corporate-sponsored Fix the Debt campaign, insisted that Krugman's argument "makes no sense" because the Simpson-Bowles deficit-reduction plan "said we can do both," cut the debt and spur the economy.

"So two guys can write a report that calls for all kinds of good stuff and they can't even get their own commission to agree on the report," Krugman laughed. "And you're saying this should be our policy? We need to focus on what is urgent right now, which is creating jobs and getting this economy back to full employment."

"But the way you do that is to build a political coalition to do something about the long-term debt," Rendell declared.

"Have you been living in the same country as I have these past five years?" Krugman quipped.

"My message is, we've got a coming collapse if we don't take care of our entitlements," Scarborough remarked.

"It's a long way off, it's not necessarily even true," Krugman replied. "All you're saying is that we should lock in now the health care changes that we think we would have had to make within 15 years."

"Not just lock in changes," Haass interrupted. "We've got to make real cuts over the next decade."

"No we don't," Krugman shot back.

"Yes, we do," Haass said. "We have got to find another $2 trillion [because your argument is] based upon rosy assumptions you're right. But what if those assumptions are wrong? You're basically willing take enormous risks with the American economy."

"People like me have been saying for five years, don't worry about these deficit things for the time being, they're a non-issue," Krugman observed. "Other people have been saying, 'Imminent crisis, imminent crisis!' How many times do they have to be wrong and do people like me have to be right before people start to believe this?"

"You're right until the day you're wrong, and that's a bad day," Haass grumbled.