Krugman: Recession 'gratuitous' because if Congress created jobs program it 'would all be over'

Paul Krugman, the New York Times columnist, economics professor at Princeton University and Nobel prize winner talked to Bill Moyers on Jan. 11 about what he believes is the best path forward to a strong economic recovery.

Moyers started by noting that 235,000 signed a petition that said Krugman should be the next Secretary of the Treasury.

When Moyers asked what the Treasury should do to help the economy, he said, "Campaign against this austerity obsession. We're not going to get a big new stimulus package, much as I would like to see it. No, we're not going to get it this year, anyway. But I'd like to see him saying when somebody says, 'Well, we need to slash here, we need to slash there.' And he would say 'Why would we want to be doing that now? That's actually going to hurt the economy.'"

"This is the same kind of animal that we confronted in the '30s. This is depression economics. And the nature of the solution is not really very different now from what it was then," he said later.

"Depression economics is when the normal things you do to boost the economy, have the Federal Reserve cut interest rates a little bit, are no longer available or effective. It's a situation where the normal rules of what you-- of economic policy, have to be put on hold, and you really need to do extraordinary stuff," he explained.

He argued that "the core thing, the thing that we know works, the thing that all the evidence of history says works in a situation like this is the private sector won't spend, government can step in and provide the spending that we need in order to keep this economy afloat."

He went on to say that the poor economy was "gratuitous" because if Congress could be convinced that "deficit spending, for the time being, is okay" and that a major jobs programs should be created, "it would all be over. It would be no problem at all."

Watch the video, via BillMoyers.com, below.