CBO warning sparks new fears about economy
Dire warning from Washington watchdog
- Duration 7:15
- Date May 26, 2012
Dire warning from Washington watchdog
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-- -- -- -- Washington's money watchdog warning that's -- our economy is going in seven months can't lawmakers don't go to work.
To prevent massive tax hikes and automatic spending cuts kicking in January 1.
If you -- nothing the Congressional Budget Office says a recession is guaranteed.
Is that right.
Hi everyone I'm Brenda -- that's is Bulls and Bears last year cry hey do it Bulls and Bears this week we've got -- B Smith Tobin Smith Jonas Max Ferris.
Along with Ed you taos ski and Steve Murphy welcome to everybody OK -- isn't the CBO right are we headed for another recession.
Without question a matter of fact I know is that not only are they right I think they're little late to it.
I don't think there's anything they can do right now to basically keep us from going troops -- recession I actually think were already in one right now.
And I am -- but Steve if it did the threat of the debt and the deficit just as dangerous.
I think it's more dangerous than the threat of going back into recession I think the long term threat posed by that deficit and the debt.
It it it's it's bordering on a national crisis.
I'm not I'm not fearful of this so called train wreck happening.
I think we need big spending cuts I think -- we we're gonna have to have tax increases I don't think congress is gonna come to any kind of agreement.
It in it in the absence of an agreement.
That has big cuts and tax increases -- it I'm fine with this going into effect the way it is now.
Don't think what tubby what's that got to do to our economy what's that gonna do add.
Just to America open us up this is a CBOE.
Making an estimate so they say it's gonna be seven months we probably started three months ago.
A -- -- track record at an incident where at certain that's the -- overturned point here where.
Where because of slowing because of just sort of lack of alone.
When you do this double whammy of sort attacks Armageddon.
And all of a sudden have you know six or 800 billion dollars sucked out of it than fifteen trillion dollar economy that that we don't have the of the game -- -- don't have the bandwidth and we will be in a recession no question.
And and it was a CEO of course the congressional budget office of the options are sorry that that's okay I'm Jonas argue worried now.
That these tax these that tax -- were talking about.
We're meant to be temporary they -- It was President Bush to who brought the man but now they've essentially kind of didn't bottom as permanent temporary permanent.
You know -- there I would have no fear of any temporary tax cut going away when we're not already recession which we are not now and I doubt will be in by next year.
Now there are some.
Problems with the gridlock there are a game -- -- more listening we would have to fix that's been being fixed for twenty years as an alternative minimum -- acts that hit that now -- ideally we would never.
These taxes totally get hosed all at once on everybody but I -- the spending cuts are very minimal and there and they're not that we -- many things I'm not fearful of that.
I -- more peripheral that -- being scared of this day happening and it all coming to -- and I think America can -- it's the first step towards a balanced budget.
I'd like it to be spread out over a couple years the tax increases not just all of a sudden a -- one boom there's always attack always talks notably new blood.
I think -- make -- do it on the -- recession with the CBO he's -- -- hundred billion dollar in Iraq and pink hats but but that's spread out -- years so that's what you're saying is that that that it's not such a big -- to -- fifty billion in spending -- it one year we're running deficits that are so much bigger than that -- it's not that you do a restraint to -- -- -- -- instantly going to recession on this tax increases of more substantial -- again I don't -- they empty.
But I think the price sixty MD before that -- this is the -- we've come to actually get on the right path of this country so why not now we're on in a recession.
Okay Gary -- I want to thank you for last because I know you have some very specific.
Viewpoints on on both of these issues.
Yes as usual on such a moderate.
After I don't I am how I understand one half of the CB is argument look the and attacks -- -- -- as it's our virtual would result in a 3800 dollar increase.
For every person that taxpayer in the in the US that would be horrific what I don't understand kind of join -- alluded to.
Is this side decrease in the spending it's it's a hundred billion dollars as you mentioned.
It's spread out over a number of years.
Why the CBO think that's gonna have a dramatic effect on the economy is baffling to me.
We just spent seven times that with the stimulus and it didn't budge the needle in a -- Good direction so this this I'm not a money I.
I would like to actually see the tax -- stake.
Yeah spending Bill White LB -- that would have smaller government why should the government be spending that's the hundred billion dollar what we can keep and our own dog and I don't know I don't know -- and when -- But you know none of this and we've posted the same politicians you've -- can't doubt you know eight miles got a two mile road so now we're at a point where their credit you don't know what's gonna go right down the white its gonna do the same BS we've seen at a time and -- We're going to be all right your hands and that all my guys maybe all tell you what let's just a for a -- two years now how well it got bad habits.
I don't think that they're gonna cut another deal I don't think another deal as possible I want Obama to -- Washington.
Not gonna have not going to happen.
I'm like hi -- that's I don't Frisco state dinner -- right there are okay go on -- you're on highway one of the I had.
-- -- you know this is shocking is that the CBO normally doesn't know -- we're actually can't have come out of a recession when we have come out and they're usually about seven months behind on any economic data so when I say that -- in a recession right now until telling -- we are in a recession we're going deeper into recession and see something you have said is that you're okay with the tax -- that is exactly the wrong medicine that we need right now we need to reduce the blanket the wet blanket on the economy and let the state cut the spending and let the economy -- -- raising taxes right now and going along this tax Armageddon is exactly the -- that we -- right.
-- -- do you raise taxes when we have so many unemployed people when.
At who have been unemployed for.
You know what I think if you.
Lord -- today he wouldn't be a keynesian because we've spent.
We've spent way too much money we never went into surplus we never balanced the budget in the good years.
We don't have the bandwidth any longer to continue this deficit of funding I'm sorry Paul Krugman is dead wrong on this these -- -- have.
Have a depression not nostalgia are wrong.
Well -- of course is the economist says if you if you spend.
If governments and have not it'll eventually bad way out of -- and get togethers and others -- -- having just been forever somehow hold up.
Let me ask is are these guys that bar that's not what I propose -- these guys are like bio wired to spend spent equals votes votes equals you know more money so.
It it what we're gonna see I have -- obviously first up it's gonna be a big -- to prop.
That we're gonna have the fact that added to separate 28 we're going to be sitting here saying see I told you -- run that tape from -- more of that opinion matter who -- I want in on our desktop.