The Krugman Democrats

February 11, 2009 12:22 AM

ABC News' Teddy Davis reports:

New York Times columnist Paul Krugman spoke at the "Thinking Big, Thinking Forward" conference in Washington, D.C., on Feb. 11, 2009. Ferdous Al-Faruque/ ABC News

President Barack Obama's economic recovery package is still making its way through Congress. But a group of progressive activists and liberal academics are already worried that it won't go far enough.

"We're very aware of the [President Franklin] Roosevelt mistake of 1937," said Robert Borosage, president of the liberal Institute for America's Future. "The economy started to improve, he cut spending, and we did not get out of the Depression until the war started."

To push back against those in both parties who want to rein in government spending as soon as possible, Borosage's group has teamed up with Demos, the Economic Policy Institute, and the American Prospect magazine to organize a "Thinking Big, Thinking Forward" conference.

Wednesday's 800-person gathering, which is taking place at the Capital Hilton Hotel in Washington, D.C., is intended to make the case that "jobs-based growth" and a "broadly shared prosperity" will require far more than a short-term stimulus.

Think of this group as the Krugman Democrats, so named because its intellectual leader is New York Times columnist Paul Krugman, the Princeton professor who recently won a Nobel Prize for economics.

Krugman, who was recently named by Forbes Magazine as the most influential liberal in the U.S. media, will keynote the "Thinking Big" conference. Also on the agenda are Pennsylvania Gov. Ed Rendell (D), Rep. George Miller, D-Calif., and former Obama policy director Karen Kornbluh.   

Asked how he would pay for the sustained public investments in health care, education, renewable energy, and infrastructure that he supports, Borosage said he would close tax loopholes, raise capital gains taxes, and allow President Bush's tax cuts for wealthy to expire while also cutting the Pentagon budget.

Robert Borosage, president of the liberal Institute for America’s Future, spoke about the state of the economy and President Barack Obama's stimulus plan at ABC's Washington, DC, bureau. Ferdous Al-Faruque/ ABC News

"Once the economy starts to recover, you've got to pay for it," said Borosage. "You just shouldn't equate fiscal responsibility with cutting spending."

The Krugman Democrats acknowledge that Obama needed to pick off a couple of Republicans in order to get his recovery package through the Senate. But they think the White House blundered with its initial emphasis on post-partisanship and talk of winning 80 votes in the Senate.

"They made a huge mistake in their messaging on the recovery plan. They allowed post-partisanship to be a louder message than the crisis," said Borosage, referring to the Obama White House. "Instead of the debate being: 'Why aren't the Republicans joining this utterly necessary thing?' The debate became: 'How many votes does Obama have from Republicans?'"

ABC News' Ferdous Al-Faruque contributed to this report.