write obviously, certainly not Kurtz, but this latest error is laughable. I can understand if it was a matter of interpretation, but come on Howard, this one wasn't even close to being on the mark. (h/t Atrios)

Ever notice the deficits are only a problem when Democrats spend to help the rest of us?

Krugman explains why the deficit isn't the huge problem Republicans always say it is (but only when there's a Democratic president, of course):

So is there anything to worry about? Yes, but the dangers are political, not economic.

As I’ve said, those 10-year projections aren’t as bad as you may have heard. Over the really long term, however, the U.S. government will have big problems unless it makes some major changes. In particular, it has to rein in the growth of Medicare and Medicaid spending.

That shouldn’t be hard in the context of overall health care reform. After all, America spends far more on health care than other advanced countries, without better results, so we should be able to make our system more cost-efficient.

But that won’t happen, of course, if even the most modest attempts to improve the system are successfully demagogued — by conservatives! — as efforts to “pull the plug on grandma.”

So don’t fret about this year’s deficit; we actually need to run up federal debt right now and need to keep doing it until the economy is on a solid path to recovery. And the extra debt should be manageable. If we face a potential problem, it’s not because the economy can’t handle the extra debt. Instead, it’s the politics, stupid.

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Paul Krugman and Robert Reich both made some really great points during the panel discussion on This Week on the reasons for some real reform of the insurance industry, the mistakes made by the President in negotiating with the Senate, and the notion that there is a need for bipartisanship when the Republican party has moved so far out of the mainstream. And this statement by Krugman bears noting:

Krugman: Well, the public option again, this is something, that, there’s a question whether they're for it, or whether, are they willing to actually vote against cloture to stop this really quite modest but helpful piece of the reform being in there? (crosstalk) They have no intellectual basis to stand on, right? The argument against the public option is sheer nonsense. We know that. It's nothing except the insurance lobby.

Exactly. If these conserva-Dems want to block health care reform and getting the insurance industries in check, make them actually have to stand up and filibuster it along with the Republicans and show their true colors.

Transcript below the fold.

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Paul Krugman calls out John McCain for his double talk on controlling Medicare costs during this panel discussion with George Stephanopoulos on This Week. As Krugman notes, the Republicans and John McCain are trying to have it both ways and one one hand saying Medicare's costs need to be kept in check, and on the other hand scaring seniors into thinking that the President wants to cut their Medicare benefits, and refusing to have a rational debate on how those costs end up being controlled.

David Frum tries to defend the Medicare Advantage program which is one of the things the Obama administration wants to go after to control costs, and Krugman shoots a hole straight through his arguments and reminds him that wasteful spending is what Republicans are supposed to be against. George Will wraps things up with showing his love for the pharmaceutical industry and their profits.

WILL: We’ve been talking about this for about five minutes and the subject of cost, which is tiresome and depressing, has not come up.

REICH: I just mentioned it.

WILL: When we began this debate a few months ago, the costs were going to be paid primarily by two things. One, the proceeds from selling under cap and trade, the permits to emit carbon. And “B,” Medicare cuts. “B” is never going to happen. And we’ve given away what should have been sold, or so we say, the rights to emit carbon. Where are we going to pay for this?

KRUGMAN: Medicare stuff, I think, will, in fact, happen if anything passes. If you want to think about the utter, utter hypocrisy of the Republicans on this. We just heard John McCain . And early on in your conversation, he said basically Sarah Palin was right in saying death panels because the Democrats want Medicare to take into account the actual medical effectiveness --

STEPHANOPOULOS: They weren’t in support of the policy.

KRUGMAN: Right. And then later in the same conversation, he said, we have a terrible problem with entitlements with Medicare. We really need to do something to cut Medicare spending. And what possible way -- we should cut Medicare spending without any regard for the medical effectiveness of what it’s paying for? So, this is, you know, we have the Republicans actually standing fully against any sort of rational control of costs.

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Krugman talks sense, wonders why the White House is so out of it:

Look, it is possible to have universal care without a public option; Switzerland does. But there are some good reasons for the prominence of the public option in our debate.

One is substantive: to have a workable system without the public option, you need to have effective regulation of the insurers. Given the realities of our money-dominated politics, you really have to worry whether that can be done — which is a reason to have a more or less automatic mechanism for disciplining the industry.

The second is what the option debate says about Obama.

If progressives had real trust in Obama’s commitment to doing the right thing, the administration would have broad leeway to do deals. But the president doesn’t command that kind of trust.

Partly it’s a matter of style — as many people have noted, he has been weirdly reluctant to make the moral case for universal care, weirdly unable to show passion on the issue, weirdly diffident even about the blatant lies from the right. Partly it’s a spillover from his other policies: by appointing an economic team that’s Rubin redux, by taking such a kindly attitude to the banks, he has squandered a lot of progressive enthusiasm.

Add in the dealmaking as part of the health care process itself, and progressives can be forgiven for having the impression that Obama (a) takes them for granted (b) is way too easily rolled by the other side.

So progressives have their backs up over one provision in health care reform that’s easy to monitor. The public option has become not so much a symbol as a signal, a test of whether Obama is really the progressive activists thought they were backing.

And the bizarre thing is that the administration doesn’t seem to get that.

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Paul Krugman appeared on MSNBC to discuss his latest op-ed Republican Death Trip. Paul reiterates some of the points he made in his article.

Krugman: The way I look at it, these people are unappeaseable. It's not really about what it's ostensibly about. It's not actually about the end of life provisions. It's not about the specifics in the bill. They're just going to grab onto anything and try to turn some it into something awful. So they saw this. It seemed to have something to do with end of life and so they said, you know, death panels. It's not about the substance, and that you can't actually satisfy the crazies by offering substantive concessions. What they hate is the whole idea of any kind of health reform and more broadly what they hate is the whole idea of Democrats actually, you know, holding the White House.

Harwood: Interesting point Paul and I've got to tell you one White House official told me today, our problem right now is if we tell some of the Republican opponents in the Senate you can have everything you want in the bill, they still won't vote for it. So...

Krugman: That's right.

So why are they still reaching out to them? From the article:

The question now is how Mr. Obama will deal with the death of his postpartisan dream.

So far, at least, the Obama administration’s response to the outpouring of hate on the right has had a deer-in-the-headlights quality. It’s as if officials still can’t wrap their minds around the fact that things like this can happen to people who aren’t named Clinton, as if they keep expecting the nonsense to just go away.

What, then, should Mr. Obama do? It would certainly help if he gave clearer and more concise explanations of his health care plan. To be fair, he’s gotten much better at that over the past couple of weeks.

What’s still missing, however, is a sense of passion and outrage — passion for the goal of ensuring that every American gets the health care he or she needs, outrage at the lies and fear-mongering that are being used to block that goal.

So can Mr. Obama, who can be so eloquent when delivering a message of uplift, rise to the challenge of unreasoning, unappeasable opposition? Only time will tell.

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Paul Krugman joined the round table discussion on ABC's THIS WEEK and highlighted the misleading CBO report on the costs of health care and he singled out Doug Elmendorf as the culprit..

Krugman: I think I should say something about that CBO thing which really surprised a lot fo people because...

George: it was important and interesting timing...

Krugman: And also because most of the health care economists I talked to think that MedPac reform, that having these judges would actually be quite important especially in the long run so they were really kind of surprised. There's a kind of sense that the CBO faced with a, no one can put a hard number on this, but CBO sort of said that if we can't put a hard number on it we're going to say it's zero and that seems to be wrong. There's every reason to think that what Medicare is willing to pay for can save a lot of money and this was a kind of destructive comment by Doug Elmendorf of the CBO.

Ywa, think? How can the CBO give an effective cost analysis without the entire bill being presented to them? And suddenly the CBO is the judge and jury on whether we get health care reform passed and gives detractors a vehicle to complain. The media sure seems to be rooting for an Obama failure on health care reform, but what's their stake in it outside of loving the prospect of running with that story? I actually saw a segment on CNN which discussed the ramification of having no health care and how it affects Americans. There's too little of that and too much of imaginary numbers.