Economy headed towards recession?

Austan Goolsbee, former Economic Advisor to President Obama, on the state of the U.S. economy.

Austan Goolsbee: The Economy Has Been Slowing

By Economic Indicators

Austan Goolsbee, former Economic Advisor to President Obama, discussed the outlook for the U.S. economy with FOX Business Network’s Stuart Varney.

Continue Reading Below

Goolsbee addressed concerns about the slowing U.S. economy and the possibility of another recession.

“I don’t disagree with that on either count, I think we have been slowing and when I’ve been on your show before I’ve been saying I was worried about the Fed moving too quickly because the rest of the world’s borderline meltdown was going to have implications for the U.S. and meant we were likely to slow down.  You can’t rule out the possibility that we
would even go into a recession if they had a really hard landing in China and Europe deteriorated.”

Goolsbee responded to Varney’s argument that Republicans’ calls for tax cuts to stimulate the economy is a better solution than Democrats’ calls for more taxes and spending.

“Well it’s not that in spirit that you’re wrong, it’s that you’re mischaracterizing the positions of both sides in the policy-sphere. First, the Democrats are not for let’s just raise all taxes and spend money on nothing that’s important for growth and the Republicans have not proposed anything like the judicious pro-growth policies you are describing.

When Varney pointed out Reagan’s tax cuts and subsequent economic growth to support his view, Goolsbee said, “It was terrific growth, it was the second best in U.S. economic history following the first best which was under Clinton when they raised high-income tax rates.”

Continue Reading Below

Despite their opposing views on how to stimulate the economy Goolsbee proposed a plan.  

“What I want you to do Stuart is start looking around the world and you and I together plot how we are going to protect this country from the collapses in China and Europe.”