i have an audition. >>> and we are back with economist paul krugman and ken rogoff. so your prescription to president bvobama, i take it is run on investment. run on the idea that you're going to borrow more, spend more, that that is what the economy needs right now, not worries about the deficit. >> yeah. and i think in a way, we may -- we may be approaching a somewhat advantageous position authorize that. i think it would have been the right thing to do all along, but there are signs that private demand is starting to get some traction. you know, for one thing, we've had our housing bust has gone on so long, that we appear to be underhoused. we're short on units. people can't afford them because there's no jobs. but if we had higher employment, you could imagine a reinforcing cycle of growth, but it won't happen if we're pursuing austerity and thwarting any recovery whereas right now is about the time or next year when a push could be the thing that tips us into a self-sustaining recovery. >> what would you advise mitt romney -- i don't know if you are advising --

i want to bring in harvard professor ken rogoff, the former chief economist at the international monetary fund. ken, the issue here, we're agreed how people feel influences them. what may be more important to improving our economy is what we actually do. i would love to hear presidential candidates talking about specific things that would create long-term growth. >> job creation. >> not just tax cuts, but real stuff. ken, you often talk about infrastructure. how do you make that into something that makes sense for an election? >> i mean i'd love to see real ideas debated in this election because i worry about us entering this state of lethargy. we are improving. i think the economy is going to hurt president obama, but if it continues to trend upwards, it won't hurt as much. but i mean this isn't just about this year but much longer term. how are we really going to improve our education system and make it more competitive. if we're going to build infrastructure not just that it's a handout but we really build infrastructure. how are we going to de-lever this housing, all this housing debt

ken row gog that mrs. merkel is starting to display emergency on the matter. rogoffnot convinced. >> heard this urgency for two years now and they keep saying this is it, we have solved the problem, and we're nowhere near the end of this i don't think. >> so what is the problem now? is it just greece? is it sitly? where does the problem lie? >> it certainly is not just greece. there are other countries that need deep debt restructuring, talking about portugal, possibly ireland, possibly spain. they need to decide where to draw the line, where it won't cost so much that it's better to save than not. but greece, that's not going to work. >> well, rogoff also mentioned spain as a cause for concern there. we also remind you madrid has just announced its unemployment figures, showing a rate of nearly 23 prd unemployment for that country over the course of the last quarter of the year. that means about 5.3 million people are now out of work across spain. so the situation just gets worse there. at this point we want to go back to john live in davos. i want to start out by a