You're watching...
Jeffrey Miron, Harvard economist, weighs in on Moody’s downgrading France’s credit rating, plus his take on the fiscal cliff.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
It goes on to say half of the nation's forty biggest publicly traded companies.
Aren't planning to spend this year or next for more on what this could mean I'm joined by Harvard economist Jeffrey Miron.
-- love -- back to the show good to see you.
I -- to dinner tonight with some breaking news that we had.
Moody's just announced that they are cutting France's government rating.
To double -- from AAA maintaining a negative outlook there of these second rating agency did you that.
S&P did it back in January.
And of course we mentioned last week that by the eurozone is in recession some seventeen countries.
With economies there are contracting not expanding.
Jeff do you.
Isn't this a warning post for people in this country who can't seem to get our spending under control.
I think it should be a warning posted entire European situation should be a wake up call.
Quiet even in Europe they're not recognize in the wake up call they're not doing the things that they could and should be doing to avoid turning into the extreme cases like Greece.
Spain Portugal etc.
so it's not so surprising we're not doing -- -- people just don't seem to want to hear the bad news -- costs.
And and it's -- that we have to cut the spending -- they -- -- to -- -- bad news and and today the Wall Street -- -- -- on -- front page.
Here's what they say overall spending by US companies down one point 3%.
Capital spending down four point 4% equipment and software spending flat.
That was as announced in the third quarter of 2012.
The business roundtable saying that sentiment.
Sentiment is the worst in three years.
Among CEO it's.
This is got to be concerning without pull back this dramatic.
By the companies that could expand hiring.
Improve the over to all tone of the general economy by.
Getting more people on the higher.
-- How it certainly concerning its very worries some and it's certainly related to the fiscal class.
But it's really hard to see how.
Two sides in Washington are there are going to agree to anything sensible.
Because they just have such fundamentally different views of what government should be doing the Democrats in in rough terms.
They want the government to re distribute income they wanna take from people who have very high incomes and give to other people.
And the Republicans.
They're not perfect by any means but there -- at least are trying to draw attention to the huge pace of entitlement spending and pointing out that that's not sustainable and we've got to do something about.
You know it's also -- -- exports are down you know we have China and trouble Europe in trouble.
Can the US economy stick is sustain the planet.
I don't know US certainly can't sustain a planet at what how -- the rest of the world that we were doing -- -- -- plus that the rest the world we're doing better.
But two of the three major players at least pay by the US -- -- and -- Europe.
-- making all the wrong decisions about expenditure and debt China doesn't seem -- obviously going over the cliff yet they don't have the same out of entitlement spending baked in the cake.
But they're doing all sorts of crazy things in -- -- so it's really hard to see where any growth is gonna come from where anybody's gonna lead.
The world into a better economic situation because nobody is making the right decisions.
-- at and yet the Dow was up 207 points today.
On the idea that there might be a deal in the making we're starting to hear whispers that something could be happening moving forward.
-- wanna know will the markets grade the quality of any deal.
-- the markets go up on a fundamentally improved situation -- go down on just kicking the can down the -- I think the markets will -- -- this -- just aghast will go up as long as something reasonable is Don the deals with the very short to medium product they'll be relieved that at least we kick the can down a year to.
But I would be shocked if -- really read anything that addresses the long run the thing that's gonna eventually turn as -- degrees.
Which the entitlement spending there's just not the well across enough park you know politicians to do something about that.
I think it said that there reasonable -- out that's what we're waiting for what we don't know we're gonna get help Jeff -- thanks for coming out so it's a pleasure to see you.
My pleasure thank you.
