ken rogoff knows a lot more about this than i do. i'm not going to pretend to do much different here. ken, you said the same thing about debt. and you have said the mortgage market, housing market is at the core of that and we have to look at writedown, principal writedown, debt relief. here's my question -- if you do that, aren't you rewarding like a decade's worth of bad behavior? isn't it essentially saying the idiots won? >> well, you have to do it in a way where there's some giveback. so if you write down people's mortgage, you have to design a program where there's some penalty for it. but you're absolutely right that there's so much debt out there. consumer debt has doubled what it was 30 years ago. this is not a typical recovery because of the debt. that's what's making it slower, not the government -- >> will, here's my problem. you keep saying rewarding those people who made some mistakes. here's the problem with that. the people who did mistakes, guess what? our home prices have fallen as a result of this situation. second

we should have appreciated more what ken rogoff wrote. if you think you have a be shipped -- v-shared recovery, it will not be. >> businesses are sitting on piles of cash that it will not invest because of a foreclosure crisis, why? >> the first effects some investors in some markets. my guess is a little bit less than the second or third. companies are sitting on cash. one of the greatest tough issues that are being debated is whether you ought to give them a tax holiday to bring back that and come. the housing crisis affects confidence. so many houses are under water and there is no prospect of feeling better. >> how troubling are these numbers for barack obama as we head into the election? >> if you -- republicans could coalesce around a formidable candidate, barack obama would be in deep trouble. these numbers are bad for an incumbent. we asked if things do not get better, will it make it difficult to vote for barack obama and 60% said yes and 60% said it will be difficult to vote for republicans. >> a chinese dissident has been relea

from boston ken rogoff of lar vard university, previous chief economist at the imf. i am pleased to have all of them here. i will start with paul krugman. what's happening to the ecomic recovery? >> there really has never been much of an economic recovery. when all is said and done i like to look just-- what are the fraction of adults who are employed that fell off a cliff between 2007 and 2009. and it has really not recovered at all it is bouncing along. so basically we' in a holding pattern. in an economies that's growing but job growth is no faster than population growth. >> rose: does job growth have anything to do with increased prottivity. people are still doing more with less in terms of workers. >> that always happens. what ihappening now, it i not that there isn't work for these workers to do. it isn't that there isn't spending power. people aret spending enough to employ the people that we have. it is something that isn't exactly a recession but isn't a recovery in any real sense. >> rose: so the mistake was not to have a bigger estimate plus-- stimulus pac

the other side of the table, harvard university's ken rogoff. welcome, gentlemen. jeff, when you look at these job numbers, if you do the math, we're creating about 250,000 jobs a quarter. that barely takes into account the new entrance to the labor market. i did a back of the envelope calculation, it will be 12 years before we get to 7% unemployment. >> of course, there is a lot of uncertainty right now but i think what is clear is the economy is dragging, unemployment is high and likely to remain so for the foreseeable future. of course, the headline unemployment number hides a lot of suffering of people that have withdrawn from the labor market or working only short hours because they have to. so, this economy is still sick. it is not showing dynamism and we have serious problems ahead. >> what do you do with this problem of unemployment? if the unemployment numbers don't go down, even the budget projections are all off, they assume -- the president's budget presu assumes we'll create jobs. if you put today's unemployment rate in those budget projections, the de

"i come down on this as ken rogoff and carmen reinhart do in their analysis of post-crisis economists. this is the way it is. when you have such a massive buildup of debt-free crisis, when you harms the consumers the way we did in this crierksz the economy is going to sputter." so america's debt stands now at 95% of g.d.p. it is set to exceed the entire economy by the end of this year and the president's own treasury secretary and widely respected economists are saying this could have a negative impact on the economy and jobs. it could cause a 1% decrease in economic growth, according to rogoff and reinhart. according to the council of economic advisors, a 1% decrease in growth could cost about 1 million jobs. not 54,000. 1 million. so if we had less debt, instead of an anemic 1.8% growth the first quurkts as we come out of this recession, we should be seeing more than that, we would have probably had 2.8% growth, if this sthiewd mr. geithner considers to be excellent is accurate. certainly debt pulls down economic growth. common sense tells us so. so numerous experts agree that this

up next, economist ken ej rogoff of harvard university. help ! gas™ or brake ? take it from me-- with hertz, you'll always find your way. hertz-- at the airport, in your neighborhood or at hertz.com. aflac! oh, i've just got major medical... major medical. ...but it helps pay the doctors. pays the doctors, boyyy! [ quack ] oh yeah? what about your family? ♪ we added aflac, so we get cash! it's like our safety net... ♪ to help with the mortgage or whatever we need! so my family doesn't feel the pain too. ha! [ male announcer ] help protect your family at aflac.com. [ pigeons ] heyyy! hooo!!! ♪ >>> that is boston. cloudy, 56, showers, 59 later today. for many of you at home during the recession, you learned how to spend less and pay off your bills. the same can't be said for washington. the government reached its debt limit. last week, jeff sessions of the house budget committee used the work of our next guest against raising the debt ceiling without deep cuts in federal spending. >> we cannot continue to borrow and spend and this is threate

at the university of maryland -- no longer there, but she was at university of maryland -- and ken rogoff. "we examine the experiences of 44 countries spanning up to two centuries of data on central government debt, inflation, and growth. our main findings is that across both advanced countries and emerging markets, high deb debt/g.d.p. levels (90 where) are associated with notably lower growth outcomes" for the future. so this isn't just about numbers on a page. this is about the future economic prospects of our nation. a failure to act will consign us to a more limited future. fewer jobs, less economic growth, less economic activity, a weaker position for the united states in the world. that's where we are headed, and we have been warned repeatedly. here's the s&p, the major rating agency, "signals top credit rate something in danger, stoking political battle on deficit." "u.s. warned on debt load." so, mr. president, nobody in this chamber, nobody across the capitol in the house of representatives can claim they didn't know what was coming. we have been warned, and we have been warned

economists like ken rogoff and carmen reinhart warned us. how can government respond. for a start, we have to avoid that now well trodden path from a banking crisis to sovereign debt crisis pape. and sustainable barring our banks must not lead to an unsustainable borrowing from our -- unsustainable borrowing from our banks must not lead to unsustainable borrowing by our government. in a world where so many countries are seeing their credit outlooks put on a negative outlook, our country has come off of wha negative outlook and been affirmed. we have a huge stimulus planned. abandoning our deficit reduction plan would take that stimulus away. that was the imf boss a verdict last week. in the recovery from a -- imf's verdict last week. in the recovery, stability is a precious, hard-won achievements. we will do nothing to undermine that. instead, we should try to manage the nature and pace of the deleveraging. while it is part of the rapid buildup of borrowing in our banking sector, consisting of lending from one part of the system to another, that can be reduced without