i could imagine you heard others say this, mr. zandionth when i go on your show, i say the same thing. the monthly jobs numbers are volatile. the president said last february when we had a very good report that the numbers were going to go up and down, that is the nature the economy. we still face a fragile world economy with lots of head winds out there. from europe and spikes in gasoline prices, and that's just the nature of economic recoveries. they don't move in straight lines. >> we have three key moments coming up in the next five yeeks. when it comes to europe. tough greek elections. you have the g20 meeting. you have the eu that has to meet and make a decision and respond to whatever the greeks decide to do. never mind spain or italy. do you see any improvement on the horizon? doesn't this mean a longer trend of downward spiral here? >> i think there are headwinds coming from a number of sources. europe is one. the drop in oil prices should help our economy going forward. also, some of the housing numbers coming in indicate that

we had mr. zandy, who i think represented the cbo's position, and mr. taylor from stanford that represented the alternative. that gives an illustration on this point. miss bonamici? >> thank you. and thank you, dr. elmendorf, for your testimony. frequently mentioned is increased spending, and your testimony certainly reinforces that as well. traditional approaches to addressing rising costs have included cutting people from care, cutting provider rates, cutting services. in my state of oregon we've come together in order to take a new approach, particularly regarding the uninsured in our medicaid dollars. it was quite refreshing to see business, labor, republicans, democrats, educators all come together and work on this health care transformation that is with a goal of improving care while cutting costs, integrating and coordinating services, including physical and mental and oral health care. the modeling that's taken place involves coordinating physical and behavioral health care, better preventing and managing chronic diseases using patient centered

mr. zandi's response to my comment. now, i started out in banking in the mid-1980s and i think the marginal tax rate at that time for upper income people was either 50% or 70%. i don't know when exactly reagan reduced it, but i was in the top 2% of wage earners at that time. i was making over $50,000 a year at that time, because the bank managers were so frightened and the owners of paying taxes, they gave the money out in bonuses and pay increases, and that's why we had a vibrant economy. you've got all the money concentrated in the hands of the few, and they don't borrow, except maybe on a revolving line of credit for their businesses, but other than that, they don't need any money. so you can lower the interest rates down to zero. you can have them suck up all the wornless bonthless bonds in country, and i just don't think it's going to go anywhere. we need to raise the taxes and tell the bits community, the wealthy, that if you put your money in jobs, then we'll cut your rate, and if you don't, then you can pay 70%,

mr. zandi, when you hear stories like this interpret for us as to what this means is that can do about it. >> guest: of course, businesses need to borrow money to finance operations to invest, to hire people to grow and expand. i'm large companies issue bonds ious to investors and take their money at magistrate. well, in in times of turmoil when investors are very nervous, particularly about getting money back, they will require from the i/o you are bound to higher interest rates at the cost of borrowing rises. of course, as the article pointed out, this is happening at the same time to interest rates for safe bonds like the u.s. treasury bond are following because people don't want to own a corporate bond that is more risky. they want to own a safe unlike the u.s. treasury. but the factions driving down treasuries to decimate wiring costs for businesses or even household are going to come down. but that is one reason why the federal reserve from some of the factions in the last couple three ye

caller: good morning, mr. zandi. why don't more economists advocate for more non-debt- producing stimulus sources such as the territorial treatment of the profits of international corporations and the keystone pipeline? i do not see why that would stop economists from advocating that path. it seems like the path that we get are the debt-producing path where the non-debt-producing paths are just in the claus oset. guest: you make a good point. i think there is support for some of the things that you propose. you brought territorial taxation. that is part of a broader debate. there is a great deal of bipartisan support for the need for corporate tax reform. that goes back to reducing some of the loopholes in the tax code and using what revenue you generate to bring down tax rates for all businesses of all kinds. the territorial debate is part of that. i'm optimistic we'll get corporate tax reform. the xl pipeline is another good case in point. there is general agreement that will need to develop all of our energy sourc

where there's a difference of opinion on multipliers and maybe going back to the hearing, we had mr. zandy representing the cbo's position and mr. taylor from stanford with an alternative position. that hearing probably gives a little ill illustration to the point. >> thank you, mr. chairman, thank you, dr. elmendorf for your testimony. the cost of health care is frequently mentioned as a significant factor in increased spending in your testimony certainly reenforces that. traditional approaches to addressing rising costs with care, rates, and in my state of oregon, we've come together in order to take a new approach, particularly regarding the unensured and our medicaid dollars, enand it was quite refreshing to see business, labor, republicans, democrats, educators all come together and work on this health care transformation that is with the goal of improving care while cutting costs and integrating and coordinating services including physical, mental, and oral health care. the modeling that's taken place, better preventing chronic diseases, using patient centered primary care homes, and

we had mr. zandi, who represented

mr. mark zandi is absolutely right. we are approaching the limit of what the fed can do to save the country from congress. when we look to what's going to happen between now and the end of the year, you have tax increases to deal with and the debt ceiling. we probably have the health care decision coming out of the supreme court in the next couple weeks. there are some bigger fiscal issues to deal with between now and the end of the year. to think the fed will save us from all our bad decision making is shortsighted. host: the represented sits on the budget committee and small business and joint economic committee. he's a member of the tea party caucus, serving as pressman term -- freshman term. caller: i just wanted to make my comments that we did not want to recall in wisconsin, but it could turn the country around. we want balanced budget. we never wanted to be pitted against neighbors. now we really need to pay attention. we need to listen to paul ryan. congress really needs to work with him. thanks so much. host: d

mr. kacarney will continue with his briefing. in the meantime, waiting for this to start we'll bring awe portion of today's "wall street journal." our guest this morning, mark zandimoody analytics, chief economist and talk answer calls for fed action after a weak jobs report issued by the labor department last week. >>> mark zandi, chief economist analytic, thanks for joining us from west k4e69or, pennsylvania. >> good morning. thanks to having me. >> calls for federal action after we all the saw the weak jobs report come out last week, but the fed's main purpose is monetary policy. how does that relate to job growth? >> well, the federal reserve play as very key role in terms of the broader economy, and job creation. it lowers interest rates in times of difficulty like the current period to make it easier tore people to borrow money. for businesses to borrow money, go out, invest and to hire. takes pressure off people who borrowed lots of money already, debtors, and brings down debt service burden so it makes it easier for them to go out and spend. it's key to businesses hiring people. there's lots of different ways that influences the economy broadly in job cre

most economists, zandy to nobel laureate krugman, to more involvement, particularly when you see the crisis in europe and downgrowth in china, 2% looks good. i think he's done a good job, mranke and hopefully he'll do everything he can to keep this economy moving and to support a fragile economy. >> i pose the same question to you. as carolyn put it, you got a shaky world economy, a fiscal cliff, anemic economy here at home. is it bernanke's per view? should he ease? >> no, q he-1 and qe-2 didn't work to produce the high. it gave us a sugar high in the stock market. it creates more uncertainty within the market. and again, i think the real problem is that we're facing this fiscal cliff that congress has not got its financial house in order. the president continues to talk about higher taxes on job creators, and now we've seen just this tsunami of red tape on businesses as well as his health care plan. i think there are limits to what monetary policy can do, and we've reached them. >> carolyn maloney, have we reached those limits? let me just pause this, i want to set this up. we've had roughly a trillion dollars in federal government spending, but with the fed, they've cr