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BUZZFLASH: If you had to make a projection, do you think Clinton's presidency –- specifically his economic policy and what he did in terms of generating jobs and creating surpluses –- will survive as his legacy, versus what happened afterwards with the Bush administration?
KRUGMAN: Well, I think Clinton's successes will be overshadowed by the scale of the disaster that followed. Not that Clinton will be blamed. I think historians will say, "Gee, there was a sensible, basically well-intentioned government that dealt successfully with a bunch of crazies."
A lot of good things happened in the 1920s, although there were a couple of really bad presidents. But all of that now, in historical memory, is colored by the realization of what followed afterwards.
I think that with the looming disasters of the budget on foreign policy –- and the things that really scare me, which I know we're not going to get into but let's just mention the erosion of civil liberties at home -– I think that, in retrospect, this will be seen in terms of how did the country head over this cliff. I hope I'm wrong. If there's regime change in 2004, and the new man actually manages to steer us away from the disasters I see in front of us, then we'll probably be talking a lot about the long boom that was begun during the Clinton years, and how it was resilient, even to an episode of incredibly bad management.
But I don't think that's the way it's going to play out, to be honest. Whatever happens in the election, I think that we've done an extraordinary amount of damage in the last three years.
BUZZFLASH: Looking just at the economic impact of Iraq, how much of a strain will that continue to be?
KRUGMAN: Well, there are levels and levels. I think Iraq is going to cost us $100 billion a year for the indefinite future. Now at one level, you can say, well, that's only about 20 percent of our budget deficit, and it's only about 5 percent of the federal budget. But on the other hand, it's being added onto a very nasty situation. It's a little unpredictable. I don't know how much collateral damage Iraq is going to inflict. At the rate we're going, it's clear that unless something happens soon, we're going to have a much bigger Army. It may seem like we have enough troops, but I've been talking to people, including officers, who are just crying about what they see as the degradation of the Army's quality because of all of this.
Right now, I'm trying to understand what a petroleum industry expert is telling me, when he says that some of the market futures suggest that the market is pricing in about a one-in-three chance that unrest in Iraq spreads to Saudi Arabia. And if that happens, of course, then we're talking about a mammoth disaster.
BUZZFLASH: I've got to say I don't know how you sleep at night.
KRUGMAN: I have a little trouble, to be honest. It's this funny thing: I lived this very comfortable life in a very placid college town, with nice people all around. And life is good. But some of us -– not just me, but a fair number of people, including my friends -- we've looked at the news, and we sort of extrapolate the lines forward. And there's this feeling of creeping dread.http://www.buzzflash.com/interviews/03/09/11_krugman.html
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