joining us with some thoughts mark zandi chief economist at moody's analytics. >> mark. >> hi, susie. >> how do we put americans back to work? >> well, i think this will put the onus back on congress and the administration to do at least a few more things to try to help the job market the next 6-12 months. one would be to extend the current payroll-tax holiday which if there is no legislation will expire at the end of this year, so that's a likely thing they could do. there is also a suggestion of providing more help to state and local governments. as you know, as we see in today's job numbers a big chunk of the jobs lost is occurring at state and local governments under pressure and cutting jobs. we could take some of the pressure off them. there is another idea of cutting payroll taxes at least temporarily for employers to make it less expensive to go out and hire people. they're all ideas. i think some of those may come to fruition if the job market doesn't accelerate in the next few months. >> how much of a difference would those measures make? >> i think it would be helpful. i do

in the meantime, i'm joined by mark zandi, chief economist with moody's analytics. mark, what happened? >> it was stunning. youmentioned some of the statistics, but there was absolutely nothing redeeming in the report. it was a very, very bad month. no other way to characterize it. you know, the job market is still very difficult. >> i guess one thing that leaves my head scratching is, you know, last night every analyst using the adp payroll data, private payroll data, suddenly was talking about, boy there's going to be a surprise in construction jobs, manufacturing jobs, surprises all over the place. all those surprises were going to be pleasant ones. >> yeah. well, if you look at all of the other data economists use to gauge today's numbers, they all point to a much better number. you mentioned adp, but there's a lot of others, initial claims for unemployment insurance, surveys of manufacturers and n nonmanufacturers that showed a lot more strength. that's a reason for some optimism and hope that in the next couple, three months we will see better jobs numbers. be

. >> and, wolf, you just heard mark zandi, big difference in the economy, will create jobs, businessest. if only they could get this deal. >> he's very upbeat. he says if there's a deal and if you believe mitch mcconnell, and we're wait ing ing to hear from on the senate floor and what he told you earlier, he's optimistic, now harry reid, the majority leader, he says basically the same thing. they're very close, cautiously optimist optimistic. all the details are wrapped up. they still have some work to do. that could be done today or tomorrow. they could obviously get this done. but the most important thing that mark zandi said is if they look like they have a deal, he thinks america's aaa credit rate willing hold firm. >> absolutely. so we're going to stick with this, wolf, and we'll be back in a minute and watching the senate floor and bring you senator mitch mcconnell. >>> welcome back to "state of the union." we're monitoring developments that are very fast moving on the senate floor today. and while we watch that for you, we're going to play for you some of senator mitch mcconnel

joining me is mark zandi and.talked last week that if it got more serious in washington the markets would get skittish. was today a beginning of nervousness? >> yeah, i think so. i think with each passing day that we don't get an agreement, investors will start to grow increasingly nervous. stock prices will continue to grow south, ultimately interest rates will start to rise. and if we don't get an agreement in the next couple of weeks, the markets will be in turmoil. >> americans say yes, it's absolutely essential that we get a deal before we reach august 2nd and 39% of americans say we could pass the deadline and, in their view, not have economic turmoil. why the mixed message? are people just doing this for their political presence? >> we've never been here before. why would we ever want to take the chance of what would happen to interest rates and competence in america if we end up having to decide which bills we're going to pay, which ones we're not going to pay. what the debt bond holders don't have to worr

. >> reporter: economist mark zandi believes higher gas prices stalled out an economy still trying to get back to full speed. >> the size of the economy is actually bigger than it was before the recession hit, however, we are lucky if we got a quarter of the jobs back. >> reporter: economist lakshman achuthan sees a fundamental shift in the economy that affects our ability to create jobs. >> i think a lot of people think the jobs problem was caused by the recession. >> no, it wasn't. something was ailing our economy before the great recession. >> reporter: more than 18 million jobs were created during each decade. but from 2000 to 2007, the economy added only 7 million. >> reporter: the seven years before the great recession hit marked the worst business cycle we have on record as far as job creation goes. >> reporter: economist heidi schierholz. >> we have now faced about 11 years of really week job growth. >> reporter: and, scott, the so-called underemployment rate, which includes those who have given up looking or have been forced to work part-time is now back up above 16% again. >

joining us is mark zandi. good to see you. >> good morning. >> put this in context. this has never happened before as far as the credit rating dropping in the states. what would it mean for the average american if we lose our aaa credit rating? >> higher interest rates. if the credit rating agencies downgrade treasury debt and downgrade the debt of fannie mae and freddie mac and important for the mortgage rates we pay, downgrade the debt of various banks, they will downgrade the debt of state governments and other municipalities. i think we all would be paying higher interest rates. instead of paying 4.5% for a fixed rate mortgage loan you might be paying 4.6%, 4.7%. >> with all of the dysfunction the americans are seeing in washington right now, are we going to be downgraded no matter what happens at this stage of the game? >> i don't know for sure. but i think the credit rating agencies have said we need do two things. one raise the debt ceiling limit by next week. the second is make substantive progress getting back to fiscal stateable and cutting our future debts

mark zandi. thank you very much. >>> warnings this morning about a new threat tied to osama bin laden. before he was killed, the terrorist leader wanted to get an al qaeda cell in somalia to strike inside this country. he focused on this network after learning some of the fighters had ties to the u.s. and may hold american passports. abc's pierre thomas is in washington with the latest on this. good morning, pierre. >> reporter: good morning, robin. there's a dangerous new front in the war on terror. one with direct implications for the u.s. homeland. abc news has learned that before he died, osama bin laden was secretly urging al qaeda's affiliate in somalia, known as al shabab to target the u.s. the reason bin laden was so focused on somalia is he knew many americans of somali descent went to fight a war there alongside islamic radicals. sources tell abc news, at least 40 somali-americans have fought there, including at least 3 suicide bombers. >> they know our weak points. >> reporter: they ha

durbin: first, during the course of your presidency campaign, mark zandi, your economist, helped you formulate some positions. his opinion of president obama's stimulus is that it stopped a precipitous decline in our economy, that it a -- did it achieve all we hoped for? no. mr. mccain: can i interrupt on that particular point. mr. zandi was one of many advisors to my campaign. the key advisor was douglas holtz-eakin, former head of the c.b.o., who had no brief whatsoever for that proposal. please go ahead. mr. durbin: the second point i'd like to ask the senator from arizona, i think one of the real bedrock beliefs among republicans is that if you cut taxes particularly on the healthiest -- wealthiest people in america the economy will pros puss. didn't the debt of the united states double under the president and he left a shambles behind him? 2.3 million jobs lost in the first three months of president obama administration because of this failed economic policy which you continue to espouse, that if we cut taxes on the rich, america is going to get wealthier. haven't we tried it? w

"the new york times" reported this on thursday, quoting mark zandi, a prominent economist at moody's, and i'll put it up on the screen. zandi, the chief economist at moody's analytics said "you keep putting one piece of sand on the pile, nothing happens and then, all of a sudden, it just caves." several traders and bankers, including mr. zandi, said the imminence of the possible default was already damaging the united states' standing as the most creditworthy country in the world. the tarnished reputation may linger, even if the government reaches a deal, and especially if the country's financial books remain unbalanced. our aura is diminished, you know people really view the u.s. as the aaa, the gold standard," and i think we're tarnishing that. that's according to mr. zandi. how much damage do you think has been done. >> there's no question enormous damage has been done to our creditworthiness throughout the world, the perception of america as a country that not only is solid, and when there are difficult problems, as we have done in our history, we address them. we don't kick the c

country's most distinguished economists: alan blinder, former vice chairman of the federal reserve; and mark zandi former consultant advisor to this senator mccain evaluated the response to the last downturn. their conclusion: absent that federal response, we would have had great depression 2.0. mr. president, the legislation before us would have prevented that federal response. they call this legislation cut, cap, and balance. they misnamed it. they should have called it cut, cap, and kill medicare. because that's precisely what it would do. mr. president, why do i say that? because when i referred earlier to the internal -- inconsistency of this legislation, this is what i was referring to: they have two different spending caps in the lilings befor in the us. in one part of the legislation, they say the spending cap would take spendin spending from 24.1f g.d.p. to 19.9%. that's in one part of the bill before us. in another part of the bill -- constitutional amendment -- they say, the spending cap would be 18% of g.d.p. so i don't know who cooked this up, but you'd think they'd have at least gott

to help me do that, mark zandy, h he's a chief economist for moody's.of times about the stellar aaa rating. we are awaiting, as i mentioned the fine print on this republican legislation. but we keep hearing something about a cap. and i know it's a cap on federal spending. and take a look at this. somewhere in the range of 18% of gdp, gross domestic product. please tell me what that means. and specifically, because this is when all the ears will start perking, what that would mean for job creation, which the republicans say is their top priority. >> well, 18% of gdp. so government spending would have to equal 18% of the value of all the things that we produce. it's not a magical number. that has been the average spending to gdp ratio since the early 1970s. so the logic is that -- or the thinking is that if that's been the average since the 1970s, then that's good enough for us going forward. but, you know, of course, the demographics of our population change. there is an aging of the population. medical care costs are rising very quickly. if we stick to

. >> that brings me something, a quote that i saw from mark zandy, here's what he said, you keep puttingain of sand, and nothing happens, then all of a sudden, something caves. could you see something like that occurring? >> absolutely. on wall street they're calling that a t.a.r.p. moment, many people don't remember this, but before the big bank bailout bill got passed, it got voted down by the house of representatives. that day the stock markets had their second biggest one-day loss ever. that loss in the stock markets was actually the thing that basically pointed out to lawmakers who were saying no to that, look, this is really important. this is the kind of thing that's going to happen if you don't approve this big. so that's one of the things that people think might happen this time. it may take a major plunge in the stock markets or some other awful event. >> hey, rick, i do have to go, so if you can give me a yes or no, will we hear from wall street soon? >> absolutely. we've already got standard & poor's, some of the house gop guys today or tomorrow. >> rick newman, always apprec

durbin: first, during the course of your presidency campaign, mark zandi, your economist, helped you formulate some positions. his opinion of president obama's stimulus is that it stopped a precipitous decline in our economy, that it a -- did it achieve all we hoped for? no. mr. mccain: can i interrupt on that particular point. mr. zandi was one of many advisors to my campaign. the key advisor was douglas holtz-eakin, former head of the c.b.o., who had no brief whatsoever for that proposal. please go ahead. mr. durbin: the second point i'd like to ask the senator from arizona, i think one of the real bedrock beliefs among republicans is that if you cut taxes particularly on the healthiest -- wealthiest people in america the economy will pros puss. didn't the debt of the united states double under the president and he left a shambles behind him? 2.3 million jobs lost in the first three months of president obama administration because of this failed economic policy which you continue to espouse, that if we cut taxes on the rich, america is going to get wealthier. haven't we tried it? w

country's most distinguished economists: alan blinder, former vice chairman of the federal reserve; and mark zandi former consultant advisor to this senator mccain evaluated the response to the last downturn. their conclusion: absent that federal response, we would have had great depression 2.0. mr. president, the legislation before us would have prevented that federal response. they call this legislation cut, cap, and balance. they misnamed it. they should have called it cut, cap, and kill medicare. because that's precisely what it would do. mr. president, why do i say that? because when i referred earlier to the internal -- inconsistency of this legislation, this is what i was referring to: they have two different spending caps in the lilings befor in the us. in one part of the legislation, they say the spending cap would take spendin spending from 24.1f g.d.p. to 19.9%. that's in one part of the bill before us. in another part of the bill -- constitutional amendment -- they say, the spending cap would be 18% of g.d.p. so i don't know who cooked this up, but you'd think they'd have at least gott

the white house advising net, mark zandy.have at 8:30. >> thank you very much. see you at 9:00 eastern time here on msnbc. >>> coming up, maria bartiromo are here. [ female announcer ] the healing power of touch can be even more powerful, with precise pain relieving cream. it blocks pain signals fast for relief precisely where you need it most. precise. only from the makers of tylenol. >>> 32 past the hour. welcome back to "morning joe." a dramatic end for the top selling but troubled tabloid. it's on the front page of every paper in britain. the paper will shutdown on sunday. a controversy over a phone hacking scandal. it's accused of hacking into cell phones of thousands of people ranging from people in iraq and afghanistan to the 2005 bombings as well as the royal family. the former editor has been arrested in connection with the scandal. he's the former communications chief for prime minister david cameron. he called for new regulations of the press. >>> paris prosecutors opening a preliminary investigation into sexual as

economists in our country -- alan blinder, the former deputy chairman of the federal reserve, and mark zandi presidential campaign -- studied the government response to the latest financial crisis. here's what they concluded: "we find that it's effects on real g.d.p., gorks and inflation are huge and probably averted what could have been called great depression 2.0." this amendment before us would have stopped the governmental response which two of the nation's most distinguished economists tell us averted great depression 2.0. when all is said and done, the financial and fiscal policies will have cost taxpayers a substantial sum, but not nearly as much as most had feared and not nearly as much as if policy makes had not acted at all. if the comprehensive policy responses saved the economy from another depression, as we estimate, they were well worth their cost." mr. president, this amendment that is before us now would have prevented this response, would have prevented averting a great depression. mr. president, here is the work of zandi and blinder with respect to what would have happened

republican budget. 900,000 jobs would be lost next year. 1.7 million jobs by 2014, according to mark zandy. -- zandi. all combined, it is almost 2 million jobs. 200 days in office, almost 2 million jobs lost by the legislation they have proposed. that is what they are proposing. and in committee, they have introduced a transportation and infrastructure bill that would lose 600,000 jobs. that has not yet come to the floor yet, but as the chamber of commerce has said, investment levels are unacceptable. the bill would destroy, rather than create jobs. that is what the chamber of commerce said about their transportation bill. we will keep up the fight for fair wages and good benefits. we will stand up for working families, for a stronger middle- class, and for a growing economy. right now, republicans are proposing drastic cuts in their budget that will undermine our economic recovery, while threatening medicare, medicaid, and social security. together, we will fight for our workers and american jobs, and in doing so, make our country greater, strengthen our economy, and strengthen the middle

country's most distinguished economists: alan blinder, former vice chairman of the federal reserve; and mark zandi former consultant advisor to this senator mccain evaluated the response to the last downturn. their conclusion: absent that federal response, we would have had great depression 2.0. mr. president, the legislation before us would have prevented that federal response. they call this legislation cut, cap, and balance. they misnamed it. they should have called it cut, cap, and kill medicare. because that's precisely what it would do. mr. president, why do i say that? because when i referred earlier to the internal -- inconsistency of this legislation, this is what i was referring to: they have two different spending caps in the lilings befor in the us. in one part of the legislation, they say the spending cap would take spendin spending from 24.1f g.d.p. to 19.9%. that's in one part of the bill before us. in another part of the bill -- constitutional amendment -- they say, the spending cap would be 18% of g.d.p. so i don't know who cooked this up, but you'd think they'd have at least gott

country's most distinguished economists: alan blinder, former vice chairman of the federal reserve; and mark zandi former consultant advisor to this senator mccain evaluated the response to the last downturn. their conclusion: absent that federal response, we would have had great depression 2.0. mr. president, the legislation before us would have prevented that federal response. they call this legislation cut, cap, and balance. they misnamed it. they should have called it cut, cap, and kill medicare. because that's precisely what it would do. mr. president, why do i say that? because when i referred earlier to the internal -- inconsistency of this legislation, this is what i was referring to: they have two different spending caps in the lilings befor in the us. in one part of the legislation, they say the spending cap would take spendin spending from 24.1f g.d.p. to 19.9%. that's in one part of the bill before us. in another part of the bill -- constitutional amendment -- they say, the spending cap would be 18% of g.d.p. so i don't know who cooked this up, but you'd think they'd have at least gott

our friends on the other side of the aisle say they want create jobs but moody's chief economist, mark zandi, has said that hiring is only going to resume if we can get our act together and settle this debate, and the sooner the better. at the beginning of the month, moody's announced that it might downgrade our country's credit rating if congress isn't able to come to an agreement by the middle of just a moment that's a week away. and if that happens, i promise you, our economic recovery is going to halt in its tracks. maybe some people want that. i hope not. but today, investors are looking at the scene here in congress and they're wondering if we're ever going to get it together. and the longer we wait to get serious, the higher the interest rates are going to move and that hurts everyone in america. everyone who owns a home or runs a small business is going to be squeezed while congress is in this ideological standoff. now, you read david brooks' column this morning in "the new york times," a brilliant column talking about the unreasonableness of this position that something is absolutel

mark zahny -- zandi has said that. an economist who worked for a number of republicans, such as john mccain, former presidential candidate. why are we trying to reinvent the wheel? all economists will say, you don't make immediate cuts in this fiscal year, you project them out. just like budget and household. they move out. they do what they are going to do for the month of june. then for the month of july, and then for the month of august. but, no, i am particularly sensitive to the fact that only this president, only this one, only this one has received the find of attacks and disagreements and inability to work. only this one. read between the lines. what is different about this president that should put him in a position that he should not receive the same kind of respectful treatment of when it is necessary to raise the debt limit in order to pay our bills, something required by both statutes and the 14th amendment, why isn't it addressed in the manner? it's all right to disagree or agree on the balanced budget am

economists in our country -- alan blinder, the former deputy chairman of the federal reserve, and mark zandi, who was an advisor to john mccain's presidential campaign -- studied the government response to the latest financial crisis. here's what they concluded: "we find that it's effects on real g.d.p., gorks and inflation are huge and probably averted what could have been called great depression 2.0." this amendment before us would have stopped the governmental response which two of the nation's most distinguished economists tell us averted great depression 2.0. when all is said and done, the financial and fiscal policies will have cost taxpayers a substantial sum, but not nearly as much as most had feared and not nearly as much as if policy makes had not acted at all. if the comprehensive policy responses saved the economy from another depression, as we estimate, they were well worth their cost." mr. president, this amendment that is before us now would have prevented this response, would have prevented averting a great depression. mr. president, here is the work of zandi and blinder with