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Property Casualty Insurers Association of America CEO Dr. David Sampson on the obstacles holding back the economy from greater growth.
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What's up battle over taxes and Washington just days after the -- -- with the -- it house Republicans just passed a new legislation to cut taxes for small businesses.
And my next guest says policy is the key for our economy right now -- joining me is.
David Sampson president -- the property casualty insurers.
Association of America you guys need to get it Akron and -- that but welcome to DC David PCI PCI TCI did god know next time.
There are focused on everything around the world but you say really the central issue.
That our -- this held this with the regulation and over regulation right now.
Well I think you're right well look the we're in the midst of the most tepid.
Economic recovery in history.
If you look back at the three years after the end of the Great Depression the US economy grew at 119 and 13% and those three years.
We're coming out of the current.
Recession in the second half of 2009.
And in 2010 the economy grew by 3% in 2011 by one point 7% so there's obviously some thing.
That's going on that is are really restraining.
The regenerative power of the US economy and I think there are two keys to that one is.
-- the uncertainty that's out there are surrounding.
All of the big policy issues that have.
A weighed on the economy both consumer in the business and the second is just the weight.
Of excessive.
Regulatory overreach on every aspect.
Of US economic life.
Today you know David you talk about the inserting factor but I think there is a certainty factor.
And that is people.
-- whether the large businesses are successful Americans.
Feel like maybe they're gonna come on the even greater scrutiny greater attack and so.
Maybe they're holding back to that -- the -- -- we actually see is not necessarily.
A strike by the producers of the world of this country but some sort of real defensive posture that's making this just such an anemic recovery.
Well I think that's certainly a part of it the economy is driven by both the consumer which is the biggest part of the US economy.
And the most important.
Aspect for consumers as disposable income.
A consumer's disposable income is currently taking a real hit.
-- the increase in energy prices.
That's money that the American Stanley does not have to spend.
On no discretionary.
Items.
And it and then that just flows through to the business sector when the consumer retrench is that much.
US business sector is going to be very cautionary when it comes to -- hiring -- capital investment and and I think that.
Everyone is just kind of sitting on the sidelines right now.
Waiting to see what happens in the election later this year and whether congress is going to deal with the big train -- that we know -- gonna happen come January the first.
-- talking about those train -- -- I.
I get -- sort of challenge a little bit on consumers -- a sense that you know the consumer spending has been amazing in my mind that considering that there's been no wage growth.
Savings are starting to plummet and still people out there buying things now.
I know that that's not a combination that sustainable but it's things like consumers have actually stepped up to the point.
Well there is a bit of pent up demand I mean I think that that clearly since the financial crisis there were a lot of key purchases the families had.
Had deferred and and there's only so much time that you can defer.
Some of those -- purchases and I think that we're certainly saying that we've seen that in the automotive sector.
But but clearly when you see the kind of run up in.
In energy prices that we've experienced over the last couple of months.
That is going to have a major impact on an.
There we've got less than a minute -- wanna get to those five train wreck so what's gonna tell us what they are and quickly tell us what the the worst case scenario could be.
Coming January 1 you're going to unless congress takes action.
We're gonna hit the debt ceiling that was supposed to curious and between thirteen now that debt ceiling is gonna be reached -- and and 2012.
You've got the automatic -- spending cuts that are going to take effect January the first.
-- because of the failure of the super committee last year to come to an agreement.
And then you have the expiration of all of the bush era tax tax rates for personal income for capital gains for dividends.
For the estate tax.
And taken altogether the tax increases in the spending cuts could represent.
I hit on -- US GDP of about three and a half percent.
That is it that is something that's really serious.
That's going to hit -- we're.
-- should considering a lot of people think 3% growth will be great that completely wipes out what would you possibly see this year alone David Sampson president CEO.
Of the property casualty insurers association of America banks -- --
