'This Week' Transcript: David Axelrod

This is a serious plan. The parts of the plan that are the major parts -- payroll tax relief, infrastructure, unemployment compensation with reform -- these are things that have been supported on both sides of the aisle historically, a real plan that comes with bipartisan support. It's a tragedy if that plan does not pass, because it's -- it's a serious effort evaluated to have a real effect.

KARL: But even Mark Zandi, who seems to be the White House's favorite economist...

TYSON: He's not -- but he's not the only one.

KARL: ... who worked for John McCain -- has suggested that, yes, it would have an impact in the short run, but not in the long term, that it would be a drag on the economy in the long run.

TYSON: The point is, next year without it -- you have to think about next year, 2012. Next year, because of what's already in the books, the government will be taking out of the economy nearly 2 percentage points. The economy is on -- is on the brink of recession, the -- a double-dip recession. The probability of recession, a wide group of economists think it's about 30 percent. If we don't do something for next year, government policy will actually increase the odds that we go into recession, increase the odds.

AMANPOUR: So let me ask you, George, because, you know, business leaders are getting very worried, including people who are Democratic-leaning, like Mort Zuckerman, who had an op-ed in the Wall Street Journal this weekend, basically saying that he and his business leader colleagues and friends are beginning to think that this government's policies are failing in this regard. What do you see if -- I mean, what do you see happening, for instance, next year, this time next year in this regard?

WILL: A political convulsion if we start a recession, start a recession at 9.1 percent unemployment, 16.5 either unemployed, partially employed, or too discouraged to seek employment, 22 percent of mortgage-holders underwater at this point. I mean, it's astonishing place to start a recession.

I think there's one potential plank, if you can call it that, of Occupy Wall Street that's about to go mainstream, and that's debt repudiation. You see it now from some of the mainstream economists. These are the same geniuses, by the way, who said if we pass the stimulus, we would have unemployment at 8 percent or less. And that is (inaudible) mainstream economists say we need just a bit of inflation, in a narrow band, 4 percent to 6 percent, just for a little while.

Now, behind this fatal conceit that they can control inflation, have just a little bit of it with a thermostat to turn it up or down, inflation is debt repudiation. It's just a civilized and surreptitious way to get out from under debt. And here you have them -- the big number that -- that Occupy Wall Street is preoccupied with is $1 trillion in student loan debt.

AMANPOUR: You talk about a social convulsion. Well, it's kind of already sort of starting in Wall Street and around the world. What's the single biggest problem, Laura, clouding the jobs picture? I mean, you've been quoted as saying, there are a lot of jobs, but there are not the skills to match the jobs.

TYSON: Well, I think you have to be careful of that. I do agree that there's a skills mismatch, but I also think the predominant problem for unemployment right now is a lack of spending. It's the lack of demand.

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