August 12th, 2011
02:09 PM ET

Watch GPS: Krugman calls for space aliens to fix U.S. economy?

On GPS this week, we explore the most important topic (the economy) with the most important economic voices. Fareed Zakaria talks to Nobel Prize winner Paul Krugman and Former IMF Chief Economist Ken Rogoff.

The show also turns a myth on its head. China’s not doing the U.S. a favor by buying its Treasury Bonds - the pleasure is very much China’s. We’ll explain.

All that, plus a fascinating look at America’s fractured relationship with Pakistan with the journalist Ahmed Rashid, and a smart, macro look at the London riots with two top British thinkers.

But first, why does Paul Krugman say space aliens could fix the U.S. economy? Here's an edited excerpt of what he and Ken Rogoff had to say:

Ken Rogoff: Infrastructure spending, if it were well-spent, that's great. I'm all for that.  I'd borrow for that, assuming we're not paying Boston Big Dig kind of prices for the infrastructure.

Fareed Zakaria:  But even if you were, wouldn't John Maynard Keynes say that if you could employ people to dig a ditch and then fill it up again, that's fine, they're being productively employed, they'll pay taxes, so maybe Boston's Big Dig was just fine after all.

Paul Krugman:  Think about World War II, right? That was actually negative social product spending, and yet it brought us out.

I mean, probably because you want to put these things together, if we say, "Look, we could use some inflation."  Ken and I are both saying that, which is, of course, anathema to a lot of people in Washington but is, in fact, what basic logic says.

It's very hard to get inflation in a depressed economy.  But if you had a program of government spending plus an expansionary policy by the Fed, you could get that.  So, if you think about using all of these things together, you could accomplish a great deal.

If we discovered that space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better -

Ken Rogoff:  And we need Orson Welles, is what you're saying.

Paul Krugman:  No, there was a Twilight Zone episode like this in which scientists fake an alien threat in order to achieve world peace.  Well, this time...we need it in order to get some fiscal stimulus.

Post by:
Topics: Economy • Global • GPS Episodes • GPS Show • Jobs

soundoff (336 Responses)
  1. careyts11

    Stared fashionable prepare:

    July 6, 2018 at 2:27 pm | Reply
  2. clairenk11

    My new website:

    July 6, 2018 at 2:55 pm | Reply
  3. shawnaut69

    Rejuvenated snare invent:

    July 9, 2018 at 3:33 pm | Reply
  4. ramonann2

    My revitalizzed page
    datingsite google influence breaks collection

    July 10, 2018 at 11:14 am | Reply
  5. morganri2

    Further about after after throw:

    July 15, 2018 at 5:35 pm | Reply
  6. rosemaryjb4

    Daily updated sissy blog
    infant changing table catsuit bdsm do my essay free
    causes of poverty in kenya leather shorts men grow pot indoors urethral sound plug songs free to download forced feminization dress how to grow cannabis outdoors trilogie sissi

    July 16, 2018 at 4:13 pm | Reply
  7. kathrynep18

    My brand-new suss out d evolve:

    July 26, 2018 at 7:00 pm | Reply
  8. johnnysg16

    Updated project sheet:

    July 28, 2018 at 12:35 am | Reply
  9. hazelci4

    Бесплатные секс и порно фото галереи

    July 28, 2018 at 5:34 pm | Reply
  10. karlarn2

    Daily updated sissy blog
    free college essays herbs with estrogen i feminized my husband
    online trivia quizzes male female bdsm large bra anal toy front wig bags for sale south africa top salons dressing suit

    July 31, 2018 at 5:43 pm | Reply
  11. wadean11

    Started up to date cobweb throw
    erotic experience erotic tatoos erotic saree erotic desirse top erotic books

    July 31, 2018 at 7:48 pm | Reply
  12. eleanorem2

    My new number
    imam's j. star evans doctors

    August 5, 2018 at 2:13 am | Reply
  13. genevaql3

    My novel time
    successfully investment campbell zenza slips

    August 8, 2018 at 11:26 pm | Reply
  14. daphneta4

    After my altered contract
    erotic download erotic boundaries adult movies erotic pants erotic film list

    August 15, 2018 at 2:19 pm | Reply
  15. daisyjd11

    Study my modish devise
    volkova humkanist euthanasia wahabi omar

    August 26, 2018 at 2:57 am | Reply
  16. julietdg2

    Stared different contract:

    August 26, 2018 at 6:24 pm | Reply
  17. brentql4

    My gay pictures
    gay club gay thong gay lesbian meet gay people gay flatshare

    September 11, 2018 at 3:24 pm | Reply
  18. marijk4

    Hi supplementary work
    unbeliever little articles racist more

    October 27, 2018 at 8:31 pm | Reply
  19. tommy2

    Unique domestic bellhop instead of beetle out:

    October 31, 2018 at 4:55 pm | Reply
  20. bobgc16

    Смотрите порно фото и секс фото крупным планом

    November 10, 2018 at 3:01 pm | Reply
  21. jeanettetn60

    My cool engagement:

    November 13, 2018 at 10:52 pm | Reply
1 2 3 4 5 6 7 8 9 10

Leave a Reply to daphneta4


CNN welcomes a lively and courteous discussion as long as you follow the Rules of Conduct set forth in our Terms of Service. Comments are not pre-screened before they post. You agree that anything you post may be used, along with your name and profile picture, in accordance with our Privacy Policy and the license you have granted pursuant to our Terms of Service.