'Supercommittee' Failure's Effect on the Economy

Trish Reagan discusses the economic impact of the failure to make deficit cuts.
2:32 | 11/22/11

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Transcript for 'Supercommittee' Failure's Effect on the Economy
Now let's give a more let's have a committee's failure means the economy. When her -- financial journalist Trish Regan thanks for coming in with again this morning we saw the market's fall in advance of the -- yesterday that the most immediate. Economic impact could come from this failure to extend the payroll tax cuts and unemployment benefits right which is obviously bad news for an economy that's aren't even very fragile state. Clinton appeared deficit hawk you're saying this is great because this is gonna end the extension of the bush tax cuts it's -- mean that you're gonna have all these deficit reduction. But on the other hand you can ask isn't the right time should we be making these moves in time when the economy is in such a fragile state. Right and that that is for as -- said a lot of the deficit hawks a silver lining here is that the cuts com. No matter what and the -- -- that the tax cuts for the wealthy expire at -- here if congress does nothing so the burden really shifts. The deficit goes down if congress doesn't act right but you know keep in mind that -- -- really nervous about this entire situation because they're saying to themselves regardless of what happens in 2000. Thirteen this is more evidence more proof. -- in fact there's a disconnect in Washington and that it's not functioning as it should that there is a break down everything has become so partisan. And he stated himself and especially they're looking at the context of Europe Britain and think -- himself. Just exactly how when we didn't get back on track to attack this issue at the time the very clearly necessary to do -- in looking at right I mean that's a great example of a breakdown in the political system. As a result of economic stress I doubt it it certainly looks like not -- despite the president's hope. I did not much is gonna happen before the election that this is really going to be determined in many ways by the voters exactly and that's really who it's -- to be up to which also makes investors very nervous because they're saying this is more uncertainty George. They're not certain what's gonna happen and don't forget -- mean you and I in August for reporting on -- Downgrade of US debt and for working in the packed crowd is -- but one of the interesting things yesterday is that all the ratings agencies including us and he said it will knock -- down previous anymore because those automatic cuts are still there isn't taxed place. True but it points and once again to political dysfunction and we've seen what has meant for Europe. And so the question is could eventually mean the same for the US our investors can eventually say you know what. We don't trust the US because we don't trust their political system we're not at that stage yet. Right now the best game in town that is -- is that it's tough shape. But could it eventually get there and that's -- investors and voters in the same place congress at its lowest -- -- -- history. It's very much.

This transcript has been automatically generated and may not be 100% accurate.

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