Chris Hayes noted on UP with Chris Hayes on Sunday that the Congressional Budget Office recently found, as others had argued before, that the sequester will not be good for the GDP.
“GDP will grow slowly in 2013 because of fiscal tightening by the federal government that is scheduled to occur under current law,” Hayes quoted the CBO as saying — in other words, the sequester and across-the-board budget cuts that Congress imposed on itself.
Without the sequester, the GDP would improve by roughly 1.5 percent, according to the CBO.
“What do you want to hear in the State of the Union?” Hayes asked Paul Krugman, the New York Times economic columnist and Nobel prize winner.
“What I’d like to hear, I’m not going to hear. I’d like to hear a full-throated endorsement of more stimulus.”
He explained instead what he did not want to hear: “This whole business with the sequester, all of this is, this is not the time for any of this, and the less he says about the deficit, the better. I mean I was really gratified by the second inaugural, because he said almost nothing about the deficit. He finally broke out of that beltway obsession with the deficit. So if he talks about other things, the middle class, inequality, climate, and not about what we need to balance the budget, that’s what I’m mostly hoping for.”
Hayes said he was intrigued by Krugman because he wasn’t some “scrappy outsider” yet speaks “very much as an outsider” with his deep-driving critiques of the Beltway.
“I’m still at some level a professor who’s moonlighting in this opinion business. And it’s a very insular culture in Washington. It’s one of people who hang out together, who talk to each other, who don’t listen. What’s odd about my position on this stuff is, I am for the most part not doing any kind of odd, unorthodox economics. I’m doing Macroeconomics 101. But that is not what people in D.C. hear. It’s not just that they don’t accept it. For the most part they haven’t even heard about it. This notion that, ‘Oh, maybe the budget deficit is not a problem when the economy is depressed,’ is barely in the Washington discourse. And because I am still in touch with Macroeconomics 101, I’m really sort of out of it.”
Watch the video, via MSNBC, below.