Economist Paul Krugman has long been critical of the GOP's handling of the debt crisis, even accusing the Republican party of taking the country hostage during debt ceiling negotiations.
In a video posted Thursday, Krugman said that focusing on the nation's deficit is "almost purely destructive," since it has caused short-term spending cuts that are "really harmful" and has not affected meaningful long-term change.
He added that he doesn't believe "any resolution of the long-term issues" is possible in the current political environment. Krugman argued further to CNN Money's Christine Romans that there is no urgent need to tackle the nation's deficit right away.
"If we don't [stabilize the debt-GDP ratio], then the result is that ten years down the road instead of being 73% of GDP, federal debt is 81% of GDP, which is still not critical," Krugman expounded. "So there is no critical even medium-term deficit problem."
The Nobel Prize-winning economist also explained why the debt crisis in the U.S. is unlike the one in Greece, and why the country doesn't need to worry about rising interest rates as a result of foreign speculation.
"The main thing is that the debt's in dollars. So we can't run out of cash--we print the stuff," he said, noting that Greece's debt is in euros. He continued: "Suppose that foreigners decide we're not reliable. How does that drive up interest rates? The fed controls short-term interest rates, long-term interest rates reflect expected short rates. How's that supposed to happen?"
On Thursday the Senate voted to pass a House bill that will suspend the debt limit until May 19. The legislation included a caveat, however, that withholds paychecks from lawmakers if they don't pass a budget by April 15. That caveat was introduced by House Republicans. The bill now heads to the Oval Office for President Barack Obama's signature.
The legislation passed in the Senate on Thursday also included an amendment that was struck down by the Senate that would have coupled the debt limit hike with dollar-for-dollar spending cuts, The Huffington Post's Sabrina Siddiqui reports.
Although the country now has until May 19 before it has to worry about defaulting, the next fiscal crisis in Washington is set to come sooner, as $1.2 trillion in spending cuts are set to automatically take effect March 1.