MSNBC host Joe Scarborough and Nobel-Prize winning economist Paul Krugman will appear on PBS' Charlie Rose on March 4, following weeks of their high-profile dispute over the proper policy response to two competing problems: historically high unemployment and historically high public debt.
After Scarborough hosted Krugman on the January 28 edition of Morning Joe, he wrote an op-ed for Politico that characterized Krugman as a solitary dovish voice on near-term debt. Over the ensuing weeks, the two sniped at one another, with Scarborough continuing his effort to marginalize Krugman, misrepresenting Krugman's colleagues in the process.
Both economic data and the consensus among economists support Krugman's side of the debate. Still, Scarborough has labeled the economist a 'debt denier,' and deflected fact-based criticism with jokes about "bloggers eating Cheetos" and “skewed graphs liberals make up on their mom's PowerPoint." Given that their debate has at times produced more heat than light, here are five things that host Charlie Rose must take care to include in his show tonight:
1. Debt Levels Are Stable For The Coming Decade.
The Congressional Budget Office says that the ratio of public debt to GDP will hold steady through the coming ten years, even without changes to current law:
The stable near-term debt outlook undermines the common claim of a “debt crisis” that requires immediate austerity.
2. Austerity Is Already Placing An Enormous Drag On Economic Growth.
Government consumption and investment has decreased nearly 5 percent over the past two years. Cuts have shrunk the public sector by a net 712,000 jobs not since the recession began, but since it ended in mid-2009. And the macroeconomic data are clear: the government's declining consumption is a drag on GDP growth.
3. A Wide Range Of Economists Agree With Krugman That Short-Term Deficits Are Not A Priority With Economic Output Lagging.
Scarborough's January op-ed in Politico claimed that "almost all mainstream economists" disagree with Krugman; this is not true, and an accurate representation of expert opinion would improve the conversation.
As Media Matters has shown, it is not just center and center-left economists like Richard Koo, Mark Thoma, Brad DeLong, Jared Bernstein, Dean Baker, Henry Aaron, Alan Blinder and Larry Summers who agree with Krugman that short-term deficit reduction is a bad idea with economic output so far behind its potential. It's also John Makin of the conservative American Enterprise Institute, The Wall Street Journal's Rex Nutting, former Reagan budget adviser Bruce Bartlett, and others who Scarborough might count as natural allies. Makin's prescription for how we ought to run large deficits is anathema to progressives, of course, but economists across the spectrum agree that we can and should float just a few more years of large deficits, in order to grow the economy.
4. Economists Say The Best Way To Solve Long-Term Debt Issues Is To Invest In Growth Now, While Borrowing Is Cheap.
Economic growth is the key to managing the debt. It is unusually cheap for the government to borrow money right now to finance such growth -- in some cases interest rates are negative, meaning the markets are basically paying us to borrow from them. The CBO finds economic output is $1 trillion behind what it should be, which is why so many economists take Krugman's side in calling for fiscal stimulus. The first CBO report to account for the “fiscal cliff” tax deal reinforced this position, as Nutting wrote in The Wall Street Journal's MarketWatch: “the CBO gently hinted that the government should run higher deficits for the next four years to boost economic growth and job creation, and then start reducing the deficit in earnest in 2017 when the economy is fully healed." Any conversation about fiscal policy that fails to note these facts is inherently misrepresentative.
5. President Obama And Congress Have Already Enacted $2.4 Trillion In Deficit Reduction Since The Start Of FY2011.
Although Scarborough blamed "a Keynesian spending spree" for a slowdown in economic growth late last year, the reality is that the President and Congress have passed laws that reduce deficits by approximately $2,400,000,000,000 over the 10-year budget window.
The media frequently fail to acknowledge existing deficit reduction, but it is real and it is important to the ongoing conversation about fiscal policy.