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Paul Krugman: We Are In Economic "Purgatory" (VIDEO)

Huffington Post   First Posted: 09/23/09 06:12 AM ET Updated: 05/25/11 02:55 PM ET

Despite Federal Reserve Chairman Ben Bernanke's upbeat comments Friday that the U.S. economy is on the cusp of recovery, economists Paul Krugman and Robert Reich remain unconvinced that the outlook has gotten that much better.

Krugman acknowledged that we have seen some better economic numbers recently, but lamented our tendency to view the economy in black and white terms when the reality is more nuanced:

We've got a problem with terminology because we usually say either the economy is in recession or the economy is recovering. Either you're in hell or you're in heaven. And the trouble is we're actually in purgatory. We're actually in a situation almost for sure GDP is growing; almost for sure the business cycle leading committee will eventually decide the recession ended this summer. But almost surely also we're still losing jobs. The unemployment rate is going to continue to rise. So we're in that infamous jobless recovery state.

Reich was more blunt in his assessment, telling Stephanopoulos that "anyone who says we're out of the woods, or even moving out of the woods, has got to be lost at sea. There is no evidence that this economy is doing much better. The best that can be said is we're getting worse more slowly."

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