Paul Krugman is one of the most widely read economists on the planet by virtue of his New York Times op-ed column, which he’s penned since 1999. His latest book, The Conscience of a Liberal, explores the gradual unraveling of Franklin D. Roosevelt’s benevolent New Deal policies and what he views as its devastating effect on middle-class Americans. But we chose to confer with him on matters with less historical sweep: the worrisome state of the present economy.

How would you rate America’s standing in the global community in terms of our level of debt??Terrible. We’re the crazy uncle you can’t ignore, but can’t trust at all.

The economy’s been tanking of late. Are there any economic indicators that give you a measure of optimism? Actually, yes: The weak dollar is helping exports. So we do have some positive indicators to counteract weakened housing and consumer spending. The only question is whether it’s happening fast enough—which I doubt.

You’ve cited the president’s tax breaks for the wealthy as a major contributor to income inequality. Will it be difficult to repair the damage?they’ve done? It shouldn’t be too hard, if the Democrats don’t lose their nerve—the whole package expires at the end of 2010. The disaster will be if they fold and make the breaks permanent.

So you’re not a believer in the “rising tide floats all boats” theory? Right now the forces of increased inequality are moving so fast that growth just isn’t reaching most Americans.

Why are Democrats so timid about confronting such an unpopular president? I think they’re still afraid that he’ll say, “9/11, terror, 9/11,” and suddenly turn the public against them. I think the Democrats spend too much time listening to DC pundits; they should get out of the Beltway more often.