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Former CBO director Douglas Holtz-Eakin on the gap between what's really needed to fix the economy and political posturing.
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In his home slash spending and cut taxes New York Times columnist Paul Krugman says were already -- a Republican economy like that.
It doesn't work Krugman says quote.
And president Obama's case.
Much that not all of the responsibility for the policy wrong turn lives with a completely obstructionist Republican majority in the house on -- This argument is enough to get former Congressional Budget Office director Douglas Holtz -- -- -- not.
And he started out -- -- -- they -- I've done dollar.
I guess.
The argument that -- is implying is that what if we as a government he kept spending money nearly trillion dollar stimulus package.
As President Obama did early on in his term that the economy that we would be and now would be despondent mandate -- you don't buy that well.
Certainly the big -- -- spending because he's unhappy with president Obama's tight fisted ways you know we're spending.
About 24% out of every American dollar at the federal level higher than it's been in forty years.
And that's not enough for mr.
Krugman but.
If the written a real problem here is that it's wrong in history the president had control of the congress with Democrats for two years and did what he wanted Republicans didn't do that.
The policies that are actually in place the stimulus in the timely targeted temporary things are far away different than what you're hearing proposed by Republicans.
The real needs are fundamental reforms.
Fundamental tax reform which is such a radical idea that the president's own Bowles Simpson commission.
I recommend that it.
Fundamental entitlement reforms.
That are needed -- -- security Medicare Medicaid to keep the safe -- safe and to keep the economy actually feeling badly damaged.
The CBO's out of the reports say about the potential damage from.
Those programs -- long term and and the notion that what was -- slash spending.
You know we're working very hard not to have across the board cuts in defense because that's bad for the military that -- our national security and are better ways to save the money so.
It's a real mischaracterization I believe of what is actually needed for the economy and the history of what's gone on another matter -- -- You have -- if you look at things and look at these interest rates -- with the American government can borrow at a little more than one and a half percent a year over ten years.
Do you think that the government couldn't find a better way to invest that money and get an excess return out of that.
What we're hearing this argument that you know what we should just borrow borrow borrow -- it's very -- and someone whose opinion I very much respect -- -- off was written the definitive history of debt crises -- sovereign governments.
Aren't really points out that you know nothing's free and even when you're in a situation where church -- -- Our debt burden is a threat to the future wanna only -- more debt judiciously.
Our track record of picking investments what do you wanna talk about the quality of our infrastructure where where lot of pork barrel spending.
Those big cylinder investments.
The kind of things that HHS is now up to.
-- that that is an investment portfolio's worth borrowing for our -- large.
Economic advisor to senator John McCain's campaign in the last election -- How do you think.
Democrats.
-- which on the other side -- should run though will cause.
You can either get as Krugman suggests fingerpointing.
-- kind of -- -- Harry Truman and saying.
It's their problem not our problem or do you think that there White House -- proposed.
Massive spending.
No -- that they won't get it out of congress and say you know what we -- Well -- it's quite clear that president's policies thus far are unpopular.
So for him to -- doubled down -- -- want more of that my second term.
Is not going to be successful I think it's becoming increasingly clear that there aren't happy with the fact that he's just gonna say it's Republican's fault.
He is the president United States he had unilateral control the congress for two years.
He's shown no willingness to provide leadership -- these big issues so he's in a box where I think the best thing that they could do would be to recognize that there's an impending.
-- harm to the economy from a sharp tax increase the spending -- the end of the year and that he ought to come forward some real.
Leadership on that issue went and take away the near term economic threat for a for another recession.
I was so close to -- -- good to -- you thank you so much thank you look like and take care.
