Solving the economic issues in America should be easy but the political climate is making it difficult for politicians to make the right decisions, a Nobel-prize winning economist told guests Tuesday.

Students and faculty jammed into Pitman Recital Hall Tuesday evening to hear Paul Krugman, a New York Times opinion columnist and professor of economics at Princeton University, discuss the current political and economic outlook nationally and internationally.

OU President David Boren asked Krugman what he would do if he could change the economy in the short and long term.

“If all political constraints were off, it would be all be easy,” Krugman said.

Krugman said more economic stimulus is needed to help reduce unemployment and improve the nation’s infrastructure, and that lawmakers shouldn’t worry about the deficit for another two to three years.

When asked how U.S. lawmakers should tackle the deficit, Krugman said the key to reducing the deficit in the long term is reining in healthcare costs and increasing revenue through a value added tax.

To control healthcare costs, Krugman said the way healthcare is paid for must change so that patients pay for results and not procedures. This would reduce waste resulting from paying for things that have no medical value.

“If you control Medicare and Medicaid costs then the federal budget will be manageable,” he said.

Because raising income tax is so unpopular, Krugman suggested a value added tax be imposed to assuage fears of those in higher tax brackets. A value added tax is similar to a sales tax, except it is a tax on the “value added” to a product, according to the European Commission.

“We seem to have a gap between what people want from government and what the government is collecting from revenue, and at least a significant part of that gap should be closed with more revenue,” he said.

“If we did all those things, I think we would quite easily resolve our current economic difficulties, and there is zero chance of any of these things happening,” Krugman said. “The problem is what do you do when particularly now you have a majority in one house of Congress which is just living in a different political universe.”

Krugman was skeptical when asked if income inequality played a role in the economic downturn. He said the housing and banking crises in the U.S. and Europe were similar even though income inequality is different between the two countries.

While he was uncertain, Krugman said income disparities hurt the economy because it wastes human potential.

“We have a large number of young people who are not getting a decent education, who are not getting adequate healthcare, which has a long term impact,” he said.

In 2009, 20 percent of children were below the poverty line, Krugman said.

“Those children, on average, are not going to grow up to be as productive adults as they ought to,” he said. “There is this sort of feeling that we’re gradually Third World-izing this country.”

Boren said the U.S. used to be No. 1 in the world in terms of access to higher education, but is now in tenth place.

“That’s a very dramatic decline. We’re behind Canada, we’re behind a lot of countries,” Boren said.

On the question of what the top priorities for the U.S. should be regarding future investment, Krugman said he believes infastructure needs to be severly repaired, but at a basic level first.

“Be skeptical of the more glamorous stuff,” Krugman said.

Repairing water resources should be the nation’s first priority, and then infrastructure investment should grow from there, he said.

When asked about his top worries for the future Krugman said that he fears lawmakers won’t trust a market solution to combat climate change. He said he also worries that current political problems could result in the government pushing for tight fiscal and monetary policies before the economy is fully recovered from the current crisis.

Once the lecture ended Boren escorted Krugman to the Oklahoma Memorial Union for a formal dinner and a question answer session with guests.