Sept. 8 - Economic Policy Institute's Josh Bivens reacts to U.S. President Barack Obama's speech on the economy in Ohio.
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President Obama that it not everything his administration acted in the past years has worked. As quickly as he had hoped for the US economy. Now the president wants congress to pass a plan that will allow businesses to write up a 100% in investment in new plant and equipment. Josh Evans of the Economic Policy Institute joins us from DC suggest you listen to the speech. What do you think we think it's gonna work. I think backcourt. The -- Tax breaks for for business investment. Isn't gonna do much I think adding that kind of investment tax credit as a really inefficient way to create jobs. And you look at the economic environment out there is just hard to see the case. It's sort of the cost of new investment is what's holding the economy back interest rates are rock bottom lows. Corporations are sitting on mountains of cash they can use to -- to do new investments that they thought it's worthwhile. So I think tax breaks for new investment they consistently score pretty badly is economic stimulus I think that it -- badly this time as well. Pocket at tax -- he talked about the bush -- tax breaks for the wealthy and heat up pretty firmly saying that I you know let Nobel those are not going to be sentenced and it and it's interesting because. We heard from Peter Orszag and not bad I saying let's -- him for two more years so if the president coming out strong on that. As a negotiating. Point do you think he really means business on. that tough to tell I think he absolutely wants to do away with -- high end tax cuts and that this policy preference I chair I really think it there unjustifiable. I'm I hope B stands firm to -- I think that the argument that. Somehow you'll hurt any incipient recovery by raising taxes on very very rich people and it just doesn't allow water. So what we fewer let's say your favorite part of what he had to say today what do you think would actually come to help us lower the unemployment rate which is what you wanna see happen. That's right I mean I think that the best part. We'll one I think talking about sort of that that economic mismanagement of the two thousands and trying to draw a contrast -- with starting new direction it that was dead. More specifically I think that that part of his plan calls for more infrastructure spending and it's good for long term growth I think it's really good in creating jobs in the short term. The only disappointing thing is. Is the size of the proposed infrastructure package fifty million dollars will help it will create some jobs. It would not go near far enough to really drive that nine point 6% unemployment rate sharply down. On to drive that night. I'm point 6% unemployment rate sharply down. What do we need to do you what do you think that we need to hear from the president and that's politically -- and that it would anybody outlets and everybody just run screaming at around. I think you give -- sort of hit the nail on the head right there with the problem facing what we need is something like. Another recovery act something that focuses hundreds of millions of dollars on. Safety net expansions unemployment insurance subsidies firfer cobra health insurance -- its stance. Eight state local governments to keep them from having jobs. And and much more infrastructure spending had been 59 dollar call for. It's obviously not politically viable today or tomorrow I mean it's why people like me insane the past year you need to lay the groundwork for this says. If we don't do something bold like at. Work could well be looking at -- on the planet right nine point 6% easily a year from now maybe on the planet rates over 9% for even heading into that -- twelfth presidential election. We're for a long period of very high unemployment unless we take aggressive measures. So maybe it -- not aggressive enough for you but for some people it's pretty interesting listening to a democratic president saying all these things about private sector growth. And do you think that he's going to be able says. I get and other Republicans come along with as leaning politically they're probably not gonna go as aggressive as you want them to do but you think we're gonna have something middle of the road. Before the mid term actions. I'd be shocked it is before the mid term election I mean especially about fifty billion dollar infrastructure. Ethnicity everything that the Republicans are against at this point in time. So for the mid term I think not and frankly. Nothing's gonna help the economy for the mid term there's nothing we can work fast enough. This really has to be now -- debate about how to get jobs back over the next two to three years to the mid term election for for good -- bad. Nothing's gonna move that -- on the economy before then. right well thanks for helping at that with this that debate that's -- is an economist with the Economic Policy Institute in Washington DC. I'm Jen Rogers this is Reuters.
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