On Monday’s broadcast of “Morning Joe,” New York Times columnist and Nobel Prize-winning economist Paul Krugman argued that “deficit things” aren’t something to be worried about, at least for the time being. But according to Steve Rattner, the Obama administration’s former “car czar,” Krugman’s analysis is the economic equivalent of climate change denial.
On Tuesday’s “Morning Joe,” Rattner reacted to Krugman’s remarks by making the analogy between climate change and the government’s long-term fiscal challenges, and suggested that both are problems requiring immediate attention.
“[T]o me, being a debt denier is the same thing as being a climate change denier,” Rattner said. “We’re putting millions of tons of carbon in our atmosphere every day that we are going to have to deal with, and we’re incurring billions of debt every day we have to deal with. And sure, they’re different problems, but I think it’s the same issue. Do you recognize they’re problems and deal with or do you simply let them, or do you sit and let them fester until something bad happens?”
Rattner admitted there were economic problems to be dealt with in the short-term. However, he said a framework is needed now to deal with America’s unfunded liabilities before the situation gets any worse.
“We do know what the problem is going to be in 20 years,” Rattner said. “You don’t know exactly. You have to have assumptions about economic growth and a bunch of things. But, within an order of magnitude, we know the problem is going to be worse. We have about $60 trillion of unfunded liabilities now. We know the number is only going to get bigger. The longer you wait the tougher it is.”
“I get the argument that jobs and the economy are still weak and we need to deal with that,” he continued. “But that’s fine. You can have responsible proposals for dealing with that. Larry Summers has put forward some responsible proposals for dealing with that while simultaneously recognizing that we have this huge long-term problem we’re going to have to deal with and we ought to start now to at least put in place a framework for how we want to deal with it. And that’s what bothered me: That Krugman has rejected all of that and basically said wait until we get out there and then see what the problem is. It’s like waiting to see after we put a lot of carbon in the atmosphere and see if we can still breathe.”