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Global Economy to See Years of Slow Growth?

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    Former Goldman Sachs Vice Chairman Robert Kaplan on the outlook for the global economy.

  • Duration 4:35
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Also this just stand the whole world is now down and out of says looking out -- the IMF cutting its global growth forecast for 23 -- That's right International Monetary Fund saying the holes that -- monetary recovery well.

Not fun and not happening and if Europe doesn't get its act together drive more likely reverse and to former Goldman Sachs honcho Robert Kaplan.

On how the world suffering is not over at least not yet but it's not the end of the world -- is professor good to have it.

-- that going to be here what do you make of this report.

It reflects the reality and I think what this is not going to be a short term problem we're gonna go through this for several more years.

Because we have a global be leveraging the likes of which we've never lived through in our lifetime.

Several more years.

Absolutely and we -- -- imitate those years what -- what's going it's what's happening in slow growth.

Slow growth you know we've gotten -- -- -- debt in the western world that needs to be paid off it will take to do if we do it right.

That means monetary easing and slow deleveraging.

Austerity.

Some stimulus if we do that we will Whittle this down and it may take five or ten years and and within that period.

We're gonna have very slow economic growth and by the way in my opinion.

This was destined to be what happened.

For it's been -- this has been preordained.

Once we got very leveraged in the in the early mid two thousands.

We you know.

But the slow -- Robert I could say.

But it's been barely any growth in a lot of -- -- that countries that make up the European Union.

It's been in reserve reverse has been in recession and and and -- in Spain.

You know -- one out of four people out of work it gets worse -- almost that -- -- right now.

So then this further.

Onus on on the countries that are doing okay relatively okay to pick up the slack and they will -- Their -- doing everything they can't I think they're gonna -- sluggish way including us.

That the fact of the matter is deleveraging.

Is very destructive.

To GNP growth and asset values the reason it hasn't been as bad as it might have been.

Is we've had.

-- fair significant amount it fiscal stimulus at least a few years ago and a lot of monetary easing.

By the western.

You know monetary authorities.

And I think we're gonna need to continue this this is gonna take a number of more years and even though I've mentioned this you before in the presidential election.

You think Obama is the only one gonna do infrastructure spending I don't think so Romney's gonna do it too.

Because when they look at the facts are gonna realize austerity alone will not cause us to the leverage we need some amount of stimulus.

Part of his stimulus plan -- his Mitt Romney uses tax cuts in the like but I do want what you hear what you make of these Bain Capital attacks when.

Mitt Romney left -- -- it was a decade ago almost a decade ago.

You know -- you know Mitt Romney you know the financial arena well from your Goldman Sachs days.

Is this a worthy pursuit.

Pursuing that's.

Yeah I mean I think I think like any industry there -- private equity deals -- private equity firms that add value.

And there have been examples in private equity -- companies have been exploited over leveraged.

And have been damaged and people have been damaged and did -- democratically through.

It and that's what happened was a little hot I think I think in some.

Companies in some cases on the whole I know the guys that saying that the people at -- and I should say.

And they come out with a consulting background they're looking to add value and I think they tried that -- will you have failures yes I think the mistake.

For Obama.

And I say this is someone who voted for Obama in 2008 all of this disclose that.

I think the mistake is attacking business is not what we need right now and I know wants to attack Romney.

But I don't think it's good for the country.

To be attacking business -- we need business if we're gonna go through this deleveraging and that's what bothers me about it.

You mentioned voting for the president for years ago -- you do so again.

It's well will will talk about that another time.

Let's against us I think that's it.

-- yeah I'm afraid so yes aren't always good -- -- Robert Robert Kaplan.

Former Goldman Sachs vice chair.

When we come back.

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