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First Trust Chief Economist Brian Wesbury on the impact on the economy of iPhone 5 sales and Fed policy.
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As a record but -- last year's iPhone four S -- by only a small margin however demand was not the problem it was supply.
Most Apple Store for sold out by yesterday evening and even what I've done by sales disappoint my years than economists and tech analysts predict that apple sales exploded.
Give the US economy a big this -- -- on that question Brian Wesbury chief economist at first trust advisors right come on relate.
Apple's billion of this video as a company line.
And -- hate it could Cheryl.
You know you know -- -- thing about this is we have a little bit of historical precedent that people don't remember don't know about.
But in 1964.
Ford came out with the mustang.
And everybody had to have wonder you know are close to it.
And it actually boosted growth and so.
Remember if if you waited for the last three months and to not upgrade your phone because you were waiting for this new one.
That means it held back retail sales in last quarter and it could boosted in this quarter.
And so -- it could boost growth for a for a temporary.
Time period.
Okay here's the thing Bryant as we're as you're talking my at my stage manager -- through throughout the -- -- for me.
So but besides the fact I'm reading this text messages right now in Benin Burris appointment.
You know he's the likes it Benny Benny says is actually a good -- it's a good phone is that enough to keep people going out and replacing the -- -- Which frankly I I see much of the difference between the fluorescent and the five I mean you tell -- you think its -- Rate of the products.
Well look I am I at.
At Cheryl I am not an expert on apple -- owns I actually personally use a Blackberry.
I'll call eight crazy years something Ryan but my wife uses an iPhone she wants the new.
IPhone 5.
Everyone I know that uses an Apple iPhone once the iPhone 5 and I.
Think the key here is it's faster it's not a four G network.
They're the apps will move faster we'll see more downloads.
And really what this does is it just encourages more growth in this whole communications.
Revolution that we're seeing that's lifting productivity.
And that will help the economy so it's not just all about buying them.
It is about using them to raise productivity.
Okay why do you believe your kind of attack expert but a new line move -- -- wanna get your reaction to this recent survey from the and -- by the basically this is what economists are saying this -- association for business second economist.
But -- percent say that the current US monetary policy is quote about right on an have you -- without it also -- -- the best way to reduce the federal deficit.
Increase taxes and couple that with spending cuts at the Fed shouldn't be doing anything else do you agree with that neighbors -- colleagues.
Yet -- you know what I don't agree with any of that and I'm a part of that and -- survey.
And and and the bottom line is is that what I want to see is no increase in tax rates.
And big spending cuts that the US -- problem today.
Is that we are spending too much we're spending 24%.
Of GDP.
That is a huge.
Burden.
On our economy it's like it's like imagine a race horse that usually carries a 112.
Pound jockey.
Having to carry -- 250.
Pound jockey -- there's no way that -- could win the race or run fast.
We need to put this jockey on -- diet that's what we have to do.
And and raising tax rates on on the horse on the economy.
That accomplishes the wrong thing the way you balance the budget as you cut spending and that will also.
Boost growth in the US economy.
I do wanna ask and answer before really even this is something iconic couldn't believe but it's true we had a Morgan Stanley and the chief US equity strategist at Morgan Stanley say basically we could get -- -- -- war.
By the end of the year possible at all right.
Yeah I.
I personally don't think so you know this goes back to this spending issue again right.
And that is.
The when the government spends a lot and puts a huge jockey on the horse then.
Everybody says why is the horse running slow let's give him some more steroids.
Or you know -- some kind of horse -- And and that's asking for problems back in the 1970s.
In the United States the government spends and regulated too much.
When that when the economy slowed down the Federal Reserve at the time lowered interest rates and tried to juice the economy and what we ended up -- it was inflation.
And slow growth.
The Fed cannot create jobs all it can do is create money and eventually if you create too much money you create inflation and and that will harm the economy in the long run what I sure hope we don't have queue -- for well you.
You can better believe it Bernanke colleges are gonna bring up inflation if it rears its ugly head and in my -- -- and they're they're ready for Brian thank you very much good -- -- always.
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