'This Week' Transcript: McCain

TAPPER: Well, 15 years ago, Elena Kagan criticized Supreme Court confirmation hearings as a "vapid and hollow charade," and there you go.

Joining us to discuss that and other topics, from the Council on Foreign Relations, Dan Senor; from Univision, Jorge Ramos; from the New York Times, Paul Krugman; from Bloomberg, Al Hunt; and from the Atlanta Journal-Constitution, Cynthia Tucker.

Let's start with more bad news on the economic front. Let me put up some numbers here. In June, we found out 125,000 jobs were lost, only 83,000 private-sector jobs were created, and we also heard that in May pending home sales were down 30 percent.

Paul, have we made any headway in the last six or seven months?

KRUGMAN: On the things that matter, no. Basically, we're -- we're holding. The fraction of the adult population that's employed is basically flat, which is saying that we're -- you know, we're not -- things are not getting worse, but they're not getting better, and we're in a bad place. So, no, this is not good.

TAPPER: And you think we should do what? What do we need to do?

KRUGMAN: More stimulus. I mean, we -- we had -- you know, right from the beginning -- you know, luckily, some of us have a track record. Right from the beginning, January-February of 2009, looking at the scale of the crisis, we said this program -- although it sounds like a lot of money, $700 billion or $800 billion, is actually not enough, that you need something bigger.

But for a variety of reasons, we didn't get a program that was bigger, and we got a program also that starts to fade out just about now, middle of 2010, by which time, you know, the assumption was that -- that we'd have a self-sustaining recovery underway, but we don't, which was always a serious risk.

So, no, this is -- this is a pretty grim situation. We really should be going in for another stimulus program which has a chance for approximately minus 5 percent of getting through Congress right now.

TAPPER: Are we facing a double-dip recession?

KRUGMAN: You know, our terminology is not helping us right now. Suppose that the economy grows at 1 percent for the rest of the year or next year-and-a-half and the unemployment rate rises to 10.3 percent. Probably that won't be considered a recession, because GDP is growing.

We're producing more stuff, but we're actually losing ground on the jobs front, so that's the most likely -- you know, I'm not sure it'll be -- unemployment will go that high, but the most likely thing is something where it isn't formally a recession, GDP isn't shrinking, but the job market is losing ground, certainly not gaining ground. It'll feel like a double dip, whatever the recession data say it is.

TAPPER: Cynthia, is it even possible to pass another stimulus in this Congress? I mean, we can't even get passed unemployment insurance extensions or $50 billion in emergency spending for cities and states. Do you think Congress can pass a stimulus?

TUCKER: Jake, I think it is absolutely crazy that the Senate has refused to extend unemployment benefits. If they won't do that, it's pretty clear that they won't pass the robust kind of stimulus or jobs bill.

I think it's bad news for the Democrats to call it stimulus, because that has -- as a brand, that doesn't go over very well with the public. But the jobs bill has gotten smaller and smaller and smaller, and even that seems to have very little chance of passing.

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