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Sure did pack a punch listen to this asked to -- Economic losses from -- -- -- could reach twenty billion dollars some experts are saying.
That it could be even more so here's the question if you look at the jobs -- be created the money that will be spent.
As a boost for the economy Jeff Cleveland -- senior economist with Peyton -- -- Lance Roberts is the CEO and chief economist at street advisors and he disagrees thank you both for being here I'm Jeff I start with -- because.
I you know I do think that you get an economic boom from all this for example I mean last -- the storm was coming in.
I went into -- all over the New York area trying to get flashlights battery water they shelves were picked clean people were fighting -- -- And they were buying things that they wouldn't normally -- how is that not a boost to the economy.
You know -- I think it comes down to focusing on what is seen all the -- is that people make.
What is not seen and in this case it would be what you would have spent that money on.
Otherwise and -- I think a lot of analysts that put forth a spending figure for the impact of the storm ignore the the counter factual -- what they would have spent that money.
On if they didn't have to go down of the store and gobble up all the batteries off the shelves that's that's the real problem here.
I don't -- do you agree with I mean if I had -- in the -- buying batteries that would have been at the park playing with my kids I mean we still eight.
You know did all the other things that we would have -- -- -- I just also had to stock up for the store.
Well yeah and the other -- -- is we're talking about a short term impact and a long term issue.
On the short term this is going to be about a twenty billion dollar went back looked at previous hurricanes of this size they average about twenty billion dollars in damage.
So we're gonna see that hit the economy in the short term.
In terms of people restocking rebuilding restructuring their homes -- furnishing you know their houses where they lost their furniture.
I'm buying the food that they need to replace the refrigerators that they lost so.
Yes we're gonna get a short term impact to the economy of about half a percent.
Through the end of the year as people just restructure from this the Jeffrey's right.
In the long term we're rebuilding what we already built so the long term of this is that we are borrowing money from the future so this is.
Is going to show up down the road.
And hit the economy again from -- a lack of growth side.
But generally plays both ways and isn't our multiplier effect if -- -- you spend money in the short term you put people to work they go out and spend money.
I mean the government is great it's spreading money it doesn't have a good does that once again now this could be like a shovel ready jobs that never materialized -- the problem with that program.
Was that it didn't happen I mean they never put that money to work they just distributed to the states and it sort of disappeared into the couch cushions.
You know government Manson's around the country this is like real.
We -- -- really gonna go I'm -- stuff.
Right I think this is a subset.
Of that other problem that relates is is really important economic -- -- it to -- and I -- all the way I think -- it Melissa you say hey how are really reboots or spark.
Economic growth gonna come over your house Geoffrey -- a break the window.
And now you have to it you know replace that window so suddenly the window maker has a job and he can spend that money on down the road but with that is I don't want to spend money.
To replace the window I want to -- -- suits.
And so -- -- maker is now out of cash yeah so yeah a ripple effects but you're just redirecting them Iraq.
You can really really badly -- -- the claim that way now I mean I still went out bought as soon as my insurance company paid for that window so that's -- -- The way it is and you know -- you spoke about deficit spending a moment ago and look -- the problems that we have in this country right now want the reasons why we can't get economic growth going more than about 2%.
Is because of the deficit that were running deficits have a negative impact on the economy.
So long term.
That isn't a good measure and again if if it was a good idea to go around and and basically destroying property to create economic growth while just go blow up a few cities.
And we can have a lot of economic growth.
It that the real issue is is that we need productive commerce over time not replacement commerce.
But long term now we're we're come out White House -- -- -- -- from -- how -- we -- -- we -- productive commerce in the short term we're gonna get about a half -- percent -- to GDP.
Long term it's a different issue.
Jeff what do you think is Steve short or long term way that we get the economy rolling yet if it's not a big storm like sandy.
I think really -- prosperity come from not from destructing things and and -- them back up.
-- comes from getting together getting good ideas and figure how to do things more productively so it's it's gonna come on the investment side of the economy Melissa that's really what we've been watching.
I investment activity from businesses -- suffered so you know last year for years but that's what I look to come back for a longer term growth -- you need investment in order to have cross hairs.
I'm Jeff you don't think that companies are out there are gonna look at everything that's happened in this storm and invent new flood walls and invent new ways to generate power when the power goes out your house and invent new flashlights for me to go -- -- -- -- some innovations.
That come as a result of the destruction we've seen -- Although by those things in that would be -- This of the economy no.
That's what's good about you know human ingenuity we find ways we adapt so we overcome obstacles -- no doubt that.
That'll happen but most of happen anyway.
You know we -- we would have found other ways that the -- -- time and energy and coming up with -- with new great wonderful things -- to share with the world.
And instead we're gonna have the -- things back now.
When I wouldn't care about a generator reported this anyway you guys are a lot of projects coming on I appreciate -- -- --
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