July 19th, 2014
11:07 PM ET

Krugman: It's starting to look like a recovery

Fareed speaks with New York Times columnist Paul Krugman about the state of the U.S. economy. Watch the full interview on GPS this Sunday at 10 a.m. & 1 p.m. ET on CNN.

So, Paul, the quick take on the U.S. economy.

Things are getting better, finally. It's starting to look, finally, like a real recovery. But it's not a boom. And this is after many, many years of terrible performance. So, relative to the way things have been for the last few years, we're feeling pretty good. Relative to anything anyone could have imagined, the worst down side you could have imagined seven years ago, it's terrible.

So I would say it's half full, half empty. More half empty than half full, because we should be doing much better than this.

And lots of people argue the only reason we're doing as well as we are is that the Federal Reserve has maintained these extraordinarily, very low rates, other kinds of programs that pump cash into the system.

Well, certainly keeping rates low – there's no rational reason not to keep them low. Basically, business doesn't see a lot of investment opportunities, people aren’t ready to buy houses in large numbers yet. So you have to have a cheap money environment.And at least, thankfully, the Fed has been doing its job.

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Topics: Economy • GPS Show

soundoff (27 Responses)
  1. Allan Kinsman©

    When it comes to money policy it is hard to see a sound agenda. It is hard to appreciate the current approach. I am not an economist and this is in short a reason to celebrate this fact. Hard to imagine a long term survivability with the current approach. People are borrowing money to speculate on investment. Since the morgage backed pyramide schemes of wall street damaged us to almost a breaking point now cheap money drives an over valued stock market. The financial genies of the twenty first century have forgotten about real value to a market and to the dollar. Lucky we have all these experts.

    July 20, 2014 at 1:28 am | Reply
    • ✠RZ✠

      Allan, you da man! A real recovery to me would be when manufacturing jobs begin to noticeably accelerate and houses in Detroit are not being auctioned off for about $34 to $40 grand. Jobs and wealth are not quite as "real" to me unless they at least somehow result in some useful, sellable, tangible product or asset that promotes a return on our invested human effort and furthermore produces real tax revenues to fund the government and reduce debt. Building a road to nowhere and running around scratching each others' backs really doesn't give us much to show for at the end of the day. The feeling of pride and accomplishment in producing the likes of power tools, furniture, electronics, cars, food, energy, and a myriad of other things is incomparable to sitting at a computer screen processing orders FOR PRODUCTS MADE IN CHINA!! That's not by any means to say that the likes of doctors, lawyers, bankers, politicians and artists don't serve any real purpose. But without ample natural resources and the ability to process them accordingly a gold mine can become become a ghost town when the ore runs out. And manufacturing is no different.

      July 20, 2014 at 11:29 am | Reply
  2. matslats

    Krugman and Fareed you are both ridiculous propagandists.
    You confuse a desirable 'recovery' and unsustainable 'boom'
    There is no recovery and there never will be a recovery. The dollar is all but dead. America is a pariah. The Federal Reserve and the whole banking system are mega-criminals who have stolen and wasted all the money.
    Stooges like you are just trying to keep the population ignorant about it

    July 20, 2014 at 2:51 am | Reply
  3. Joey Isotta-Fraschini©

    There is no recovery. The USA produces almost nothing that citizens of other countries are willing to buy except food, and too few USA citizens can afford our food without government assistance or personal sacrifice. Shop for meat, although government agencies auuure you that meat is a health hazard.
    Manipulation of economic figures is easy, even the Bible forbids usury.

    July 20, 2014 at 8:49 am | Reply
    • Joey Isotta-Fraschini©

      ERRATUM:
      "Manipulation of economic figures is easy. Even the Bible forbids usury."

      July 20, 2014 at 8:53 am | Reply
  4. snowandroyce

    I disagree with his assessment that Obama's healthcare reforms have worked. Mr. Krugman should be checking the real facts.

    July 20, 2014 at 11:28 am | Reply
    • marco60

      Why don't you tell what the real facts are? Please link you facts to qualified sources.

      July 21, 2014 at 6:08 pm | Reply
  5. chri§§y

    Amen @ RZ! Lol at least Detroit finally got their street lights back on! Too bad they dont have the police force to help make the city safe though! Mike Duggin is doing a good job given the mess he acquired!

    July 20, 2014 at 12:18 pm | Reply
  6. paul wiegand

    How about a balanced view from someone less to the left than Krugman. Are you a news show or just giving a microphone to those with one point of view? Please consider your bias.

    July 20, 2014 at 1:52 pm | Reply
    • Nick

      Right on, Paul. Krugman's Tweety Bird economic nonsense spews out left wing defenses in spades! Today he gave not one definitive example (numbers , please?) of how things are getting better. And to give Obama an A- grade for performance shows how far behind the curve he is. Maybe he DOES want a job with this administration. He'll fit right in with the others already there screwing up America.

      July 20, 2014 at 7:14 pm | Reply
      • marco60

        Give us some examples of his economic nonsense. Tell us what he's been wrong about over the past 5 years.

        July 21, 2014 at 6:10 pm |
  7. Debbie

    I've just watched the segment with economist Paul Krugman. As a conservative I find myself disagreeing with Krugman's cheerleader assessment of the Obama administration's performance, but in particular in regards to 'Obama Care'. My personal experience as a woman in her mid-50s looking for self-pd medical insurance, & who's family income puts us above the subsidy line, is not very positive. To tell my entire experience would take too much space; the most glaring misstatement I heard from Krugman is about the premiums. I have yet to hear anyone do a comparison of the benefits one is receiving for those premiums. So while it may be true that 'healthy young men in CA' are paying higher premiums (which I doubt is NOT the only demographic thus affected), how were the benefits for those with more "affordable" premiums affected? In my case, I'm now paying over $400/month so that I can keep my deductible at $500/yr, & I only had one insurance provider to choose from. That amount is only slightly less than what I paid for good COBRA coverage, where the premium was based on my husband's (the employee) age, which is mid-60s. I know that I'm fortunate to be able to pay the premium for a policy with a $500 deductible, because at age 67, my husband has a good job and we aren't having to live on Social Security income. But my other policy options for what I would consider an affordable premium would've given me deductibles in the thousands of dollars. That kind of negates the positiveness of a lower premium... There needs to be more discussion on the affect of the ACA in all respects, and not just on how many people signed up.

    July 20, 2014 at 2:36 pm | Reply
  8. YC

    I think Mr. Krugman is looking for a job in Obama administration, Obama care was a success ? really? most people I asked about it were mad as hell. A young man was outraged that he has to pay few hundred dollars more for health care for his family, many young people did not even signed up waiting to be sick before doing so. Three millions that signed up were the one that have been cancelled by their insurance companies. Ten percent that signed up did not paid their premium, 24 states did not participate. Many insurance companies already said they will increase premium next year, many doctors dropped out from participating in Obama care and the big one yet to come, when patients will have to pay the copayment and deductible plus 20% of the operation cost than you will see the patients declare bankruptcy and hospitals, insurance companies start to opt out of the program. Mr. Grugman before you declare Obama care as success you should wait at least a year to see if it is really works. What really make me mad is that Zakaria did not even asked any questions regarding his outlandish statements.

    July 20, 2014 at 2:38 pm | Reply
  9. chri§§y

    @ Debbie since you seem to be confused on your age...mid 50s vs 67, maybe youre confused on your premiums.

    July 20, 2014 at 3:15 pm | Reply
    • Joey Isotta-Fraschini©

      Debbie is not confused. She is in her mid-50s, and her husband is 67. The mid-60s figure concerned her husband's age under COBRA, their former coverage.

      July 20, 2014 at 3:51 pm | Reply
  10. Karen

    Cobra cost has nothing to do with age. the premium is based on the company's group policy not on teh age of the individual.

    To see the difference the ACA makes one would need to look at what individuals policies that cover the same things would cost... and I guarantee it wold be significantly more than now...

    But that said , a;though cheaper than before. ACA policies for someone in their 50's are still too expensive if you don't get a subsidy and do';t have a high income...

    In short a significant improvement over what was before, but not enough of one for those in the true middle class. The only thing that would really work would be single payer.

    July 20, 2014 at 9:36 pm | Reply
    • Debbie

      Karen, COBRA coverage has everything to do with age. True my husband's employer's insurance was part of a group plan, and that makes the premiums for the policies they offer to their employees less expensive than individual insurance. But the amount each employee contributes toward his or her premium cost is absolutely based on age. And if that employee leaves that company & is eligible for COBRA the cost remains based on his/her age. Since my husband was old enough to qualify for Medicare, he didn't need COBRA. As his dependent in this regard, I had the choice to take COBRA, & my monthly premium was still based on his age, since he had been the employee.
      I have been on COBRA 2x in my life, & in both cases the monthly premium was based on the former employee's age. Yes there is some benefit to the employer being part of a group plan price/coverage-wise, but what I'm having to pay for coverage that is benefit to benefit a poorer quality plan from one insurance provider cannot be considered affordable. I can choose to pay less, but then my options are little better than catastrophic coverage. To me that does not seem to qualify as a success.

      July 20, 2014 at 9:57 pm | Reply
      • Karen

        "True my husband's employer's insurance was part of a group plan, and that makes the premiums for the policies they offer to their employees less expensive than individual insurance. But the amount each employee contributes toward his or her premium cost is absolutely based on age."

        If have been on COBRA twice in my life and at neither employer was that the case. At my current employer the employer premium is not based on age either and the stated amount if you went COBRA on does not depend on age.. We all get the same info on costs regardless of our ages (I'm late 50s).

        I wonder why our experiences are so different!

        In any case the ACA has certainly made non employer based insurance cheaper

        July 20, 2014 at 10:48 pm |
  11. Debbie

    Thank you Joey, you are exactly right. My husband is 67 and therefore the premium for our insurance coverage when he was employed with a company providing an insurance benefit was based on his age. When he no longer worked there, he was able to go on Medicare, but I chose the COBRA coverage. Had the premium been calculated on my age (54), it would have been significantly less per month. There's a fairly big jump in cost for coverage between your 50s and your 60s.
    I readily admit to being confused about a lot of things, but medical insurance and it's many issues is not one of them. And I am certainly not confused about what options were available to me and what they cost per month.

    July 20, 2014 at 9:40 pm | Reply
  12. chri§§y

    @ Debbie my apology i misread your post. You really should hold your state congressmen accountable though. Because of changes they have made to the ACA that is why insurance premiums have raised so much. And if you do some checking on line you can find out exactly which companies have made significant contributions to them...that will give you leverage when you contact them! They are the ones that sold out american citizens! 191 extra pages added to ACA just to line their pockets! Everyone needs to hold their congressmen accountable...theyve thrown us all under the bus!

    July 20, 2014 at 10:12 pm | Reply
  13. chri§§y

    True @ Karen. And @ Debbie if you go to a Senior Alliance Center in your area you may qualify for subsidies to help you pay for your insurance! Or do some checking on line. I volunteer at an outreach center and we have helped many seniors get medicare reimbursement through this program. It cant hurt to check into it!
    :L good luck and God bless!

    July 20, 2014 at 11:06 pm | Reply
  14. chri§§y

    Oh and @ Debbie...your congressmen should also be able to help you with this also. Thats what WE pay them for...so dont let them off the hook! And remember also this type of medical care works quite well in other countries and if we make congress do their damn job it will work well here too! If you do that checking on them you will see also that President Obama did not profit financial from the ACA but they sure have!!!

    July 20, 2014 at 11:13 pm | Reply
  15. AG HILL

    Great program and great man but the population of the Netherlands is more like 17mil rather than 6-7mil

    July 21, 2014 at 8:41 am | Reply
  16. chri§§y

    @ marco im assuming youre talking about Obama though why you wouldnt just say so is beyond me. And its polite to address the PERSON you are scorning! In any case im sure there is plenty he has been wrong about, same as the rest of us humans!!! The one thing that comes to mind first and foremost is putting trust in that pack of romper room misfits in congress, that they would be able to complete their jobs without having someone standing over them and forcing them!!! They havent completed one single thing in so long its hard to recall what it was! Oh yea, i remember...they voted themselves a raise and shortened their schedules!!!

    July 21, 2014 at 9:22 pm | Reply
  17. Allan Kinsman©

    When I went shopping for health care after I retired some sudden surprises came forward. The first is your gross income is the amount the government uses to calculate your premium. When you file taxes you can take a personal deduction so they rewrote the tax code. Ok, thats cool but my s.o. would have to pay 1/3 her net income for a very basic policy. How is this a better deal? If we had a single payer insurance like other western nations you get a basic policy then if you want to add a more comprehensive coverage you can buy more. There are slightly different systems in these countries the details are slightly different but overall their costs are half. Washington seemingly plays at these important life changing changes yet no one knew what was in the law. It seems if it is either simple, or understandable it won't come from Washington.

    July 22, 2014 at 2:39 am | Reply

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