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FAO Economics Chief Economist Robert Brusca on the impact of the political blaming and name-calling on the economy.
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-- -- -- -- academy of fun to Tea Party is ramping up the rhetoric blaming the Obama administration what our next guest says while the two sides continue to point fingers.
The United States is headed into a recession and Bob Brusca the chief economist at FAO economics says the Tea Party has it wrong let's start with that sought.
What is the Tea Party have -- wrong.
Well I think the problem.
Loans right now -- pretty severe I think one of the problems at the Tea Party is that they're very ideological.
I think that if you wanna make progress you've got the bargain.
And helping you what I -- -- when the you won't give me any ground.
So I think there's a world problem you have ideology they have ideology and the Democrats have -- ideology there there.
They've been out of office for so long they wanna put these Democrat plans in place and so they don't really care about what -- I don't.
Anybody really.
Wants to get the economy going everybody wants to -- there ideology you're saying that that by putting up these these fights the Tea Party is competing legislation yes.
Now what what if it's bad legislation wouldn't that be a good thing to impede -- -- -- but what we we wind up getting is is nothing.
But we've had a lot of legislation that is worse than nothing that has in my opinion -- premium lot of people out -- driven the economy down.
Other driven the unemployment rate up driven driven our growth rate to zero.
Well.
This is the thing about demagoguery right you cannot you can blame the result on -- -- and and you want.
Endowed there's no economic model that's let me tell you exactly what caused -- -- -- even have a model that we show you when they're not -- model we show you something else but the ethical and honest what did you -- a one point four trillion dollar deficit.
Is a good thing.
I don't think it is actually what's happened in this for continuity is driving that it is not the economy is driving as politicians spending money that you -- that in this recovery government spending is probably the weakened standards then in about the last seven or eight recoveries.
State and local and federal spending has ban.
Extremely weak and you're saying that ended up with all these complaints about how big deficit as you're saying that spending has actually been awake yet as the I guess I still believe that keynesian economics could work I think Obama gave it a bad name because -- -- that badly.
And they in his first term that He was He -- -- gave it a bad now -- -- called Democrat agenda spending.
He really -- market's -- Health Care Reform He was interested in throwing money He has people.
And they didn't really try to get the economy and they didn't get as much when you ask it's always -- of the economy was that bad right.
But if you look at the economy the problem is that government spending to the state and local spending has not been strong it's been a drag in this recovery right.
And I don't know if when -- and when you were saying that government spending is down your not just talking about the federal govern because it's an -- -- saying of of local spending as well state and and -- and city spending and that has decreased dramatically so that's offsetting the increase we've seen in federal spent.
Actually federal spending has banned by itself looked at by itself as a standalone has been one of the weaker.
Federal spending this recovery that we have what part what index are you are you judging looking at GDP I'm looking at the as a percent of GDP.
Well -- -- you know if you look at the rise in spending from the.
The recovery this is that this is a very traditional way that economists look at this and.
The rise in spending from the -- every country that's not -- and very strong Malcolm got inflation as of now we're -- -- -- were high and the still high we're picking your economic brain.
When we start to see GDP turn around and start to grow vs slow down and -- I think that the problem that's the problem is occupants.
Republicans and Democrats.
Other than that big problems that affect the I don't agree.
And so there is no certainty nobody knows who's going to win.
Nobody knows we're gonna get those those deficits the you know brought in because the Democrats won't do -- nobody knows we're gonna get any near term stimulus because Republicans won't do it -- UK economy.
Has the austerity plan and it's not working -- to -- what austerity along with a look at the UK.
They're having big problems they're gonna have to make changes there that.
Why we need tremendous growth and that's the one thing by the -- everybody agrees on despite -- never really on Keynes I do agree and we both agree that this economy is poised to take off we have the Linas corporate sector ever we have smaller and medium sized businesses that have all this repressed energy that they're just waiting.
For the right signal to go and turn it -- But I hope you're right hope that there lean and they're not just anorexic and I think that they need another -- the arm Suffolk and I think.
That you know the government could help the government also could make it worst.
But I can and I can't I think that there are policies there -- could be helpful and I think that blocking the policies is not the right way to go you know moderates now where the right advice from the company's.
Distribution I thought that you're good to see about that I very much from all the way over here FAO economics good to see you thank you very much.
