dr. blinder. >> well, chairman conrad, ranking member sessions, members of the committee, i'd like to take the opportunity to share my comments on the budget with you today. i think even if this very fractious, the recovery from the recession has been far too weak. we are getting new g.d.p. numbers tomorrow but the ones we have now show a compound annual growth rate since the recession ended of only 2.4%. that's a rate we'd be satisfied with if we started with 5% unemployment. it's a rate that is totally unsatisfactory. starting from 10% unemployment and the growth rate over the last three quarters has only been about half that. some reservers view this macroeconomic performance as unsurprising and maybe inevitable given the financial crisis that brought about the recession. you more than alluded to. you mentioned carmen reinhart and vincent reinhart, showing it takes a very long time for economies to recover from banking and financial crises. what was pointed out in a very nice paper recently by

and that's our show it was really great having dr blinder on because we had an opportunity to talk to someone who actually works the fed and he may have different views but it's always good to have someone with different views the come on and try to have a friendly bit about it so thanks for tuning in and feel free to follow me as always on twitter at covering delta and lauren lyster more a lister and you can give us feedback on our show at youtube dot com slash capital account nice comments and constructive criticism this is appreciated either but you can find us and from everyone here at capital cow have a good night. headlines arm syrian opposition fighters tighten their control the damascus just fifteen minutes from the center says the u.n. closed all talks on a resolution which backs out of the call to get president assad to go. crowds gather outside the post presidential palaces people take their i get to the top of the online and see piracy which threatens regular incident users i'm living as new meters face accusations of torture is doctors without borders pull out of a key ci

and that's our show was really great having dr blinder on because we had an opportunity to talk to someone who actually works the fed and we may have different views but it's always good to have someone with different views the come on and try to have a friendly bit about it so thanks for tuning in and feel free to follow me as always on twitter at covering delta and lauren lyster adds more a lister and you can give us feedback on our show at youtube dot com slash capital account nice comments and the start of krishna's is appreciated either but you can find us and from everyone here at capital count have a good night. march in poland the government wanted signs are down by rappers opposed to war assaults signing up to an international anti-piracy agreement the pact was negotiated in secret and covers a broad swathe of copyright material from pharmaceuticals the film. iran considers cutting its oil supply to europe before the european union sanctions come into full force in july the move comes as an attempt to head off the trade ban imposed earlier by some european nations to curb this nuc

and that's our show it was really great having dr blinder on because we had an opportunity to talk to someone who actually works the fed and we may have different views but it's always good to have someone with different as the come on and try to put out a friendly bit about it so thanks for tuning in and feel free to follow me i was always on twitter at covering delta and lauren lyster at lauren lyster and you can give us feedback on our show on you tube dot com slash capital account nice comments and criticism this is appreciated by the media to feed us and from everyone here at capital account have a good night. you know how sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realized everything you thought you knew you don't know i'm tom harpur welcome to the big picture. down the official. called touch from the top story. video on demand. and. now in the palm of your. question. we'll look at. sunny's technology innovation hall believes developments from around russia we've gone to the

dr. blinder. if we only achieved 2.5% growth, at $5 trillion.or every 1% decrease in economic growth, at $3 trillion. these are the risks -- this is the level of uncertainty causing job creators not to act, not to invest. dr. brennan -- dr. brannon. >> the biggest problem we have with health care has not been dealt with by the affordable care act. the rising entitlement costs. i think that is what really threatens government solvency. there's no denying that lots of small businesses in oshkosh and elsewhere are worried about the entrance to figure out what these costs will do. i do not think any of them really believe their health-care costs are going to go down all that much, but the fact that you look at the balance sheet of the united states, we might have had $1 trillion deficit last year, but the amount of unfunded liabilities went up by $3 trillion last year alone. i think that is what frightens financial markets, and i think that is really where the federal government has to think first in terms of their priorities. you are right, there a

dr. blinder. if we only achieved 2.5% growth, at $5 trillion. the cbo estimates for every 1% decrease in economic growth, at $3 trillion. these are the risks -- this is the level of uncertainty causing job creators not to act, not to invest. dr. brannon. >> the biggest problem we have with health care has not been dealt with by the affordable care act. the rising entitlement costs. i think that is what really threatens government solvency. there's no denying that lots of small businesses in oshkosh and elsewhere are worried about the entrance to figure out what these costs will do. i do not think any of them really believe their health- care costs are going to go down all that much, but the fact that you look at the balance sheet of the united states, we might have had $1 trillion deficit last year, but the amount of unfunded liabilities went up by $3 trillion last year alone. i think that is what frightens financial markets, and i think that is really where the federal government has to think first in terms of their priorities. you are right, t

dr. blinder's estimate of the number of jobs we would have had without the federal response. 8 million fewer jobs in the second quarter of 2010 if we had not had the federal response. i understand dr. blinder will present estimates for the number of jobs saved in 2011 as well, which i look forward to hearing. although the recovery has recently shown signs of strengthening, it has been a long and difficult road back. recovery tend to be shallower and take much lower. here is what two leading economists found in their research. "real per-capita gdp growth rates are significantly lower during the decades following a severe financial crisis. in the 10-year window following severe financial crisis, and agglomerates are significantly higher than in the decade that preceded the crisis. the decade of relative prosperity prior to the fall was importantly field by expansion in credit and rising leverage that spans about 10 years. it is followed by a lengthy period of retrenchment that most often only begins after the crisis and last almost as long as the credit surge." in other words,

formal former federal reserve vice chairman and professor of economics at princeton university dr alan blinder about the federal reserve system and what he thinks the role of the central bank should begin setting interest rates i start the question by playing a short clip of him speaking at the woodrow wilson astute about just that the end of the criticisms of the greenspan said it was after they lowered the knobbly interest rate to one percent creating a strongly negative real interest rate in two thousand and three they held that there too long that's probably right i consider it a forgivable or a but it's probably. so the point i wanted to make with that is i i agree with you i think was probably the wrong idea to have a rate that low but isn't that really a problem the fact that neither i nor you nor anyone really knows what the interest rate should be and i say that because we have we have that it with prices and talking a lot about that it's a huge problem i mean. it would be a better world if the people at the federal reserve had perfect foresight and had a perfect model of how the econ

dr. blinder? >> i alluded to that a little bit in the testimony. i think the best guess -- and that is the right word here -- that they will -- if they continue to kick the can down the road, they have been remarkably successful at that. this has been going on in an acute phase since the spring of 2010. they keep kicking the can down the road, doing just enough to get by. i think that is the best guess for 2012. the downside risks of what you are talking about are enormous. if there is a financial equivalent to lehman brothers that starts in europe, i think that is a recipe for a worldwide recession starting in europe, but not staying in europe. and as i suggested in that testimony, the potential to knock down u.s. gdp growth, which might otherwise be 2.5% -- let me not even to a forecast. to knock down gdp growth by two percentage points from what it would have been otherwise in a worst-case scenario. >> i agree with everything allen said. i am hopeful that the ecb's decision to lend money to banks in the eurozone so they can either acquire some o

dr. blinder's estimate of the number of jobs we would have had without the federal response.had the federal response. i understand dr. blinder will present estimates for the number of jobs saved in 2011 as well, which i look forward to hearing. although the recovery has recently shown signs of strengthening, it has been a long and difficult road back. recovery tend to be shallower and take much lower. here is what two leading economists found in their research. "real per-capita gdp growth rates are significantly lower during the decades following a severe financial crisis. in the 10-year window following severe financial crisis, and agglomerates are significantly higher than in the decade that preceded the crisis. the decade of relative prosperity prior to the fall was importantly field by expansion in credit and rising leverage that spans about 10 years. it is followed by a lengthy period of retrenchment that most often only begins after the crisis and last almost as long as the credit surge." in other words, we should expect to see more than normal growth and relatively hig