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Rebound or recession: What lies ahead for US economy?

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    Former Reagan economist Art Laffer weighs in

  • Duration 3:43
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Well the White House says the economy is beginning to heal as the door of the Dow -- past the 141000 mark for the first time since 2007.

157000.

Jobs were added in January construction spending is climbing in housing market shows signs of recovery but.

Unemployment is up and Washington still hasn't passed a budget or cut spending.

It's a mixed -- of news our next guest believes it all adds up to a catastrophe for American doctor art -- economist and author joins us now.

For Nash still doctor -- thanks so much for your time today.

But -- You -- by the way the other story I have a son in law who is a former sniper and it's really very touching awful story.

It is in and our sympathies go out to the two families there that are involve a loved -- with both of those victims in that case.

I'm turning to the economy you're an expert -- -- -- and we have had some positive signs so why do you think we're headed in the wrong direction.

-- we just are growing fast enough Shannon to bring that unemployment rate down to get rid of the huge amount of unemployment and people who have left the labor force who are so discourage you know the longer this time lapses.

That these people -- there it's not just a number these are real people.

Who lose their pride their self esteem who lose their job skills -- lose all the chance of becoming productive Americans and especially the very very young.

The teenagers the inner city dwellers -- it if it's a long term.

Disability that they're creating here and we must grow a heck of a lot faster to bring this problem back under control.

And it's just not happening none of the data coming out.

Really indicate rapid resurgence in economic growth and that's what we need.

Well and you talk about growth we know that the growth the GDP for the last quarter of 2012 is not good it was actually in negative territory was not what exactly will.

When we say GDP to average person out there what does that mean and why should they be concerned.

And the GDP numbers -- that's total gross product of the United States.

-- when it declines it means that were our country's shrinking even though our population is expanding.

Which means that the income per capita up our citizens is declining.

And and when you compare this period -- let's say when when Reagan was president.

In 1983 and 1984.

Growth rates were in the range of seven and a half percent on average for the first.

First four quarters of 83.

And then about five and a half percent for the four quarters of 1984.

It extended on up through Bill Clinton I mean it was an enormous period an era of prosperity and we're just not doing that now we're gonna lose a lot because.

You know these people are precious natural resource that can't be recouped you can't get back a year of unemployment for a person it's just a tragic.

Loss of a perishable asset.

And that downward native growth meaning not growth in the fourth quarter a lot of folks say that that had to do with events yet with defense spending.

Being down we know that sequestration is looming that is going to -- and spending like it or not if it's not resolved.

What's your take on -- sequestration is going to impact our economy.

Well I need sequestration is also -- I mean already -- -- that decline in the fourth quarter but.

Even without sequestration you still have very slow growth.

I mean you have a lot of people -- come in that night in the 2012.

Out of 2013 which tended to offset the sequestration but.

You've got a serious long term problem and I hope they don't go through with sequestration I hope they don't do it I -- but an agreement comes on.

I'm not very hopeful frankly but I hope it does happen.

What we hope their blessing to you doctor art Laffer sir thank you very much.

It's my pleasure Shannon thank you.

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