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Harvard Economist Jeffrey Miron on the potential risks to the economy from the looming fiscal cliff.
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Right -- finally ready to some good news well we have a few glimmers of hope to report today on the economy.
Weekly jobless claims fell by 6000.
Most economists weren't expecting that well.
An American exports to the rest of the world went up from that actually hit a new record so we can make all this.
But that's Harvard economist Jeffrey -- and Jeff let's start with here at home jobless numbers get a little bit better -- people -- for the bottom on housing to believe any of that.
I think it's probably about right to me we shouldn't make too much and anyone weeks or -- one month's numbers but.
Overall the economy has been growing positively.
A fairly consistent raged for about two years it's not as fast as we're used to after a big recession.
And we still are not really catching up to the path we were on before the recession.
But overall I think we're likely to go in a reasonably positive direction unless we are hit by big negative shock mount attacks cliff.
Coming at the end of the year is potentially a really big shock.
And things in Europe our protection a really big shock so there's lots of minefields out there.
And yet our exports to Europe were up one point 7% more than the overall number of point 9% you know.
But toy percent of our exports go to York -- -- -- anticipated they were gonna -- the helmet so that's kind of got to be some sort of glimmer of hope to now.
Yeah I mean it but again 11 month's data are -- we have -- -- so you shouldn't put too much weight on that.
And second you know Europe is not.
Yet sort of falling apart Europe is not growing particularly fast but the countries and really big trouble -- the smaller countries in Europe like Greece.
Time Spain not the big country like France Germany so you know.
It's one is backed out of a whole range of economic statistics so we should pay attention some attention to it but not make too big -- deal out of it.
Okay but let's make a big deal out of the fiscal -- because I do think it's a really big deal and I know that you think actually we should split.
Economy to -- out of it right tax hikes and spending you think that they can sit down on two separate occasions we can't get them to sit down.
And conquer one thing.
-- I have no hope that there are actually gonna agree to anything sensible.
But.
What I wouldn't want to emphasize is people are talking as though both the tax hikes.
And the spending cuts -- are gonna be disastrous for the economy.
I think the right view is very different I think the tax hikes are indeed disastrous think the spending -- Are for the most part a great thing even the ones that the Republicans are trying to protect the defense cuts.
Hey there's no reason the US should be paying for Europe's defence there's no reason US still needs troops in Korea.
And Japan all over the country there is tons of stuff in the defense budget to cut and conservatives -- all people should recognize that.
When government gets really big -- do inefficient things it tends to gets let spending get out of control right so we get rid of a lot of wasteful spending.
That's good for the economy not bad for the economy.
When you get some much Joseph Stiglitz in an interview with the Associated Press he seems to think we have up -- With the deficit and cutting debt I mean I think we have loads a fetish is is.
But issues -- Susan we have an artist but I'm not sure the deficit is one of them I mean I would think he got a new altogether not.
Well I think he's in one level right to say the deficit percent is not what we -- focus because the deficit as a result of two different decisions.
Tax decision spending decisions.
And I think that the problem is the expenditure we need to radically cut expenditure -- Cross a huge range of programs.
And but I think is completely wrong to think that the path we're on the spending and tax -- -- on.
Isn't a problem it's issues problem it's not a huge -- for 1015 years but it's comedy.
And it's enormous so we have to do something about it.
It's not about what many would think -- -- Crazy liberal immigration policy you will have been scary and you you're basically saying -- we should open the borders and let mom and aren't you.
I would probably be quite open of that but let's talk and -- -- are more plausible given the political realities.
I think it should be pretty easy to convince people to expand H one B visas for high skilled engineers doctor -- scientist etc.
I mean.
There's no obvious risk of any kind by letting people who came -- United States got educated we're train partially at our expense.
Stay here and help create new ideas take these high tech jobs and help produce great products and innovate here.
On the low skill side.
All that in of all that migration from low -- people that helps keep labor costs down.
When people are allowed to immigrate legally that means there are more likely to pay taxes that helps to deal with entitlements so funding crisis and so on.
So I would certainly advocates substantial increases in the amount legal immigration.
Yeah cause the board and it seems a lot of people don't want those low paying jobs here in the United States maybe we should give them to our.
Immigrant bread and -- Meier from Harvard thanks so much for sharing your thoughts.
My.
