On the "This Week" Roundtable this morning, former Republican Speaker of the House Newt Gingrich and Nobel prize winning economist Paul Krugman agreed that the Obama administration will need a second stimulus package.
Paul Krugman: "I think they’re going to have come back for another stimulus plan in the end, because unemployment is going to keep rising even if we have an end to the recession formally. The last recession, unemployment kept rising 18 months after the recession was declared over. That’s going to happen again. So they’re going to probably find the need to do more for the economy and that’s when they’re going to have to go to Congress."
Newt Gingrich: "I think there will be a second stimulus. I prefer to see it on the tax side rather than the spending side. But there’s going to have to be some dramatic effort because I think this is not going to work. I mean I think they’re going to find out they’re not able to turn it around. If you talk about stopping the slide, it may or may not work. If you talk about launching a major recovery, I think there’s almost hope the current plan is going to work."
George Stephanopoulos: "But how do you reconcile your call for, and the need for a second stimulus with what you were just saying earlier about the budget cuts and taxes? "
Newt Gingrich: "I think Paul’s right. You have six trillion dollars you’re running with if you want to become Italy. But the fact is that we are in substantial trouble. And I think part of what we ought to look at in the long run is that maybe some of these states instead of raising taxes should actually be controlling government and cutting spending."