Krugman on reducing long-term deficits: It’s not hard economically, but ‘politically impossible right now.’

Yesterday, the Center for American Progress and the Center on Budget and Policy Priorities held a conference to discuss when and how to begin addressing the country’s long-term deficits. Nobel Prize-winning economist Paul Krugman explained, “This is a really bad time to engage in fiscal retrenchment; it’s a bad time on almost every dimension.” But eventually deficits will have to be brought down to a sustainable level, which, according to Krugman, is fairly easy to do economically. The problem, he said during an interview with The Wonk Room, is that we have a political system in which you can’t talk about tax increases “without it being political suicide”:

If we can do health care reform…that really does limit the growth in health care cost, then what’s left is a problem that we can deal with with fairly moderate policy. Things that would be politically impossible right now, but economically aren’t hard at all. [...]

You would end up still with the U.S. having lower taxes than almost all other OECD countries. And you’d end up with our social programs enhanced, not reduced, because we’d have universal health care coverage and some other improvements in the social safety net, and we would be good for the foreseeable future. All of this hinges on being able to actually talk about tax increases, even modest ones, without it being political suicide. It requires that you be able to talk about spending health dollars wisely and not have people start screaming about death panels.

Watch it:

The Wonk Room has more.