Looking at Obama's 'virtual' economy
What is real economic situation?
- Duration 4:50
- Date Feb 24, 2012
What is real economic situation?
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What do you do when you don't like some of the key cornerstones of the economy and millions unemployed a low growth rate in -- housing market.
You -- at least according to our next -- he says the president has constructed a virtual economy he says welcome to the sin city economies name is Danielle.
And -- -- a deputy editor.
Editorial page editor of the Wall Street you're on its -- ME ST people talking on TV about a virtual reality but will try to contract it Daniel I sent you back with -- How did you come up with this idea the sin city economy what do you mean by it.
Well I came up there watching the state of the union when the president started discussing something he was calling an economy built -- last and what he was talking about was not as you just suggested the fact we've had.
About thirteen million unemployed people for three years in a growth rate offering around 2%.
Suddenly occurred to me that the president was changing the subject and talking about an economy that doesn't exist one that's kind of out in the future like a science fiction story.
Or a video game and years ago -- -- -- a wonderful game called SimCity which allowed people to create their own city and create their own reality.
So -- -- the president doing things like for instance in the state of the union he suggested that we would happen to wish -- rates for colleges.
The colleges and universities have no idea what he's talking about are you gonna -- tuition rates for colleges and universities.
You give a speech in which he said he would revive the ought to look.
Economy in Detroit the auto companies General Motors he said and we can do the same thing for Cleveland and Pittsburgh and -- had to ask yourself.
Cleveland and Pittsburgh what is he talking about.
Cleveland and Pittsburgh to -- extent -- replied has been the result of activity in the real economy as the result of the shale gas hydraulic fracking industry which is actually.
Got a French company building a new steel plant near Youngstown 650 million dollar plant or 400 workers down there Western Pennsylvania is booming.
This is entirely based on private sector -- -- nor is taking involved advantage of this new technology.
Not the sorts of ideas that the president's proposing and an economy built the last.
-- and the question then becomes -- it's it it.
Who has a hand on a reality we've spent the last couple years and you guys have done this in the Wall Street Journal as well as talking about what's normal -- should -- -- expecting for their real American economy and and you really defines that so.
Could you think has a handle on what's really happening in the economy right now.
We'll leave it the problem is we do know what's going on the economy not all that much I mean some of the data has blue -- up recently.
But normally coming out of a recession you would expect a higher growth rates than we have -- we're talking about perhaps by consensus a growth rate this year of about two and a half percent that's not gonna get the unemployment rate much down below 8% we -- need much stronger growth.
Then we have right now and the question is what can government do to incentivize people to work harder.
And that brings up the issue of tax policy the president.
Again in as an economy built -- last he's talking about the Buffett rule imposing a 30% tax on millionaires.
Nobody believes the Buffett rule it's ever gonna come into existence.
This week he talked about reducing the corporate rate to 28% at the same time that he's proposing.
Raising rates on other companies and most of the coverage of that proposal said there were very very few specifics.
You know it's interesting that a look at the GOP plans -- -- you look at the candidates and this is according to US budget watch a bipartisan committee for responsible federal budget was.
Was put together this this plan to look at the four major Republican candidates for president and they found -- -- -- plans.
That and those tax policies -- the national debt would balloon under those plans except except for the plan that Ron Paul for its -- or get it inspects the question of is anybody right now really have a handle on what plan was to put in place to make sure that we grow the economy but don't grow the debt too much.
Well you know it's the -- assault wagging the dog whenever we talk about tax proposals of the sort Mitt Romney is so announcing today.
The idea -- always we can't have caught tax rates unless it if if it does damage to the budget ports of the debt.
And somehow that.
Issue that always gets left behind in those conversations is what effect might these proposals have.
On economic growth I don't think economic growth should always remain a hostage to Washington's need to spend money.
And to the extent that.
Romney and -- Are lowering rates -- -- going -- the corporate rate they're freeing up capital to be deployed.
Towards its best uses and I think they at least -- got the right subject on the table.
All right we'll continue to watch it Daniel we appreciate your editorials thanks for coming in and -- content.
My about it we appreciate thank you.