and we'll be back. >>> up next, a debate on the economy, paul krugman and ken economy, paul krugman and rogoff join me.ut we try this d of fiber one cereal? joo auto h had rookie. okay. ♪ nutty clusters and almonds, ♪ ♪ almonds. ♪ fiber one is gonna make you smile. ♪ [ male announcer ] introducing new fiber one nutty clusters and almonds. with 43% daily value of fiber for you. crunchy nutty clusters and real almond slices for your taste buds. but what about your wrinkles? neutrogena® rapid wrinkle repair. its retinol formula visibly reduces wrinkles in one week. why wait if you don't have to. neutrogena®. starts with arthritis pain and a choice. take tylenol or take aleve, the #1 recommended pain reliever by orthopedic doctors. just two aleve can keep pain away all day. back to the news. >>> as the american economy continues to disappoint, an old debate has resurfaced. is there anything the government can do to get things moving again? or is it all in the hands of the private sector? to talk about this, i have two economists, paul krugman, columnist for "new york times," professor at pr

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so paul krugman would start to wonder if government spending became fifty percent of g.d.p. reactions you want to pile on here oh sure i'll be happy to pile on and add france is a fifty percent right now so you know where's it going to go on your own line and france has an unemployment rate in spite of all other social burthen spite or are they nor do i as an unemployment rate of ten point one percent as a ten point zero anyway it's over ten percent or now all of europe is over is struggling out on employment and they have more government spending than we do someone somewhere is going and i have to laugh at that one comment that came from spain because i had someone e-mail me last week you know who am i supposed to believe you or a nobel prize winning economist way one is nobel prize for trade and a lot of the things that bergman has actually said on trade in the past historically agreed with kirkman wasn't one time a big proponent of free trade now the interesting thing right now is he's dropped that stance he wants the united states of you know let's i'm mistaken there he'

we are headed towards a big deflation, paul krugman for example. the fed should be more activist, more quantitative. other people think waiting minute, they set up a situation where they may be able, rising inflation in the future. what they are really debating is a, we don't think the purchasing power of the dollar will be stable to some of us think it will default, some of them think it will be rising depending on they think whether there will be a deflation or inflation. can you guarantee that in edison's analogy that when you buy a poker chip at the table for a dollar, that when you catch a backend you get 1 dollar for it? poker chip analogy. sadly i think the answer is no. you have to put your faith and trust in the federal reserve's creation of money, and the fractional reserve banking system. being able in a sense to get where people's desire to hold money is going to go, where the rate of production of output are going to go, and then the short run is, you are trying to do something that can be done. in the longer run, there's probably hope

were managing money he would have gone bankrupt decades ago and we would never have heard from paul krugman ever again but because he's an academic and he's a journalist is a writer and it can write all kinds of nonsense all day long without any accountability whatsoever people buy into this nonsense even though it's theoretically preposterous and it's on a practical basis completely meaningless but talking about micro economics we have the micro problem of banks' toure's who have become a global macro problem they're very interlinked they're little crimes here and they're adding up to a big macro global problem corrupt allegations major fraud inquiries a senate probe into deals with drug running gangsters in mexico and a luxury yacht welcome to the world of banking twenty twelve so police are poised to press charges against several h. boss bankers and consultants after a two year investigation into a large scale fraud and corruption involving the edinburgh based bank the probe code named operation hornet is described by a police officer involved as the largest fraud investigation of its ty

austerity measures they will unfortunately compound problems but it's amazing how the likes of paul krugman and the keynesians they're not even keynesians they're actually call them to burkina humans are even a different field economics altogether because keynes would never have abdicated what they have got in terms of. debating out of the banks which happened in recent years you know. and i think that's a fundamental issue that needs to be addressed that's all all the measures have been taken recent years and they haven't solved a thing and potentially going to make things a hell but worse in terms of devaluation of currencies which is going to be seen in the coming years yet now they're not going to and they're terrorists. imagine a solution that comes up all the time adding debt to more debt again at the macro economic solution the debt that they're adding to the debt the way it's priced is that is tied to a lot more alive was manipulated and therefore the entire solution is based on a faulty assumption that you're. libel rate is somehow derived from market machinations where just not is

austerity measures they will enforce the component problems but it's amazing how the likes of paul krugman and the keynesians not even keynesians there actually. are even a different school of economics altogether because keynes would never have abdicated what they have in terms of i suppose the bailing out of the banks as happened in recent years you know. and i think that's a fundamental issue that needs to be addressed that the. measures that were taken in recent years they haven't solved a thing i'm potentially going to make things a whole lot worse in terms of the devaluation of currencies which is going to be seen in the coming years yeah no they're not cantons their terrorist they're totally imagine the solution that comes up all the time adding debt to more debt again that's a macro economic solution the debt that they're adding to the debt the way it's priced is that is tie a lot of your own life force manipulated therefore the entire solution is based on a faulty assumption that your libel rate is somehow derived from market machinations which is not is derived from fraud the ent

. >> and paul krugman. >> who's coming on at 8:30 a.m. eastern time. i know. it's going to be an interesting interview. don't cry just yet. >> i'm not going to cry. i have priors. i don't want to do anything that gets me, you know -- >> back in jail? >> -- back in touch with my -- i'm worried. a few other -- really, what gets me is when you try -- you have the miles, you're ready to do the upgrade, seats available. those aren't upgradable seats. i've looked at the seats. they're all the same. they're not different. they're not fatter, slimmer, wider. how do you decide whether it's a -- have you tried that? >> i have this problem all the time. >> you do? all right. >> don't you? >> yeah. >> are you -- did you ever say -- how are you getting to paris? >> on a plane. >> yeah. on a slow boat. >> i have kids. >> do you get to upgrade? >> can you upgrade? >> do you upgrade the kids? >> that's a rough one. >> you live on the upper east side, do you. >> would you go in the front and leave kids in back with a nanny? >> no. the question is, do you upgrade the nannies? >

i mean paul krugman talks about the little guy all day long.ll be wiped out, and stimulus? i mean, i get a kick out of this, they say well we can get ourselves out of this with consumer spending. what consumer is ready to spend in this atmosphere? >> right. >> i mean this is madness, and a stimulus, you're not going to get a nickel's worth of stimulus from either party or they'd go home and get cremated. >> we have a $1.3 trillion stimulus right now. we're spending $1.3 trillion more than we take in. >> we have a huge deficit and these guys are not talking radicalism. for 50 years after world war ii, more or less revenue was in the 18.5% or so range and spending was in the 20.5% range, and it really worked quite well. this is not something the country s you know, we're not talking about something we never attained or anything of the sort, it's just we've drifted into this situation where we're not getting enough revenue and we've overpromised on expenditures. we've got a rich country but a rich country can overpromise. >> we've never had less m

paul krugman, for example. the fed should be more activist, more quantitative easing. other people think, well, now, wait a minute. if they set up a situation where there may beyou kw, asi atin fe. 'r really debating, hey, we don't think theurchasing power of the dollar's going to be stable. some of them thinkt's going to be falling, some of them think it's going to be rising depending on if they think there's gown to be la fln. ed's aogat when you buy a poker chip at the table for a dollar, that when you cash it back in, you get a dollar for it? he loved this poker chip analogy. that way i think the ansr is, no. yo have to put yr aus cron oonand the fractional reserve banking system. being able in a sense to get where people's -- guess where people's desire to hold money are going to go,nd in the [iibn is a u'rytooet atcat be done. in the longer run, there's probably hope for a stable current -- currency. but that may rely on different stdards or different prinples, orati pci r ntlafo a tautrity or for a move towards competing private monies with some totally differen

country for energy. [ applause ] i had a debate with that very popular and renowned economist paul krugman who once -- who wants to have another $800 billion borrowed and another $800 billion stimulus. there's now $2.6 trillion sitting on corporate balance sheets. that's about 1.7, 1.8 trillion more than normal, and it's sitting there because there's no confidence or certainty about the future. the best way to have that money invested is to create expectations and confidence about the future through our tax code, through our energy and through our refinement of our entitlement programs. we can keep commitments to seniors, but we have to change how we do that, and that requires rigorous leadership, but it also requires honesty and an apolitical answer when the political questions are asked. and i would put forward to you the stance that we can't ever have a tax increase puts us in a place where we're going to guarantee there's going to be a tax increase in this country because it's called final repression, and when all of a sudden your 401(k) or your i.r.a. or your son-in-law or your daught

"new york times" columnist paul krugman says mitt romney should level with voters about how much he would personally benefit from the policies he advocates. krugman wrote, unless romney does reveal the truth about his investments, quote, we can only assume he is hiding something seriously damaging. >>> the arkansas "democrat gazette" reports democratic congressional candidate ken aden dropped out of his bid for a northwest arkansas seat after the newspaper found documents disproving aden's claims he was in special forces in the military. "the washington post" reports swing states are about to be slammed with a summertime blitz of new ads from conservative karl rove's super pac crossroads gps. the group bought $25 million worth of anti-obama ads that will air in nine battleground states starting today. >>> "the huffington post" reports the department of justice argued in a trial yesterday the voeder i.d. law in texas would disenfranchise 600,000 minority voters who don't have the approved form of identification. >>> on fox news, texas governor rick perry says his state rejects medicaid exp

. >> covering the network panels with paul krugman and elizabeth warn and online discussions with michelle mullikin and sarah palin. watch them online at the c-span video library. >>> three women won the nobel peace prize last october for advocating women's rights and participating in peace building. a panel of women from across africa and the middle east gathered at the john f. kennedy forum at harvard's institute of politics in cambridge to talk about their own experiences. this discussion runs an hour and 35 minutes. >> -- the work of politics but also of women's rights, the women in public policy program, the city for public leadership pe so i want to say a particular thank you to each of those groups for being part of the cosponsors here. you enjoyed, i hope, the title "why women won the nobel peace prize "and i have the enormous privilege of being in the entourage of president johnson surly, as you know, one of the three winners and graduate of kennedy school. it was so interesting why they chose two as women as a relative of arab spring and i think it was because of this -- this sta

adding there did not appear to be hostile intent well you know it was just a few months ago that paul krugman the new york times remember he wrote that story saying that the government should preclude we're being attacked by aliens and and to trigger one or two or three trillion worth of government spending as a way to get the economy jumpstarted by adding another three or four trillion to the debt of the economy so is our factoring large in this twenty first century economic model there is. no way for the economic activity of planet earth to cover the debt as a matter of fact if you were to burn every last barrel of oil left it would not generate enough global output. and extrapolating through the commensurate taxes to pay the debt the debt is on payable even if we burn every barrel of oil in the world there's not enough activity to pay the debt so i thought maybe if i look out there and see up above us what other dangers with possible hot hostile intent could be there and lo and behold i found hundreds of trillions of dollars of derivatives tweet from the new york post c.e.o. jamie diamond

between debt and unemployment will and why is it significant it's the correlation according to paul krugman and all the liquidity trap people should be pretty much zero before we get the zero bound and then after we get this down you should find some sort of correlation over the period from not in eighty two two thousand and twelve the correlation is about point ok so what is that right that man has got it well it says when dick goes up unemployment falls involves supposedly negative correlation ok goes up unemployment fall yeah because people are going up buying shoes you know and up goes the number of people employed to still shoes of people buying shoes that's the that's the basic theory that the trouble is according to croon that shouldn't be an issue except when we have a zero lower bound but since not from ninety ninety two to two thousand and twelve the correlation is a lot larger than monis point i know that's a really big correlation the biggest of these minus one ok so rather than zero that's my mind of sight is the point i was a long way from zero is what it's saying is that it d

. >> paul krugman is a little hyper. and when this started for me, he said that i would never -- never saw a spending cut i didn't like or some snide little crack. i think he needs to rest. >> jacki started her business, the snuggery a month ago. she charges $60 an hour to snuggle. >> i thought i need to validate my position. i need to have some kind of certification or license but it says i'm a qualified cuddler. >> joe biden v.p. of comedy. >> those walls are awful thin, i wonder how the hell my parents did it but that's a different story. >> every laugh. >> as barack says, a three letter word, jobs. j-o-b-s, job. >> god rest her soul and although your mom is still -- your mom is still alive. it is your dad that passed. god bless her soul. >> the joe biden v.p. of comedy tour. you'll v.p. your pants laughing. >> eliot: everybody loves joe. a report on penn state and jerry sandusky, not a laughing matter. a nightmare pure and simple. ♪ ♪ ♪ ♪ ♪ ♪ [ male announcer ] what's the point of an epa estimated 42 miles per gallon

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. >> there was talk that maybe, paul krugman, maybe that will raise expectations.on't see that happening? >> no, i don't, and i think the fed is in a very difficult spot. you talked about rightfully qe 1, qe 2, and twist. the fed came out with a study pulling out fed days from the markets and it's very impressive how much the fed has to do with the performance of the s&p over the last three years. that said, the market will be up tomorrow, but i think the market will be disappointed. >> it is and that's the question, is it not? how do investors invest against a environment where the expectations of being saved by the fed or the ecb are so high. what do you do? >> i think you buy the names that have blasted. coach is cheap and they will figure they problems out and they're great. china will build 100,000 miles of railroad next year, so there's a lot of reason to buy. >> volatility elevated in front of the fed. and that sends to train out. i think when it gets cheap enough you buy it. in the next six months the market will be lower than it is now. >> it's a traders m

i heard it most vociferously from another deja vu from this week, paul krugman and even alan simpson id that simpson never saw a spending cut that he didn't love. is it really, is it too draconian to the people that are in most need, simpson-bowles, judd? >> no, absolutely not. of course what's really draconian is if we continue on our present course the bankruptcy of the nation and passing on to the children of our country where the standard of living is radically reduced as a result of our refusing to step up and face the fiscal problems. warren buffett said you got to fix the size of the government of something you can afford. historically that size has been around 20% of gdp. unfortunately today we're at 24% of gdp and headed towards 28% of gdp, and what simpson-bowles did was set a number, set 21.3% of gdp as the size of the government and how do we get there? take about three-quarters of the reductions out of spending, you have to take about a quarter of it in new revenues which totals $4 trillion, $3 trillion of spending reductions, $1 trillion of revenues over ten years and th

i don't understand what economists outside of the real socialistic guys like paul krugman want to do this. nobody anybody that says raising taxes is going to get us out of the recession, do you? >> bill, you have got to understand this is not a serious economic proposal. this is a political gamble. >> do you think president obama knows that? he must know that first of all he knows it can't pass. republicans control the house of representatives. would never pass the house of representatives. and wire going to get down to the same situation we had a couple years ago post election where new year is going to bring a tax increase on everybody. the president not wanting to do that eventually went along with keeping the tax rates in place for everybody. >> you think he is going to do that again this year, right? >> i think that's where we will be sometime after the election. we will be in the same kind of standoff and my guess is that depending on if mitt romney wins the election it really won't matter because he will change everything once he gets in office. if the president wins election

. >> dick cheney and paul krugman. the odd couple. krugman is for borrow, borrow borrow. dick cheney said deficits don't matter, don't worry about it. >> this is not the only inversion we see. republicans are saying no, we can't cut government spending, ie, defense, because that will mean millions of job lost, imply that if you cut government spending, you lose jobs. the democrats are the ones saying we can't let taxes go up on the middle class at a time like this. which leads me to believe that movie you showed of the train, i think you should have put up the "titanic." it hits the iceberg and has that kind of crash. going into this election season, there's going to be no grand bargain now. hard to see one happen during a lame duck session. i think we will begin to see some of those sequestered cuts kick in. which will ironically make the budget deficit picture look a little better. >> that's true. they may hurt. maybe, peter, that would make it worth it, we take those sequester cuts. you let the bush tax cuts expire. it's painful, yes. but you do get more money. is it t

. >> eliot: paul krugman likes to say 8 percent of our economy and 14% is export.there anything that you think that the weather effect is going to be warm and will that bring hiring. >> there are 3.4 million jobs open in this country according to the labor department. there are 4.4 million jobs being advertised online. if america's human resources staff could get more aggressive and efficient about hiring and maybe the government should just pay these people a bribe. hire someone, and we'll give you $10,000. >> eliot: that will work. we'll cover half the cost of taxes. he always makes me feel optimistic. felix, your turn. >> it's not that hard. you give big tax break to any company which increases the number of people that it employees. it's not rocket science. >> eliot: republicans relishing every day that goes by with the recession. dan gross and felix many thanks. what is mitt romney's plan? that's one of his many secrets. stick around. this week, failing is good and wall street is bad. what else does vc billionaire vinod khosla think? of sununu, you're wrong. m

paul krugman put it this way.t would benefit rich meshes with bain's record of earning big profits even when workers suffered. a record so stark that mr. romney's attempting to distance himself by insisting he had nothing to do with bain's operation after 1999 even the company still listed him as ceo. michael steele and joe klein writes about the -- full journalistic integrity here, absolute. this issue, do we know what role at the point romney played in outsourcing? >> no, we don't and it really doesn't matter. in the end. what the obama campaign is doing is building this giant box that they're locking mitt romney in. and the lock on top of that box is his tax returns. in boxing, they call this kind of thing a paint job. it's when a fast, really dexterous fighter is fighting against the slow, plodding guy and he keeps on jabbing and jabbing him in the face and starts opening up cuts all over the face and he starts bleeding. painting him. that's what's been happening the last couple of weeks. >> are they getting h

. >> he wanted joe stieglitz and paul krugman and not... >> rose: larry summers. >> exactly.d... >> rose: so therefore in 2012 he has said you can't do this every term. >> i wouldn't be shocked if he did. i wouldn't be shocked and you remember at the inauguration the musical highlight of that was him with a chorus and pete seeger singing the full version of "this land is your land" with the two last verses that are about as radical as the song can get. >> rose: he's been in therapy for 30 years. >> one more year he's going to get it right as woody allen used to say. is. >> rose: looking for what? >> well, i think that, you know... >> rose: back to his father or... >> your parents may pass away but the past is never past. i can't pretend to be in his head. >> rose: you try to get there? >> we try but it's journalism. there are limits to that and you have to acknowledge them. it's a pretty weird life, too, remember. the degree of his privilege, to have a job where you go out on the stage and people literally are bearing you aloft and singing your name "brute!" i mean, jesus nev

nobel prize winners like paul krugman teach. huge drop in consumption and pullback in investment.needed it to prevent a second great depression. third, that health care bill. we as a country faced up for the first time in our history to our duty. we agree every american has to take personal and family responsibility for their health needs and agreed as a country to meet our duty on health and millions rely on emergency realms. we agreed that every american should meet their own health duty, not to dumb the cost on someone else. it is the president's duty now to tell people. this country's middle class that has health insurance. people that have health challenges, how this will make things better for him. he needs to sell the health care act. as if he were talking to a 2-year-old and he can do it. that's "hardball" for now. thanks for about with us. "politics nation" with al sharpton starts right now. >>> welcome to "politics nation." i'm al sharpton. tonight's lead -- an orchestrated smear. today willard mitt romney's campaign began an ugly coordinated assault on president obama.