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Bill Clinton At Deficit Summit: 'Paul Krugman Is Right In The Short Run'

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Former U.S. President Bill Clinton (R), founder of the William J. Clinton Foundation, and Bill Gates (L), co-chairman and trustee of the Bill & Melinda Gates Foundation, participate in an event sponsored by the Peter G. Peterson Foundation at the Mellon Auditorium May 7, 2013 in Washington, D.C. (Photo by Win McNamee/Getty Images)
Former U.S. President Bill Clinton (R), founder of the William J. Clinton Foundation, and Bill Gates (L), co-chairman and trustee of the Bill & Melinda Gates Foundation, participate in an event sponsored by the Peter G. Peterson Foundation at the Mellon Auditorium May 7, 2013 in Washington, D.C. (Photo by Win McNamee/Getty Images)

WASHINGTON -- Former President Bill Clinton began his appearance at Pete Peterson's annual fiscal summit Tuesday by approvingly invoking the name of the movement's arch ideological enemy.

Paul Krugman, The New York Times columnist and Nobel Prize-winning economist, has been the leading opponent of deficit hysteria and austerity, while Peterson has spent some $500 million since 2007 encouraging deficit reduction.

Clinton, interviewed on a keynote panel by MSNBC's Tamron Hall, began by saying he wanted to address "one factual dispute."

"I think everybody in this debate has an obligation to say what they believe," said Clinton. "I think Paul Krugman's right in the short run, and Pete Peterson and Simpson-Bowles and all those guys, everybody's right in the long run. And the question is timing."

By raising the specter of Krugman, the bane of the deficit-hawk movement, Clinton is sending another signal that the politics of austerity are waning. "It's obvious that if you overdo austerity, you get Europe," he said, noting 12 percent unemployment on the continent.

Clinton's very appearance at the summit, however, testifies to the movement's enduring strength. Clinton was sure to speak out Tuesday against the problem of long-term debt. He warned that if interest rates spiked unexpectedly, the resulting increase in debt costs would "make the sequester look like a Sunday afternoon walk in the park."

In another sign that austerity politics seem to be falling out of fashion, Peterson and his son attempted to walk away from the label. "The austerity movement thing gets conflated into anything that involves dealing with the budget. But that is just false if you are talking about some reform that doesn’t kick in for 10 years but has no impact immediately," Michael Peterson told Politico's Morning Money in advance of the summit.

Speaking before Clinton, Pete Peterson noted that "recently I've been called a deficit scold. Well, that may be half right." Peterson allowed that he is, instead, "a long-term debt scold," a problem he warned is a "primary, indeed a transcendent threat to our country's future."

UPDATE 2:01 p.m. -- "I think I'd rather have unnecessary root canal work than listen to a Pete Peterson fiscal summit, but that's good to know," Krugman said Tuesday of Clinton's compliment.

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