Sept 22 - Chairman of the Council of Economic Advisers Austan Goolsbee sits down with Reuters Insider following his appearance at the 2010 Reuters Washington Summit.
credit for small businesses and invest in infrastructure to spur the economy. Austan Goolsbee chairman of the Council of Economic Advisers joins net joins us now Reuters Washington summit Austin thanks for coming -- it means from the president and it's overwhelmingly. We start for in a very deep hole and what we need to do is get to growth rate higher get people back to work. And I don't see that that freefall from turning into a depression. But this is a very deep hole we've got to get out of that hole before people goes start saying let's cancel all of these. great points and David thanks very much begged for having an understatement Austan Goolsbee chairman of the white house Council of Economic Advisers. I'm Simon Kenya and this is Reuters. The White House is pushing to make middle class tax cuts permanent -- access to credit for small businesses and invest in infrastructure to spur the economy. Austan Goolsbee chairman of the Council of Economic Advisers joins net joins us now Reuters Washington summit Austin thanks for coming -- it means you'll need -- my pleasure. We think you'll you'll -- in the Joe. Larry Summers is leaving too it's a chance for a sort of fresh blood fresh ideas and in the president's economic team do you see. Continuity. Do you see a slight change of direction. -- it's a question of sending the message of data getting across to the American people -- and a. You know what I would say about that is that main. Policy message and focus of the administration comes from the president and it's overwhelmingly. We start for in a very deep hole and what we need to do is get to growth rate higher get people back to work. And I don't see that changing at all and so they can. Whoever comes and goes out I if I anticipate very much of the presence unidentified people who. Who aspire to stick on this same course right. I mean there's been some criticism of the president's record. -- with the business community that is relations with the business community haven't been as good as they perhaps could -- G again when you see further outreach to the business community is being something that you will be listening a bit most of their concern well. I would say it it is not -- anybody that says we don't listen to the business community that is not accurate and I believe that the president will continue. Together ideas from business. As well as from all of the parts of the economy were very open any ideas. That work. I think you saw you know in the most recent set of policies the president's been -- outlining. Such as let's expand credit to small business give tax rate to small business. Let's expense investments so that companies can write off capital equipment and if they build factories in this country or make in the R&D tax credit permanent. As well was. Education and training initiatives the president is on their -- number of things that I think there's a bit of a common ground that I think a lot in the business community. Are gonna find that very appealing in those policies. And I think look if you start in the deepest recession in our lifetimes. There's going to be dissatisfaction. On a lot of people's parts. For some time until we get fully out of that hole and I think you that that's reflected in the business community -- as well as other parts of the community. That. You know it's it's a long tough road to get out of mind of a recession like that. It's it's always hard to be pushing. We know from the from the international evidence that fiscal crises. -- financial crises. And have a negative impact on the fiscal position of the government. And lead to long. Saying that we're trying to get out from under but all we can do is just keep plugging away and at night and I anticipate that. Whoever comes and is is gonna view this time. But you'll still in the phase of trying to stimulate the economy. Even if those measures cost money even if they they might push on the deficit a -- in the short time that's still kind of way that the policy is being left. I wouldn't say it in some general sense like that I think what the presidency and it is. As long ago as last December. Is. If there are targeted policies that would help job creation -- would help attract investment in this country. He's open to evaluating those anyone's that he thinks will work. That he would do goes and I think you've seen that. Kind of eclectic mix of what what we should look at. In a healthy way so they pass a lay off prevention. For teachers and firefighters and police. I think that was most most analysts view that that was a major source of potential job loss in the country and we at least help alleviate dad. Over the summary see the president proposing. Let's give tax relief and and extra credit. Cheap access to credit to small businesses. Because normally small business is an engine for getting out of a recession. Not a drag on the economy. What's happened now is banks are more dependent on bank. Small business more dependent on bank credit. Then the rest of the of the business directory is and so financial consolidation. Has left small business. Gasping for air a little bit. And some of these focus on investment. They do cost some money but they are of the form. Cutting taxes. Giving incentives for this for the private sector to stand up they're not really about. Direct government stimulus. Of that. Shall we the deficit commission coming to report in December with the elections coming up and then there's going to be a lot of focus off to the elections in in -- in 2011. On spending right that that's going to be a big focus. It people are gonna be saying let's cut spending now we need to address it now. Okay look we should put and the president has called many times for putting. A and it increased emphasis on our medium and long run. Fiscal position. The problems we face in the medium and long run. Have not gotten notably worse in the last two years they are rooted in the aging of the population in the United States and the acceleration of health care costs. And we need to think through those issues and we need to think broadly. About are medium run fiscal circumstance. That she is totally different than what is the deficit this year when we're struggling. With the worst recession in our lifetimes. It's clear. That when the economy is as bad the deficit is going to have to really get much larger. That's why before the president ever set foot in office in January of 2009. The Congressional Budget Office sends over a forecast and says. Guess what folks the deficits going to be one point three trillion dollars and blow the roof off the biggest deficit that has ever existed. It's because all the economic analysts do. That if the GDP was going to be as deep as it was -- deepest and our lifetimes the impact on the short run fiscal situation. Was also be worse than answers to tighten the belt in the medium to long and -- didn't yes exactly you don't. If you go try to tighten the belt right now. I think you would have spook markets in -- substantial way because. They recognize as this. Recovery act money is going down. We need to make sure that the private sector has stood up. Before we start pulling the plug on everything else and make no doubt about it the private sector had come to a complete halt. In the fall of oh wait beginning vote. The economy was on the edge of freefall. And we -- we were able that the government with the Fed to prevent that freefall from turning into a depression. But this is a very deep hole we've got to get out of that hole before people goes start saying let's cancel all of these. All of these programs -- as a great points and David thanks very much begged for having an understatement Austan Goolsbee chairman of the white house Council of Economic Advisers. I'm Simon Kenya and this is Reuters.