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Former CBO Director Doug Holtz-Eakin on the factors leading to a weakening U.S. economy.
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Earnings overshadowing weaker than expected GDP which shows the economy growing and an annual rate of 2.2 percent.
And we're gonna turn now to Douglas Holtz -- to get his sense of what is going on with -- economy are great to have -- -- this give us your sense of -- this slowdown and its impact and importance.
I was very disappointed in today's news I think most people have expected before the economy to grow more slowly than it did last.
Quarter when it was pump up a little bit by warm weather but.
The top line 2.2 is too slow to put Americans back to work and if you look inside -- I find it very troubling business investment was extremely weak and we know.
The complaints that the business -- had about the environment for investment US.
The policies they face from the EPA from taxes.
From body and -- are -- Consumers.
Provided over half the growth by buying cars and I -- just can't continue went income growth is so weak in the income growth this report was terrible and the last piece that bothered me was top -- inflation economy is all one and a half percent.
But for the household sector a full percentage point higher so we're seeing those gas prices and food prices take their -- on the household sector.
And it's mostly fuel prices driving this right.
Yet read it really is -- that -- a tough pocketbook issue we've seen it before.
When you've got to fill the car you don't have the cash to spend on other things and it shows up and how fast we grow.
If what are they what are there.
If they are available to us what are the policy solution short term.
We decide the election what can this president and actually do if anything.
Well I -- eight should stop threatening the business community with higher taxes -- he's doing right now with the student loan issue.
Waste stop threaten the business community -- more heavy handed regulation naive -- had lots of good examples of that.
There's almost nothing.
In the environment.
For the business -- that's promising and and that's an important.
Fact because.
They have the cash on the balance sheets and financial -- -- -- do better.
They just need to have the confidence gonna spend that money and thus far they haven't had it could be the biggest short term thing we can do.
With also get our deficits under control I mean.
-- we have debt now that's larger than our our entire economy -- and we know from the lessons of history around the globe.
If you get debt this high you pay too important penalties number one you grow more slowly about a percentage points lower on average.
In the US right now that means a million jobs were giving up.
And then you also -- the real chance of something looks like Greece or Spain or Portugal.
Why should voters not just dismiss this president altogether dismissed the Republican Party altogether.
Because issues are insurers I'm really very serious because both of these parties understand.
That these trade deficits or a drag on economic growth.
And -- represented.
It invariably a quarter two three quarters at least in some instances of for all percent.
Drag on GDP growth each year.
They know once -- -- deficits reach these levels.
-- significantly as you suggested.
So with both parties understanding that.
Why should they just not be locked up I -- Paul Ryan for crying out -- is a hero because he's talking about balancing the budget in 2000 or.
That's this country's idea about zero right now.
-- at least she's going in the right direction I mean it's not laughable it's dangerous the status quo is dangerous for America if we continue doing what we're doing.
We will have to see our social -- -- -- Just crumble under the burden of Reading we'll see the nation downgraded were already growing slowly but we'll have actually -- even more slowly.
We will leave behind to the next generation have broken economy and the enormous federal that.
That that's ridiculous path we have to change in -- in another direction.
Well to go in another direction we're gonna -- fact need new leadership.
In the idea that either party.
-- -- -- party showing courage.
And urgency in dealing with this issue to both scared to death of the third rail politics entitlements.
What are they gonna do what are we gonna.
Well I think in the traditional politics was -- you get reelected by promising to spend more cut taxes nothing ever adds up you don't worry about the efficiency of the government you don't worry about what you're spending money just do it.
That has to change and and you when I know that and if the sad reality is.
We haven't seen that change but circumstances -- gonna dictate that we have to have it it's not going to be.
The fact that they want to they are going to have to and -- governor Romney gets that duct.
I he certainly understands the numbers -- he's a Smart businessman.
And he's made -- President Obama was a Smart guy true.
It's not about smarts I think it's important and we will find out if the leadership capability is there have to be able to lead people who do not want to do something.
To go do the right thing that's where we are.
The results -- good to have you with --
