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Politicians Disagree Over Economic Fix

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Politicians Disagree Over Economic Fix

Economy

Politicians Disagree Over Economic Fix

Politicians Disagree Over Economic Fix

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  • <iframe src="https://www.npr.org/player/embed/129768337/129749934" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Heading into the midterm elections, the economy continues to be the big political issue. President Obama and House Republican Leader John Boehner have offered dueling remedies. David Wessel of The Wall Street Journal talks to Steve Inskeep about the plans to get the economy moving again.

LINDA WERTHEIMER, Host:

It's MORNING EDITION from NPR News. Renee Montagne is in Afghanistan. We'll hear the first of her reports next week. I'm Linda Wertheimer.

STEVE INSKEEP, Host:

The most terrifying month of the financial crisis is now two years behind us.

WERTHEIMER: In September 2008, the Lehman Brothers investment bank failed and Americans contemplated the chances that the economy would collapse.

INSKEEP: Two years later, recovery has begun but it's slowing down; that's the opinion of Republicans criticizing the Bush administration.

WERTHEIMER: It's also the view of liberal economist Robert Reich. He compares the economy to a tortoise trying to get out of a deep ravine, who's just begun to scale the wall when he gets tired and goes to sleep.

INSKEEP: David, good morning once again.

DAVID WESSEL: Good morning, Steve.

INSKEEP: Do policymakers agree on what, if anything, is wrong here?

WESSEL: No. They...

(SOUNDBITE OF LAUGHTER)

INSKEEP: Okay. Thanks very much, David. That's all we wanted to know.

(SOUNDBITE OF LAUGHTER)

INSKEEP: No. No. Please, go on.

WESSEL: They agree - almost everybody agrees that the economy is unfortunately slowing down, the recovery running out of steam prematurely, with still so many workers without jobs. Some people think the problem is that President Obama administered the wrong medicine and they want different medicine; that's pretty much the Republican view. And others, particularly among liberal Democrats, think he just didn't administer enough medicine. And if only had enough gumption, he could more stimulus into the economy, more medicine - another dose - and things would get better.

INSKEEP: So what are the options now?

WESSEL: John Boehner, who's the closest thing to a Republican leader at the moment, as the minority leader of the House, has what he calls a two-part plan; which is cuts spending to fiscal 2008 levels, protecting security spending, and extend the Bush tax cuts. And he says that'll get things going again.

INSKEEP: So both sides are talking about some form of tax cuts, but what else besides that?

WESSEL: And it's not clear that either side has enough of votes to get their things through. So the most likely scenario is, nothing happens until the election. Maybe if the economy continues to deteriorate, something happens in a lame duck session.

INSKEEP: David Wessel, I want to make sure I understand what you're telling me here. Because you said stimulus is now a dirty word. Stimulus, of course, is what was used to refer to the giant bill that was passed at the beginning of the Obama administration; a combination of tax cuts and increased spending - deficit spending by the government to spur on the economy. You're saying nobody wants to say stimulus anymore, but people are still talking about deficit spending, tax cuts and so forth?

WESSEL: That's right. The stimulus has become a word, I think because many Americans think we had this big dose of fiscal stimulus and we still have a lousy economy, so it didn't work. So the president's economists - many of whom would like to do more stimulus - are trying to find other ways to describe what amounts to much the same thing. They call it what's good for long-term growth with a short-term kick, or something like that.

INSKEEP: Ah, which is a little more awkward than just saying stimulus, I suppose.

WESSEL: Well, they're not in the business of making language less awkward, Steve.

(SOUNDBITE OF LAUGHTER)

INSKEEP: No, not at all. Well, if Congress is going to be struggling to do anything in this situation, can the Federal Reserve do anything?

WESSEL: David, always a pleasure to talk with you.

WESSEL: You're welcome.

INSKEEP: That's David Wessel, economics editor of The Wall Street Journal.

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