dr. hassett? >> and present values, maybe we can estimate all the things that we are short, something like 100 trillion. if businesses expect to have to pay their normal share of tax increases to cover that $100 billion? the we're talking a tax liability bigger than $10 trillion. that is closing in on the market cap for the u.s. firms. so the scale of the tax shortfall is humongous. it is really a larger relative to the scale of u.s. corporations. maybe they do not think it will record a cut the whole thing with tax increases, but if they think that even half would be covered with that, and that is a significant liability, implicit liability on their books. you could set of investment booms today. so the scale of the problem is such that there is and expectation of fact they could be large if it were credible, accompanied by new rules that made people believe that the spending rules are there to stay. >> which often appeared that people look to the clinton years as the golden years of the economy.

dr. hassett, welcome. in our fourth panelist today, chad stone, is a chief economist at center and budget priorities where he specializes in the economic analysis of budget and policy issues. dr. stone was the acting executive director of the joint economic committee here in exetch and before that staff director and chief economist for the democratic staff of the committee from 2002 to 2006. he held the position of the chief economist sfor for the senate budget committee in 2001 and 2002, previously he served the president's council as senior economist and chief economist from 1996 to 2001. his other congressional experience includes serving as chief economist to the house science committee. dr. stone has also worked the federal trade commission, the federal communications commission in the office of management and budget. he's been a senior researcher at the urban institute, dr. stone co-authorized a book titled "economic policy in the reagan years." he earned his ph.d. in economics at yale university. dr.

dr. kevin hassett, and dr. stone. i no there are others who will be asking questions and making statements. i will be brief. i wanted to first of all make the following assertion. i don't think there is any disagreement on this committee and throughout most of the country about the need to reduce the deficit and have a strategy to do that. i think it is if shared in a bipartisan manner, and we are all of one minds to do that. the questions that we are trying to resolve year is about the timing of that and what policies yield the best results. on these questions i think there is honest disagreement but also significant disagreement. we are having a robust debate about it as we speak and throughout the next couple of weeks and months. today's hearing is part of that debate and is important we have this debate at this time. we have a lot of able economists across the country and several here today who offer their perspective. i want to provide a little bit of context in terms of the way i see this in terms of some of the

dr. hassett, separate questions.ou talked about a game changer to restore credibility in our financial order. but weir often -- but we're oftentimes told we can't do that, that introducing a fiscal consolidation program would mimic that of the great depression, where spending reductions, they claim, created the recession of 1937 and 1938, and they use that analogy to apply to today. what is your aacceptsment of that technology, and is it important for us to engage in a serious fiscal consolidation program now in order to spur the economy? >> i think it's essential to engage in a consolidation program now, and it will spur the economy since this recovery began, and it's hardly a recovery, growth has been only 2.8%, so the low growth is consistent with this pattern for the last two years since the recovery began. and then as i said before, if you compare that with the last time we had a big recession, the growth is less than half as much, 7% at that point. i think the low growth we have now is because of all this fisca