If Mitt Romney is elected president, then the economy may experience another recession, according to Paul Krugman.
"I think there's a real chance that he'll manage to pursue a policy in the first couple of years that simultaneously blows up the deficit and depresses the economy," the Nobel Prize-winning economist said on HuffPost Live Wednesday. "Tax cuts for the rich, who won't spend them, and slash spending for the poor and the middle class, who will be forced to cut back. And so we end up managing to have a simultaneous deficit explosion and double-dip recession."
Tax cuts for the rich do not help economic growth, according to two recent studies, and some analyses have found that Romney's proposed tax cuts would help the wealthy the most. Romney also has promised to slash government spending by roughly one-fifth, which economists say would hurt consumer demand. But it is unclear whether Romney would be able to cut government spending so dramatically if Democrats maintain a majority in the Senate.
Krugman said that over the long term, Romney's economic policies could lead to a "depression," saying: "It's the Republican policies that are much more likely to make us end up like Greece."
Greece currently is experiencing a severe recession. One in four Greek workers are unemployed, including one in two young workers. Greece has been relying on bailouts to avoid completely defaulting on its debt.
At the final presidential debate Monday, Romney accused President Barack Obama of pursuing policies that would lead to a Greek-like debt crisis in the U.S. But that analysis failed to take into account that the U.S. budget deficit is shrinking, and that the Federal Reserve can weaken the U.S. dollar when necessary, while Greece does not have that same option for the euro.
"I'm not seeing a lot of evidence that he [Romney] really does understand it [economics]," Krugman said on HuffPost Live. "People say he's a smart guy, but it's not visible in his statements, and it's not visible in his off-the-cuff reactions either."