Getting America back on the job
Economic experts debate what it takes
- Duration 14:50
- Date Sep 9, 2012
Economic experts debate what it takes
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And hello again from Fox News and Washington it.
With a convention results were in the big debates coming next month we want to focus on the one issue that will dominate the campaign all the way to November getting America back to work.
Joining us now are two former chairman of the white house council of economic advisors.
From New York Glenn Hubbard who has now a senior advisor to Mitt Romney.
And from Chicago Austan Goolsbee was an Obama supporter.
Gentlemen let's start with the latest jobs numbers.
The economy added 96000.
Jobs last month the unemployment rate dropped from eight point three to eight point 1%.
But that was because 368000.
People stop looking for work.
The percentage of Americans in the labor force is now 63 point 5% that's the lowest since 1981 of workforce participation.
Was where it was when President Obama took office the unemployment rate would be eleven point 2% mr.
Lot of numbers they all add up to this question why as the jobs pictures -- just.
We have framed it very well and you can add to that that more than a million more people are unemployed in the day the president took office.
There's some structural headwinds to be sure but largely this is a story about growth we have very anemic growth in the US economy we could do better with much better policy.
Fed Chairman Bernanke argued -- two million of the jobs created since the recession were actually created as a result of the Fed's policy so we're very weak policy in the government in.
-- -- Why is job creation so bleak and how can a president say is looking out for the middle class -- as we say.
Workforce participation is of a 31 year Lyle.
Well let's separate two things the first is it as in good months and -- bad months.
All economists say and -- said when he was in the White House and you never want to take one month's report if you look over the last year.
The unemployment rate is down a full percentage point and most of that is from people getting new jobs is not from a reduction in the labor force.
The the Bureau of Labor Statistics keeps track of people who are discouraged workers and the number of discouraged workers actually fell.
So I think the fact that some people are choosing to go to school and that shows up in the data at the end of -- summer.
Is not a big surprise the fact that -- population has been aging and there are people retiring.
But the I I do agree with the gland at the root of the problem is modest growth in the US.
Faster than the rest of the advanced world however.
The entire world economy is in a very tough spot because we're still struggling.
To get out of the worst recession in our lifetimes up and I think putting a focus on broad based growth is better than big tax cuts and count on that.
Well we're good we're gonna get now let's focus and that's the reason we wanted to have you two guys here was to talk about who's got the better plan we heard a lot.
Over the last two weeks at the two conventions -- want to focus.
On the Obama -- and Romney plans to jumpstart the economy and perhaps the biggest difference at this point is taxes here's what the president.
Tax that's what Vanderbilt that's just -- -- -- bad.
-- does to help you lose that a few extra pounds.
This Robert Mitt Romney says your candidate says that he wants to cut all -- tax rates across the board 28%.
For the president says this is -- the same trickle down economics that got us in this mess in the first place.
Basic question why is cutting taxes on the wealthy good and why is raising taxes on the wealthy back.
Well first of all -- governor Romney's proposing is an across the board cut in marginal tax rates for households every household in America by 20%.
And we'll have to broaden the base the paper that.
Also a very deep cut in the corporate rate.
Most economists believe the fundamental tax reform the Romney plan is a variant of that is very powerful for growth.
I can't -- -- an argument.
That says that raising marginal tax rates on high income people many of -- business owners.
Is a recipe for economic growth one can debate fairness arguments but I'm just not aware of any argument that would suggest getting back to the growth we just talked about in the previous question.
It's facilitated by raising taxes not tax reform mr.
goals they EU wide as raising taxes at this point you just said we've got weak growth.
Why would you raise taxes on anybody -- on the wealthy.
-- and President Obama cut taxes for 95% of America he's talking about broad based growth.
I do not believe that having the rates go back to what they were in the ninety's.
Will have any negative impact that is significant on the economy and you can use the money for things that are important light.
Cutting taxes for businesses that hire people rather than cutting taxes on the estates of billionaires.
Or cutting taxes.
For Mitt Romney's horse which -- -- -- a business under their small business Stefan.
-- about mr.
Goolsbee back in 2010.
The president sat.
That he opposed raising taxes on anyone including the wealthy because he said the economy was to wait let's take a look at what he said that.
Potentially you see a lot of folks losing business.
More folks potentially losing jobs that would be a mistake.
When the economy has not fully taken off.
When the president said that mr.
Goolsbee the economy was growing at a rate of 2.3.
Percent and he -- at that point the economy was too fragile to raise taxes on the wealthy.
The economy is now growing at a rate of one point 7% it's even weaker.
So why raise taxes now when it was I drive somebody -- have.
What Chris I disagree with your premise the predominant thing that he was saying there was not that lets not go raise taxes on the wealthy at this moment.
It was team to expand the unemployment benefits to extend the payroll tax cuts to extend off whole series of things -- we can go.
I've held in January just running attack president at neverland and minute wait a minute mr.
Goolsbee it was in January of winning animated deal and you want to let him know you're you're mixing it up.
That was the deal that was made in December 2010 the tape by just flight from view.
Was that the Republican retreat in Baltimore in January of 201011.
When the president said not as part of any negotiation with congress it's too.
Soon and it's the wrong time to raise taxes.
-- in January of 2010 the unemployment rate is is.
Almost two full percentage points higher than it is the -- -- I think that's a very selective.
-- the president's never made any -- economy has been on doing her right now we can't afford to cut I income taxes and that they should -- about the economy is that it -- proposed tax -- -- and it was a 2.3 percent back then.
Chris you you're the you're Collette is trying to suggest that the presidents.
The leading concern for economic growth.
Is that we not raise taxes on high income people the focus of his program is broad based growth.
Tax cuts Ford -- people that hire a hiring tax cut.
Abolishing the estate tax cutting high income people's taxes -- trillions of dollars that that just will not work it didn't work in 2001.
When the same people proposed it and used it.
Well let me let me bring up mr.
Robert you were part of the team in 2001.
-- -- -- little -- well let's be careful first of all governor Romney is talking about tax reform.
Not large tax cuts.
And I guess my question for Austin.
Following yours Chris is why would we believe that four more years of this policy.
Or hiring tax credits or whatever else the president has on the table.
We'll take growth to the next level.
I just don't know if any economic evidence that that's the case.
Each year the administration has forecast that faster growth is around the two year corner and it hasn't happened and it won't until we change course.
-- -- -- Hey -- government forecasts -- -- -- at the end of 2009.
That the unemployment rate at the end of 2012 would be eight point 2%.
So since then -- everyone has seen.
The depth of the recession that we saw at the beginning of 2009.
That we have been plugging along at modest growth.
Because we're coming out of the worst financial crisis.
In our lifetimes that's what happens so as you look at what will work.
Hey going back to a policy that absolutely did not lead to growth and would blow a giant hole when the deficit is not accurate.
We have added more than four and a half million private sector jobs in the last two and a half years now it's got to be faster we've got to add more.
But going to a policy.
Which in the first term of George Bush.
One million fewer jobs -- President Obama has created in his first term.
It makes no sense that's not a policy that's going to get us out of this problem.
He's got to have -- -- is Ira let me bring in mr.
-- and and because this something -- colonel -- in the Democratic Convention mr.
-- which was that no president.
Given that the nature of this particular recession.
Could have turned things around.
By by this point basically four years and it into a term.
What do you think about -- I just don't think it's true we've seen deep recessions in America's past both deep pass the more recent past.
We're recoveries have been much more vigorous even with -- very deep holes in deep financial holes.
We pursued the wrong policies George Bush is not on the ballot Bill Clinton is not on the ballot.
Mitt Romney is on the ballot Barack Obama's on the ballot and Romney is proposing tax reform regulatory reform -- wise budget strategy and trade.
The president has proposed tax increases aren't let's talk let's I wanna move onto another subject and that is that both.
Romney and Obama -- that one of the keys to dealing with the economy.
Is to dealing with this huge and growing debt we -- so let's take a look at their plants the president calls for four trillion dollars in deficit reduction over the next ten years.
But one trillion about -- from the spending cuts he and congress agreed to last August.
Billion is from ending the wars in Iraq and Afghanistan.
Which was money we were never gonna spend anyway and is borrowed.
An 800 billion -- from lower debt payments mr.
I've looked at at the president's plan he has almost nosed tough spending cuts he doesn't shrink the size of government.
And he does nothing serious about structural reform of entitlements.
Look the the premise of that question is.
Unilateral action and that overriding summary the president has put forward is he put forward a budget.
In that it.
Discussion of the budget and in the debate last year of the debt ceiling.
That would get to the four trillion goal that came from Bowles Simpson but you would part with taxes and part was spending cuts now if we have.
They treated Randy Hart and nobody's talking about the president is absolutely an open -- -- that he wanted -- -- these spending cuts that he's put forward that are in his budget plan.
Are largely bogus.
-- you you just added largely bogus and I do not agree with that look we've had major cuts on various parts of the the defense discretionary.
Of ten year freeze the budget windows a ten year window.
The alternative that.
Romney's -- forward is no specifics.
He's proposed specifically.
Five trillion -- tax cuts and you heard mr.
Hubbard saying what mr.
Romney says which is.
I will go find some loopholes to close to pay for that.
But make not make something that I wouldn't let me in -- Ronny let me -- because I wanna go if I cannot if I can because it's a very legitimate point to mr.
-- on that.
And let's look at what Romney's plan as he says he wants to cut 500 billion dollars from the deficit.
By 2016 and balance the budget by 28 wanted to but he -- -- no details.
And in fact he would actually increase defense spending.
By as much as two trillion dollars over the ten years and he would rescind the 716.
Billion dollars in Medicare -- That the president gets over Obama cares so the question.
Robert in this is also true about not -- -- what tax deductions -- -- -- they're gonna close why not level with voters and say how you're -- which -- He's very admirable goals.
Why -- governor Romney has a two part budget plan it very much levels with voters far more so than any candidate in my life time.
The first is to bring government spending down to 20% of GDP but he doesn't -- -- -- -- -- -- there.
-- he's been specific on things like block granting the Medicaid program which is hardly a non bold claim.
On the tax side fundamental tax reform and a healthier economy will produce a revenue share of GDP much -- that range longer term.
It's about entitlements.
And governor Ronnie is set on Social Security.
-- he would raise the retirement age gradually.
He would reduce the rate of growth of benefits for upper income households.
And reduce the rate of growth of benefits for upper income households in Medicare to.
That is a program one can disagree with it but it is a program that leads to lower deficits and debt and higher growth.
I gotta give -- thirty seconds and mr.
Look at objective people that have sat down and look at what Mitt Romney has proposed suggests that it will.
Increase the deficit by trillions of dollars and if they wanted to even cover the income tax cut portion of what he's proposed.
The -- high income people they would have to raise taxes on the middle class quite substantially.
My only point is very simple in 2001.
When George Bush comes into office are right -- he gets the conditions of a recession that he didn't create.
He goes -- we're gonna response I have to in Iraq and and what's worse and -- okay -- that's got we'll leave -- there won't work.
I want to thank you both so much mr.
Hubbard those -- they thanks for coming in today well have you back.
And gonna stay on top of this debate over how to get Americans working and thanks again both of --