A group of economists surveyed by the Wall Street Journal predict that the probability of another recession occurring within the next four years is nearly 60%. Former Microsoft Chief Operating Officer Bob Herbold joined the FOX Business Network to weigh in on this finding.
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“I tend to agree that the probability is pretty high that that might occur,” he said. “But the economists say that it’s going to occur because it’s time for a recession, which seems like a shallow reason.”
Herbold believes that the government’s inability to handle tough issues has negatively impacted the economic recovery.
“We’ve been talking about entitlements for 10 years,” he said. “The trust level of the government is down from like 75% it was in the 60s; now it’s like in the teens and dropping. If you look, productivity is at an all-time low at a half a percent. If you look at household income, it’s off versus 10 years ago by 2% in constant dollars which is amazing."
The former Microsoft executive said the Federal Reserve is acting more like “a political animal than a sensible economic entity.” He also chimed in on the central bank’s interest rate policy.
“The policy of keeping interest rates so low has put the squeeze on the middle class big time,” Herbold said. “It has put the squeeze on a lot of organizations. They borrowed a lot of money but they’re not doing anything with it because of the fear of what the heck is going on. So we really have a major mess on our hands.”
In order to fix the difficulties the country is facing, Herbold thinks something “dramatic” needs to happen.
“We need a Constitutional Convention or something. Where’s Ben Franklin when we need him? We have some serious problems to deal with and we don’t have the mechanism to deal with them. It’s a frightening situation and that’s why the trust level is so low right now in the country.”