Paul Krugman is doing the rounds on his book tour (I saw him here in Philadelphia Tuesday night—yeah, I'm a dork, I got him to autograph my copy) and here he is on Democracy Now! to pound the drum for government spending. Oddly enough, Krugman's been accused of supporting austerity cuts, which just isn't true. For an hour, all he did was talk about how the government needed to spend our way out of this.

AMY GOODMAN: Well, for the remainder of the hour, we’re joined now by one of the world’s leading economists, Paul Krugman. He is a Nobel Prize-winning economist, an op-ed columnist for the New York Times, also professor of economics at Princeton University and centenary professor at the London School of Economics. His latest book is End This Depression Now!

Paul Krugman, welcome back to Democracy Now!

PAUL KRUGMAN: Good morning.

AMY GOODMAN: How do we end this depression now?

PAUL KRUGMAN: Spend. I mean, it’s really—it’s actually—the economics is really easy. If we were to spend more money at the government level, and actually, at this point, largely, just rehire the schoolteachers, firefighters, police officers who have been laid off in the last several years because of cutbacks at the state and local level, we would be a long way back towards full employment. Other things to do, we could talk about monetary policy, debt relief for homeowners and students. But the core of it is, right now, there just is not enough spending, and we need the government, which can do it, to step in and provide the demand we need.

AMY GOODMAN: To say the least, you’re going against the accepted dogma on all television among the so-called leaders of our country. Spend? In a time when the government has the debt the size it has?

PAUL KRUGMAN: Right. So you can always say, "Oh, you know, $14 trillion." Everything about the U.S. economy is huge. Investors don’t think it’s a problem. Investors are willing to lend the U.S. government money at 1.8 percent interest. This is not the time. I’ll be all for worrying about the budget deficit once the—once the economy is off the bottom. But it is not off the bottom. We are in a depression. This is the time to spend.

AMY GOODMAN: Where do you get the money?

PAUL KRUGMAN: Borrow it, and then repay it later in better times, which is not at all—that may sound funny, but that’s exactly what we’ve done in the past. That’s exactly—how did we get out of the Great Depression? We got out of it by—actually, we got out of it before World War II, but thanks to the spending that preceded World War II, thanks to the military buildup. A little factoid people may not know, just this morning: Which of the major economies in the advanced world grew fastest in the first quarter of 2012? The surprise answer is Japan. Why is that happening? It’s because Japan is now spending a lot of money reconstructing after the tsunami. And that spending is driving rapid growth in Japan right now. We could all be doing that.

AMY GOODMAN: Let’s go to Mitt Romney for a moment, the presidential candidate’s economic plans and his critique of the Obama White House. This is what he said Wednesday at a campaign stop in Iowa.

MITT ROMNEY: President Obama is an old-school liberal whose first instinct is to see free enterprise as the villain and government as the hero. America counted on President Obama to rescue the economy, to tame the deficit and help create jobs. Instead, he bailed out the public sector, gave billions of your dollars to companies of his friends, and added almost as much debt to this country as all the prior presidents combined. The consequence is that we are now enduring the most tepid recovery in modern history.

AMY GOODMAN: Your response to Mitt Romney, Paul Krugman?

PAUL KRUGMAN: Boy, you know, don’t even know where to start. I mean, Romney’s technique is that—since basically every word he says is a lie, including "a," "and" and "the," you never know where to start. But this is—the idea that the—first of all, that Obama is responsible for the large deficits is just not true. It’s overwhelmingly the result of the Bush tax cuts, unfunded wars and a terrible economic crisis that began, of course, under Bush. The idea that the deficits are what’s holding us back is all wrong. The deficits are in fact what’s keeping us afloat. If we had tried to balance the budget, we would now be in a full, full-on replay of the Great Depression. So it’s all nonsense. It’s—and, by the way, the idea of Obama as somebody who governs from the left, I mean, Obama is—Obama’s positions are those of a moderate Republican circa 1992. It’s not—he’s not a leftist. What’s happening now is you have a radical-right Republic Party.

AMY GOODMAN: Well, let’s talk about the Republicans, to House Speaker John Boehner, recently addressed the Peter G. Peterson Foundation’s 2012 Fiscal Summit.

SPEAKER JOHN BOEHNER: The failure of stimulus, a word people in Washington refuse to say anymore, has sparked a rebellion against overspending, overtaxation and overregulation. Americans who take pride in living on a budget recognize that we can’t go on spending money that we don’t have. And our economy is stuck in large part because it is stuck with debt.

AMY GOODMAN: House Speaker Boehner also advocated making long-term changes to programs such as Social Security.

SPEAKER JOHN BOEHNER: We can eliminate all the unfunded liabilities in Social Security, Medicare and Medicaid tomorrow, and the effect on the congressional budget 10-year window could be minimal. That’s because changes to these programs take time and need to be phased in slowly.

AMY GOODMAN: That’s House Speaker Boehner, who has also just revived the debt ceiling—the debt ceiling threat.

PAUL KRUGMAN: Yeah, so—boy, again, let’s leave aside the long-run budget stuff for the moment, and let’s just talk about—the idea that stimulus failed, it was never tried. Take a look at the actual track of government spending in the United States, and take into account the state and local governments as well as the federal, and what you see is, far from actually having a big increase in spending, we’ve actually had much lower. We’ve had austerity in the face of a recession, in a way that we have never had before since the 1930s. So it’s actually been the reverse.

And look, we’ve just done an experiment with what happens if you cut government spending sharply in the face of a depressed economy. That’s what’s been going on in Europe. It’s been going on in an extreme form. I’ve been saying, actually, we’ve basically had a large-scale human experiment, the kind that is banned under Princeton University rules, going on on the people of Greece, Spain, Portugal and Ireland. And the results are clear: it’s disastrous. It leads to very, very sharp economic contractions. Here, we’re having a minor version, though still terrible, of the Great Depression; there, they’re having a full-on replay of the Great Depression.

AMY GOODMAN: Contrast it with Argentina.

PAUL KRUGMAN: Ah, Argentina is an interesting story, because they broke all the rules. There are two countries that we talk about now, actually, people like me. One is Argentina. Argentina had something that was a little bit like the euro. They had a supposedly permanent commitment: one peso, one dollar. Became impossible, fell apart. There was a period of about six months of economic chaos, following, to be honest, then a rapid recovery. Argentina bounced back strongly because they were competitive again. The weaker peso made them able to export. You know, and they defied all the predictions of ruin.

The other story, which is more contemporary, is Iceland, which, in effect, did the same thing. Iceland, because of—the funny thing is, Iceland, the sheer scale of the financial disaster meant that they could not be orthodox. It was not possible. So they were forced to allow a devaluation, have some temporary controls on capital, repudiate some of the debt their bankers ran up. Iceland has a lower unemployment rate than we do right now. So, those are the stories that we should be looking to as examples that say this does not have to be happening.

AMY GOODMAN: So, right now, President Krugman—and that’s not making a mistake—what do you do starting today?

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“The media,” as it’s referred to, is not a monolith. We don’t just have one channel, one paper or one site with one nefarious dude pulling levers. “The media” consists of books, newspapers, magazines, television, billboards, radio, blogs, vlogs, ebooks, webcasts, podcasts and movies etc. The media is a vast and (kind of) diverse way of communicating information.

Let’s talk news. And where the majority of Americans – as in over 50 percent (by most estimates) – still get their news – from their local nightly news show. Any discussion about how unaware Americans are when it comes to news needs to have its finger pointed at the proper culprit: Your local broadcast.

Yes, everyone hates Congress but loves their Congressman. Everyone thinks “the media” is biased, wrong and awful – but tunes in to their local anchor with admiration and trust. A pox on them all, except our guy…

Last week a PublicMind FDU poll went viral with the line, “Fox News [viewers] are five-points more likely than those who watch no news at all, to incorrectly say it’s the U.S. that is bailing out European countries.” The under-reported story (buried lede as we call it in “the media”) was of those polled 67 percent said they watched their local news. And that could explain why 36 percent said they didn’t know who was bailing out Europe and only 30 percent gave the correct answer (Germany).

Did you know that Iceland is having a revolution as a direct result of the economic meltdown centered in the U.S. housing market? How about Syria being sanctioned by the Arab League? Vladamir Putin has gotten himself back on the ballot in Russia?

And it’s not just the “reading off BBC headlines” news the local news misses – it’s the actual local news: Investigative news in the public interest. News about the economy, politics and local issues.

Your local news opts to put a camera in the face of a crime victim and be a staple of “fear porn” rather than ever tackle difficult segments holding the school board/city council/mayor/state legislature/governor accountable for anything.

Why can I assume without sitting down and watching a week of your local newscast that they’re more than likely gleefully doing a recap of what happened on Dancing With the Stars/American Idol/Survivor tonight? Because your local broadcast news is more than likely ratings driven. And because of the last couple of decades of ratings driven local news our Edward R. Murrows have all become Harvey Levins.

Why are Americans not even rising to the level of ill informed and topping out at totally clueless? Because as Homo sapiens, we are effectively distracted by shiny objects and Kardashians. Plus our monkey brains got a chance to evolve this long by being on hyper-alert for danger, so we eat up any story telling us about “the hidden dangers lurking in our homes!” So of course we tune-in as told and in that way reward our local yokels for their reportage. And local yokels as Homo sapiens … also like rewards. It’s a vicious circle.

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If you'll remember, the citizens of Iceland stood up and said no to bailing out bankers, and their economy got better much faster because of it. Now they're helping to write the country's new constitution. They sound more American than our country does:

REYKJAVIK, Iceland -- Iceland's getting a new constitution - and it's really going to be the voice of the people.

The sparsely-populated volcanic island is holding an unusual election Saturday to select ordinary citizens to cobble together a new charter, an exercise in direct democracy born out of the outrage and soul-searching that followed the nation's economic meltdown.

Hundreds of people are vying for the chance to be among up to 31 people who will form the Constitutional Assembly slated to convene early next year - a source of huge pride for Icelanders who have seen their egos take a beating in recent years.

"This is the first time in the history of the world that a nation's constitution is reviewed in such a way, by direct democratic process," says Berghildur Erla Bergthorsdottir, spokeswoman for the committee entrusted with organizing the Constitutional Assembly.

Iceland has never written its own constitution. After gaining independence from Denmark in 1944, it took the Danish constitution, amended a few clauses to state that it was now an independent republic, and substituted the word 'president' for 'king.' A comprehensive review of the constitution has been on the agenda ever since.

Pressure mounted for action after the nation's economic collapse in 2008, an event punctuated by ordinary citizens gathering outside the Althingi, the parliament, banging pots, pans and barrels - a loud, clanging expression of fury. The meltdown was seen not only as a failure of the economy but of the system of government and regulatory agencies. Many came to believe a tighter constitutional framework - including a clearer division of powers - might have been able to minimize that damage, or even prevent it.

"It is very important for ordinary citizens, who have no direct interest in maintaining the status quo, to take part in a constitutional review," said Prime Minister Johanna Sigurdardottir. "We are hoping this new constitution will be a new social covenant leading to reconstruction and reconciliation, and for that to happen, the entire nation needs to be involved."

I posted yesterday that nuke-armed Pakistan is only a month away from bankruptcy. Now tiny Iceland looks like it might get there first.

Iceland has formidable international reach because of an outsized banking sector that set out with Viking confidence to conquer swaths of the British economy — from fashion retailers to top soccer teams.

The strategy gave Icelanders one of the world's highest per capita incomes. But now they are watching helplessly as their economy implodes — their currency losing almost half its value, and their heavily exposed banks collapsing under the weight of debts incurred by lending in the boom times.

... A full-blown collapse of Iceland's financial system would send shock waves across Europe, given the heavy investment by Icelandic banks and companies across the continent.

Iceland right now is apparently in a state of shock and gives a snapshot of what a depression with the Great in it will look like everywhere - "cafes were half-empty, real estate agents sat idle, and retailers reported few sales" says the AP.

And, just as Pakistan has begged the West for $100 billion to stave off economic collapse, Iceland has had to go cap-in-hand to a bigger power too. Only they've chosen the Russians - asking for a 5.4 billion loan to shore up the nation's finances.

That must be giving NATO planners conniptions. Loans like that, in the present climate, aren't going to come without strings and Iceland is the keystone in NATO's maritime defenses in the North West Atlantic, designed to keep Russian warships and subs containable in their home waters should the need arise.

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Iceland just had one "troop" on the ground in Iraq, (actually a press aide, not a soldier--Iceland has no standing army), but that didn't stop Bush from counting them as an equal member of his "coalition of the willing."

Oops, Iceland stopped being willing, they pulled him out. The genius hotties at AndyCobbonUTube take it from there, be sure to watch about 1:20 in for the Icelandic techno-rap dedication to the other coalition members who have found a way to withdraw their troops before 2013 (take note, Democratic contenders). When the world found out there were no WMD's in Iraq, a lot of them went home.

Here's tonight's open thread, but fans of the playoffs might want to keep John Amato's bonus baseball thread going tonight, as well.