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The nonpartisan Congressional Budget Office releasing a new report today saying president Obama's 2013 budget will hurt the economy in the long term.
It claims larger deficits would end up reducing the amount of capital available to businesses.
Here to weigh in Peter reaching peak -- At the University of Maryland Peter welcome back to the show I want to show folks some numbers from the CBO study.
Basically the CBO hearsay and at that Obama's when he thirteen but it would reduce economic output from -- half percent to 2.2.
Which could tip us into recession what do you make.
Well I think is -- -- problem here you make -- only keep the economy on steroids are pumped up on deficits for so long.
All those deficits crowd out private investment.
Opportunities to improve productivity exports things of that nature that is starting to happen and the economy is slowing.
Well Ed Ed do you agree with that they have the analysis right -- they to and well I think the economy's going to falter much worse because of these big debt deficits when the time comes the question is when does it come.
In the second quarter after the election it does it come too late politically.
But the economy is slowing it's not getting up the kind of flying speed that it needs.
And you know the Chinese -- Bob -- -- buying our bonds anymore.
And as a consequence.
All this government borrowing is crowding out private investment that's why it regional banks have no cash and small businesses can't expand.
So you look at the recent economic data.
It's fairly troubling jobs are down disappointing home sales in March manufacturing manufacturing activity down.
Do you see a recession coming.
Our recession is coming the question is -- and the economy is growing so slowly it's like an airplane flying accrue over the grounds they buy a hundred feet and the slightest bit of turbulence will knock it down.
The only question is when does that happen.
A lot of people are worried about another recession but they tend to look at Europe.
As a thing that's gonna make it happen you say no there's there are bigger problems with the economy here.
Do you think that for example oil prices will play a role or Europe is are there any other issues.
Well this oil prices and -- Europe but also there's this mounting debt that consumers are piling up again.
You know consumers are are are been barring a lot of money to keep the automobile industry going essentially.
That this savings rate has gotten woefully low at some point to consumer pulls back.
And then the natural dynamic is to the economy to fail certainly a crisis in Europe could do it certainly gasoline at 450 a gallon could do it but does might not be necessary it may just -- the natural process that the consumer running out of money.
-- -- -- Well we have to basically cut back on the government.
We have to -- -- we at the start developing domestic oil very rapidly that's free stimulus its private sector money that would -- two and a half million jobs.
We have that is something about the trade deficit with China we have is something about health care repeal obamacare the cost of obamacare are so burdensome on American competitiveness.
Because 8000 miles per person in the United States provide healthcare -- Germany -- a private system for something's wrong with our system.
You know and finally the bank regulations mean small banks just can't operate with telephone book -- regulations for praising -- house.
Absolutely -- -- -- thanks for coming on tonight we really appreciate your time.
Nice to -- -- you.
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