Kuttner: Another Great Depression A Bigger Risk Than Large Budget Deficits

This week on NOW on PBS, economist Robert Kuttner states what should be (but unfortunately isn't) conventional wisdom: that it's more important to get this economy going again than it is to manage the federal budget deficit downwards.

As Kuttner points out, our publicly-held national debt is currently around 40% of GDP, less than a third of 125% of GDP after World War II -- and the economy did pretty well after WWII. To address today's economic crisis, Kuttner recommends a huge stimulus plan to rebuild our antiquated infrastructure and to jumpstart our new energy economy, even if that means increasing our national debt to 60% or more of GDP.

The full video of David Broncaccio's interview of Robert Kuttner is available on NOW's website.

Update: Several commenters have argued that the national debt is much higher than 40% of GDP, pointing to an $11 trillion debt number. Let me be more precise about the number that Kuttner is referencing, which is indeed about 40% of GDP. Kuttner is talking about the publicly held debt, which is $6.4 trillion. (The balance of the $11 trillion number is intragovernmental holdings, i.e., government-to-government loans, aka the social security trust fund.)