is all of the above for the economy and if it shrinking it produces less the problem is the united states economy in recent years has been consuming its capital stock that's like burning furniture to heat the whole according to famous economist leunig misses it's very counterproductive and i believe the fed is directly contributing to this capital consumption by keeping interest rates artificially low so that there is little incentive to say and the lack of savings implies a lack of investment not even enough reinvestment to cover for depreciation that's what's happening here the fed doesn't even seem to acknowledge it or realize it well i think that's very interesting because the percepts in is that what the fed is doing is it's doing it to strengthen the economy to help boost growth but you're saying in fact it is directly because of the fed that this dynamic is going on that we just saw the depreciation and investment and so you're saying that actually they are responsible for further depressed growth down the line. well they're partially responsible i mean don't get me wrong there are a numbe

five days and counting until the united states economy goes over the fiscal cliff if something isn't done. >> american people are waiting for the ball to drop but it's not going to be a good drop. >> reporter: with no deal taxes will go up and spending will be slashed. some warn the impact could spark another recession. with the deadline approaching the president returned to the white house and the united states senate is back in session. the house will reconvene by sunday evening. >> there is still time and it depends on how complicated the fiction it. >> reporter: the sticking point continues to be taxes. democrats want to extend the tax cuts to everybody but those americans making $250,000 or more a year. republicans remain against any tax increases. the debate is park sparking a high stakes match. >> the speaker cares more about his speaker ship than helping the nation. >> nobody is willing to pull the trigger. everybody wants to play the blame game. it's about to put us over the edge. >> reporter: and that's just where the economy may go. some say a situation could be allowing t

global reserve it is more liquid he's reasoning in a circle that said don't get me wrong the united states' economy is large obviously the volume of dollars circulating as large as a result of that but in one thousand nine hundred forty four when the bretton woods agreements were negotiated the united states was essentially fifty percent one half of the entire global economy and today it's slipping below twenty percent and it's being overtaken by the rapidly growing brics brazil russia india china south africa and so this idea that the u.s. by definition is the largest deepest most liquid market so largely just a matter of convention and if the dollar loses confidence of people is competence in the dollar as a stable store of value they'll use it less and less it will depreciate in value gold will go up in value wait long enough gold will be more liquid and we'll have a lord for market capitalization than us treasuries may take a few years but we're going to get there wow but does that is it going to require a change in law because taxation is another way that people and forces have a currency you

is all of the above for the economy and if it shrinking it produces less the problem is the united states economy in recent years has been consuming its capital stock that's like burning furniture to heat the whole.

immediately after those hurricanes hit the gulf coast, the rate of job creation in the united states, we had a robust economyack then, dropped by 75%. the northeast is a larger portion of the united states economy. the hit that we took from sandy in terms of economic effects appears to be larger. so i do think that we'll see a sharper falling off in employment growth than is generally anticipated. >> what happens to sort of government employment versus sort of private? >> i think the public jobs had sgroen in the earlier two months. we saw a little bit of a pull back in the october data. my guess is in the immediate after math of sandy, we also had the election going on, probably a small drop in government employment not going to affect the headline number significantly. >> and construction employment had been up for five straight honesties. you'd think post sandy we would get a bigger boost. >> we may see more of that boost in december simply because of the timing of when the survey occurred. we haven't seent pick up in terms of the recovery crews. but the net effect of sandy i think we'll see some addition

and it is a bigger for the united states economy.enefit is that each year companies issue benefits for holding the stock and many companies including the most popular will do this and many more, before year's enbecause the dividend tax rate will go from 50 percent and possibly close to triple. so, it makes senator. next year we will have companies that have to pay dividends and pay them to individuals who are taxed at a high are rate. this does not solve a permanent role but a one time give to a shareholder at the end of the years pay less now opposed to more later and when we get to next year we are in an economy that is in a higher tax environment, companies will grow less well if that environment, association whatever cash they have, and they have available to pay out, will be taxed at a high are rate. >>neil: what do you make of the argument we had much higher dividend tax rates in the reagan administration, a good part of the clinton administration, and we did fine. >>guest: it was great to be a world monopoly. a wonderful thing

i want to you think about the united states economy like a runner along this road. c recovery and prosperity is the destination, the economy right now, that's warming up with a nice jog, getting ready to break into a full sprint. gross domestic product, the broadest measure for the economy grew by an annual rate of 3.1 over the summer, more than double the rate of the previous quarter. spending by americans was the single biggest factor in that growth and more americans are spending their money to buy a home, pushing prices upward across the country. the median price of an existing home shot up 10.1% in november year-over-year. we've seen home values rise six months in a row as more americans get back to work and take advantage of those low mortgage rates. bottom line here -- our runner, the u.s. economy, is just starting to break a sweat and that runner should start to sprint soon as america begins to reap the rewards of its domestic energy boom. we're extracting record amounts of oil and gas from shale through fracking and other technologies. pushing prices for nat

. >> someone who has a vast understanding of the united states economy with time on the budget committee, there seems to be speculation amongst members that we are not going to go off the cliff at the beginning. we have up until january 10th or 15th or 20th before things get really bad. the market is continuously going down since plan b failed. there seems to be no agreement in sight. how confident that we won't see a total tanking of the markets? >> i'm not confident. i don't think we will see a tanking market, but the market will respond if we don't get it there quickly after the new congress this morning. i think that's a wild card of a discussion. we have a lot of new members. 80 something new members coming to the house and some of them bring the same mandate that many of the more conservative republicans did, but a lot of them don't. i think it's a different mentality. we blurred the lines between campaigning and governor. a lot of them want to govern. i think things can happen quickly in january. >> there is a lot of talk with the gop looking ahead to the debt limit when there wil

the same thing for the united states economy. we need to grow.grow until we have confidence. confidence for business to expand, for banks to lend, for consumers to go out and buy that new house, and we won't have that until we get congress to act. that's the critical nature of this. sure, there's a debt ceili coming up and sure there are tax increases and spending cut ifs we go over the cliff. but the bigger issue is, we're stopping ourselves from finding the solution, which is growing the economy. >> right, well, if the deficits continue to become a problem and slowing the deficits is a great solution. it's the speed at which we slow these deficits and the manner in which we slow these deficits that i think a lot of people are trying to hammer out. who do we know the formula for what's a healthy speed and how do we know the formula for what's a dangerous speed? >> all right, look, he's the immediate issue. we had emergency spending of an extra $1 trillion four years ago, that pretty much everybody agreed was needed to keep the economy from going

the whole picture, both the president and speaker boehner have the best intentions of the united states economy at heart eye really believe that. they came within $500 billion, within the $2 picture 5 trillion debt reduction they wanted to have. they came that close and weren't able to pull it off. but now both parties have to not hold up a mirror to each other, but to themselves and say, how do we resolve it? the first step is the fiscal cliff. if we take $700 billion out of our economy over the next year, our gross domestic product will grind do a halt. we will have zero growth next year, which means a recession. what they have to do now, i know it's ridiculous, but over the next few dayings, get that down to about $100 to $200 billion. brad's spot on. we cannot afford these crazy cuts across the defense and domestic programs at this particular time. if we can get it below $200 billion, then we can have -- instead of a fiscal cliff, a gradual slope so that, like a skier on a bunny slope, our economy -- which is fragile -- will continue to accelterate. then, what has to be done, is step back,

the fiscal cliff is a very real danger to the united states economy. it's a recipe for a recession. and i certainly would not like to see the rhetoric that we saw from the treasury secretary tim geithner who said he's prepared to go over the fiscal cliff. that is not a good way to talk about what's going on right now. >> mr. reich, let me ask you the same thing. do you think there's code suggesting they are working towards something? because, doug, as you point out, the language was really harsh during this week. but all of a sudden, here we are friday evening and people are saying these kind of soft things that say maybe compromise. what do you think, robert? >> i think doug is right. it's too early to break out the champagne, but undoubtedly, the rhetoric is softening as we get closer and closer to the christmas holidays. these people want to go home. they want to have a holiday. they know that they cannot go home to their constituents and say essentially, i couldn't get anywhere. we're going to go over the fiscal cliff together. and that's particularly true and particularly diffi

coming up, the federal reserve announces a major move to bolster the united states economy. we'll tell you what the plan means for you if you're in the middle class, next. stay with us. >>> coming up, we'll take a look at what is the heart of michigan's right-to-work law. it's not only about politics, it's about money. follow the money. >>> and it really is the latest attempt to tip the scales for the gop. coming up for 2016, we'll have all the details. >>> later, attorney general eric holder makes a push for election reform. hear, hear. we'll have his comments and talk about it. >>> and senator kent conrad joins me to discuss the fiscal cliff negotiations and look back on his time in the senate as the senate massachusetts budget chairman. don't forget you can listen to my radio show on sirius xm radio channel 127 1:00 p.m. monday through friday to 3:00 p.m. you can share your thoughts with us on twitter. we're coming right back. >>> welcome back to "the ed show." thanks for watching tonight. over the past two years, federal reserve chairman ben bernanke has repeatedly asked

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that we are at risk of getting stuck in the slow growth quagmire that japan got stuck in, the united states economy? >> well, i would say we are in a mild version of it now, and, you know, we need to do improvements and reforms. i don't think spending money is the solution. there are smart ways to spend it for sure, but i don't buy this idea that bigger keynesian stimulus will solve our problems, these fundamental problems with demographics, with slowing innovation, and other things we are experiencing. i think we need more fundamental reform and my colleagues like paul krugman will say, you know, i hear that all the time but i really want to see -- i want to see stimulus now, and i think we have been doing this for a long time, we are doing it at seven percent of gdp at the moment, and i think it is sensible to try to slowly rein it in. >> rose: so what should be the percentage of spending to gdp? >> okay. well, clearly it depends, are you paying for education? are you paying for healthcare? you can't compare the united states and europe because we privately buy a lot of things that they do public

coupled with the fact yet again the debt is hitting the ceiling in the united states this could lead to dire consequences for the global economy let alone the united states let's talk now to patrick young co-author of the gathering storm brown bear broadband good to see you patrick so how bad do you think it's going to get if not in january but in the first quarter of two thousand and thirteen. well the situation is an incredibly perilous i mean think about the history of american debt three decades ago america owed the world about nine hundred and it billion dollars now that may sound like a big number but bear in mind at the moment it borrowing a hundred billion dollars every single month the total debt in america is roughly fifteen trillion dollars i mean that's the sort of amount of money that if you put the notes end to end you get most of the way towards mars it's an absolutely rejects of mind of money and the problem we've got is you've got politicians who are still in never-never land mr obama is wanting to actually exist then the a mind of money that america can manage to borrow it's a bit like giving a drunk more vod

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consumer confidence in the largest economy in the world the united states has dropped to its lowest level in four months in december well guess why the fiscal cliff is still there no deal has so far been reached that coupled with the fact yet again that is about to hit the ceiling could lead to dire consequences for the global economy let alone the united states and patrick young says it's time to stop fueling the flames shri get kids and go america owed the world about nine hundred billion dollars now that may sound like a big number but bear in mind at the moment it's borrowing a hundred billion dollars every single month the total debt in america is roughly fifteen trillion dollars i mean that's the sort of amount of money that if you put the notes and the end you get most of the way towards mars it's an absolutely rigid mind of money and the problem we've got is you've got politicians who are still in never-never land mr obama is wanting to actually exist then the a mind of money that america can manage to borrow it's a bit like giving a drunk more vodka as i've often said and at the

a lot of pessimism coming out on the economy. 49% of people think the united states economy will be betterom now. it is down from 53% in 2011. senior economist from wells fargo is here with us right now. how much does this matter? >> well, it matters when we see big changes. it signaled that there is a pullback in attitudes. if folks are more worried about the economy, they are less likely to commit to major purchases. right now, i think, it is really a situation where we will get past christmas and that is when i think folks will really focus on the fiscal cliff. if we do not get a resolution, i think it could really cut into spending in the early part of next year. connell: this fiscal cliff talk and countdown is so painful. it came up yesterday, they do this every time in washington. it gets to people after a while. regular people who just hear about it. even if it does not affect them that much. they just start to think, the government cannot do anything right. say they do. say they cut a deal. they come up with some sort of fiscal cliff solution, if you can call it that. what does the

we know it is something that would threaten not only the united states economy, but the economies around globe. if we go over that cliff, there will be steep cuts and spending and steep tax increases that would automatically kick in. what we're doing here today is talking to our elected officials, talking to people who are involved in these talks, trying to figure out what will happen, where we are and if there's any way to avoid that cliff, if there's a good way to come about with tax reform and a close look at what's been happening on the spending side, as well. we have a lineup of a lot of gets who are here. joining us this morning, early on we'll be joined by representative jeb henserling. he will give us on some of the insight on what is happening. we're talking to senators this morning. senator ron johnson will be joining us. and grove er nordquist. he is rite in the center of this base. a lot of people see him as a huge part of the problem. if you want to get something solved ahead of time. but there are others that say this is the right thing to be doing at this point. this is a

in greece, you often hear members of this house who say the united states economy is going to be like greece. oh, really? greece is not growing. greece has lost 25% in its economy in the past five years. greece's economy shrunk by 7% this year alone. there's a 20% unemployment rate in greece and even higher for younger people. greece doesn't make anything that the rest of the world wants. the american economy is dynamic. the american economy always needs to be improving with education, scientific research and infrastructure investment. so, a rational system, a rational political system would respond much differently than what is going on here in this congress. we're talking about spending cuts and allowing tax cuts that haven't produced economic growth to be extended. all of the people that are talking about spending did all the spending. they are the debt and deficit creators. if we want to experience economic growth we have to invest in this economy. and it's critically important to the future of this nation. medical research. we need to enhance not cut funding to the national insti

economies by means of common currency. this is not the first time these things that happened. it happened in the united states of america. you have disparate economies in the united states of america that are bound together monetarily. missouri and washington state are as different as germany and greece. what is it that keeps the united states together? you had a great depression here in the 1930's. things were awful. and yet, i do not believe there were any political movements to get rid of the deficit states from the united states, like there are in europe and portugal and spain and everywhere else that happens to be in deficit. the reason is, the federal- state, especially after 1929 plays the role of the regulator of surplus and deficit recycling around the land. let me give you a simple example. we are in seattle. boeing is sponsoring the lectures. when boeing goes to washington to give a contract for the next generation jet or whatever, they may get it. they do get it. but there are some things attached. like for instance, we want a factory that builds the wings are the engines in tennessee or missouri or arizona. i

growth will neither brazil or russia were hit as hard by the economic crisis as the united states where the economy's been unstable we've seen the layoffs or the european union where there is the debt crisis the eurozone crisis various austerity measures and so on russia and brazil are also members of the alliance of giants the brics which also includes china india and south africa brazil is also russia's largest trade partner in south america currently the trade turnover stands at around six and a half billion u.s. dollars it's not that much compared to see russia as european partners but the two want to see this figure exceed ten billion in around two years before coming to moscow from. brazil. madame president reminded that she is portable gary and for her this is sort of a trip a return to her slavic roots so sort of briefly today there's definitely lots to talk about or a lot of expectations from this meeting and of course we'll report about it as soon as it happens here in moscow later on friday. artie's your piece going to thank you very much for that update. for ages a mother international ne

energy crisis to push for a revolutionary change in how we deal with energy here in the united states with the economy crippled by inflation and gas shortages jimmy carter used a nationally televised address to discuss what he called a crisis of confidence afflicting america unlike how bush two decades later would call on americans to indulge themselves after nine eleven when really what was needed was deep introspection about america's role of the world carter challenged the nation and spoke bluntly about the crisis america was facing. family. close knit community is now faith in god to many of us not. to to worship so often diligence and consumption and i'm asking you. for your good and for your nation's security to take. trips to use public transportation whenever you can and to talk your. extra day week to a greater speed limit and assist them instead to save fuel. energy conservation like this is more than just common sense. i tell you it is an act of patriotism very rarely do american presidents speak in such a tone the american people very rarely especially nowadays to presidents tell the incon

remember the beginning of the united states of america. the economy of the southern northern states was very very different and evey today, the economy in montana im very different from the economy and lower manhattan. and we found a way to deal with that and to regulate it. the same is true in europe in the same is true in china and the same is true in india and brazil. india. same is the same is true and brazil. this country deals with gaps between the rich and poor, agriculture, and earthen industrialize an evolving in much the same way that we're going to have to on the global stage for a the problem has been solved and can be solved. >> host: good afternoon, we have a caller from new york city. >> caller: hello, i'm so happy you're taking my call. my question is this fiscal cliff that we are approaching. if president obama allows it to happen, what kind of catastrophe are you talking about? i'm kind of concerned? so negatively will this affect the industry? how bad will it really be out there on wall street and main street? >> guest: well, let's

united states. this is the u.s. economy.nt we're going to work it out. >> steve: we saw lindsey graham on one of the chat shows yesterday. he had, i think we're going over the cliff! it sounds like you are much more optimistic than lindsey graham. >> well, i just believe in america and what we're about is so important 'cause it's about economic development. it's not just solving the fiscal cliff issue. that's just a near term issue. but that solution needs to create a business environment that allows businesses to grow because we're only expanding 2% gdp. we need at least 3 1/2, 4% to bring down unemployment. so we are fighting for the soul of america. >> steve: 'cause you need to help the economy and sell cars, too. >> that's an important part, to because next to our homes, the purchases -- it's always a lead indicator. >> gretchen: you would know, and this is why you were invited, because you run ford and you've been very successful at it. by the way, you took no bailout money because you borrowed money before that other f

do about the world, but very much in terms of what the impact of this is going to be on the united states economyright, and you know, the united states and other industriallized countries have taken great efforts to minimize the amount of air pollution which could be leading to global warming or not the. and they have regulations in place. if the-- i would argue the unindustrialized world, some of the third world countries and countries that have more amounts of pollutants and don't have the environmental regulations that other parts of the industriallized world would do, is that wrong? >> well, the rapidly developing countries in the developing world, china and india in particular are actually the source of most of the increasing greenhouse fasts that we've seen in recent years and the united states is at a level of greenhouse gas emissions it hasn't been at in over a decade. so, partially due to our own repressed economy, but partialingly due to the fact that you're talking about regulations and alternative fuels, the u.s. economy and other industriallized economies have actually seen their emi

you think one month tells you the full scope of the united states economy, what was it like for a year year. more importantly, you have a couple months of modest if not a little better than modest jobs growth. so you have somewhat encouraging news. there are things to look at in the monthly report that are discouraging, people leaving the labor markets, uncertain about the future. you have the rate going down, somewhat more optimism in terms of the jobs market as congress faces choices on the fiscal cliff. >> how does it play into fiscal cliff negotiation? >> you would think it gives them a sobering sense of if we do the right thing, maybe the economy keeps growing, if we do the wrong thing, might tip the united states. some think even the possibility of another global recession. you would think it would be a motivation to get things done. if you listen to what's said publicly, see if they're working out a deal privately, there are staff level conversations but most of the big voices dug in. >> you had a fascinating interview with the head of the international monitoring fund, it will

united states was estimated at 11.1 million in 2011. that's compared to the peak of 12 million in 2007. researchers say the weak economy in the united states is what's causing the decline. >>> busy signals, dropped calls, all too familiar afor instances for people -- aannounces for people who use 911. but one congressman is blaming verizon wireless for the problems. >> jerry connolly described a subpar 911 system run by verizon. now he wants the federal communications system to help fix it. ken molestina tells us how. >> i guess i would give it a d. >> reporter: virginia congressman jerry connolly is slamming verizon wireless. they're contracted to route 911 calls throughout much of the washington area. according to him, they've fallen short. >> the whole purpose of having 911 is when you need it, it works. >> reporter: he cites recent weather events that have knocked out the systems as examples of where they've failed. during the 2010-2011 winter, several storms interrupted 911 service. more recently this summer's derecho did the same thing. >> the catastrophic failure that occurred at the time of the derecho is not a

but also what it would do to his second term in office given the damage it would do to the united states economy. >> how do you respond to those who say we don't have enough time to reform the tax code before the end of the year? what specifically are you looking for from the president for an agreement to avert the fiscal cliff? >> well, i've said repeatedly and i think most of my colleagues have said as well, and i'll say again, on the entitlement reforms that are needed to save medicare and social security, we know what they are. doesn't require any more study. it just requires the courage to do it. tax reform obviously can't be done between now and the end of the year. i believe we have a bipartisan view that after 25 years it's time far tax reform again but that's going to take a while. what the president is trying to achieve on the top two tax rates, you know, he can get by doing nothing. the law is stacked in his favor. the point that we've all made repeatedly is that you can't solve this problem. we now have a debt the size of our economy, you can't solve america's problem. you can't leav

we cannot allow our economy to be held hostage again to the whims of an ideological agenda. it's -- we are the united states of america. we are the greatest economy on earth. we pay our bills, we always have. if congress wants to reduce spending, that should be part of the negotiations. that go into making digs about how we spend -- the programs we spend money on. and the president is very interested in reducing spending an reducing our deficit but you don't default on the economy. that is -- we saw -- we saw what happened in 2011. and it's unacceptable. >> disease did the president have a chance to speak to any republicans last night at the reception here about the fiscal cliff? >> the president and first lady met with scores and scores of lawmakers last night, as is the norm in a situation like this, but i'm not going to read out individual conversations. >> speaker boehner was not one of them? >> it was reported that speaker boehner was not part of the receiving line but the president has conversations with speaker boehner with some regularity and looks forward to speaking with him again. >> last questio

united states is one of budget deal away from being a great country. and there are a lot of people in business who think we are poised to do some really good things in the global economy, the united states is. but if we cannot untangle this mess, it is not going to happen. >> you know more about the inner workings of our government than any living person. every single administration of our lifetime, you have been behind the scenes. you have seen national security notes. >> off what nonsense you are talking. [laughter] >> are you now optimistic or pessimistic about the way the australian minister posed the question. >> you know, in the end i think things will be fixed. the question is, when and what price it do you pay on that road to getting it fixed? i do not think that you govern by playing chicken. i say that to democrats, republicans, the white house, but congress. they should sit down and really talk this out. the old joe biden way when he would deal with mitch mcconnell just a couple of years ago. extend the bush tax cuts in the white house they called by in the mcconnell-whisper. in the horse whisperer, one for you, one for me. that is hard. that is the way you

lou: i hear chris saying just because you reek devastation as president of the united states on your economyt mean you don't love your country. [laughter] >> well said, very well said. >> that's exactly what he was intending to say. [laughter] >> look, i mean, it's an interesting position right now for the president. if you look at the president's argument, i mean, it is effect of what he's saying. we talked about this before, but, remember, the president argued twice raising taxes in time of economic struggle is bad for the economy. he was clear about this. he laid out the argument, and in some detail. you don't raise taxes when the economy's struggling. we were growing at a clip of 5.6% of gdp growth, and today, it's less than 2%, and he's making the saim argument. lou: thank you. great to have you here. more on the cliff, stalled negotiations, and, of course, ever-lasting hope straight ahead. syria and the fiscal cliff. they share two things in common. they are subjects of an obama ultimate may tum and -- ultimatum and the a-team tonight. >> three, two, one! [cheers and applause] lou: sta

1993 when we had just come off the largest deficit in the history of the united states, the country was in doldrums, the economy was just plugging along, not doing very well, just had a weak recovery from a deep recession. and we passed a plan to get the country back on track. we did it the old fashioned way. we made tough decisions, some that were unpopular, but it was the right thing to do and it worked. we balanced the budget, we had the longest period of uninterrupted economic growth in the nation's history, 23 million jobs were created, and we were actually paying down the debt of the united states at the end of the clinton administration. and we did it again when disaster struck my state in 1997, one of the worst disasters ever in north dakota, a 500-year flood that followed the worst winter storm in 50 years, many of you may recall the images from that disaster when firemen were fighting an enormous conflagration in downtown grand forks in the middle of a blizzard, and a massive flood. grand forks was devastated. again, we had a plan, a $500 million disaster recovery plan that became a billion-dollar pla