Christina Romer lets loose on credit downgrade: We’re ‘pretty darn f—ed’

Steven Nelson Associate Editor
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University of California, Berkeley Professor Christina Romer, formerly chair of the White House Council of Economic Advisers, appeared on HBO’s “Real Time with Bill Maher” Friday night.

Romer — who resigned in 2010 after inaccurately predicting that the $800 billion stimulus would lower the unemployment rate — said that the S&P credit downgrade was a sign that the country is “pretty darn fucked.”

“The long run budget situation is abysmal,” Romer said. “And it has been abysmal going back at least a decade. So it was never an immediate emergency. And it is something that we absolutely needed to deal with, but we didn’t need to deal with it today, we didn’t need to deal with it a week ago.”

Maher asked Romer, “How uncontroversial is Keynesian economics?”

Romer said, “The basic idea that if you increase government spending or you cut people’s taxes that stimulates the economy and lowers the unemployment rate, is a very widely accepted idea. It’s in every economics textbook, that’s what we teach our undergraduates, and I certainly try to teach them the truth.

“It is a very known and accepted idea and fact and the empirical evidence is definitely there, and people just want to say the sky is green.”

Maher asked Romer how she felt about being “Palinized” by Republicans who aren’t economists. She said, “Policy would be better if we listened to the experts.”

During the interview, Maher lashed out at Romer for her dogged defense of the president. “Fuck you! He fucked up. He’s not your boyfriend,” Maher said.

Romer wasn’t shaken in her defense of Obama. She said, “He made lots of good decisions, and they were based on science, they were based on the evidence, they were based on the best evidence that he had.”

Maher then asked her if she agreed that the stimulus should have been bigger than the “half-assed” one passed in 2009. Romer agreed that “it should have been even bigger.”

Romer said that although the stimulus should have been bigger, it isn’t too late to pass another, larger stimulus now. “What I want is more now,” she said.

“The president today started talking about a very sensible plan of a tax cut for firms that hire veterans, and I want to say ‘there are 15 million other unemployed people, let’s do a big tax cut for any firm that’s willing to hire,'” Romer said. “So someone ought to be making the case for swinging for the fences, not [for] small programs.”