'This Week' Transcript: Economy Panel

SHELBY: Well, I believe that stimulus basically doesn't work, for the most part. We've tried that. I think what we've got to do is create the conditions, tax reform, which we could do and we haven't, incentives for manufacturing. We've lost millions of jobs in manufacturing. And say this a new day. We've got to do it. We've got to be buoyant about where we're going. We've got to grow this economy. The market grows the economy. Government -- we've grown the government, but we haven't grown the economy, and we better be mindful of that.

AMANPOUR: You're shaking your head. You know, obviously, the debate right now is about how much government intervention. Even people who don't want to see government intervene say that sometimes that's what a government has to do in an emergency.

REICH: Look, Christiane, I really -- I deeply respect the senator and the senator's position, but it's just sheer logic. When consumers and private-sector investors are pulling in because there is not enough economic activity, because consumers are scared, because consumers are 70 percent of the economy, then government has got to fill the gap. I mean, we've done this for the last 75 years.

KARL: But look what we've tried. I mean, look what the administration's tried. We've done $800-plus billion in economic stimulus. We've done tax cuts, the big, you know, tax cuts passed in December. And the Fed has kept interest rates at virtually nothing.

REICH: Yes, but there's...

KARL: And there aren't many tools left.

REICH: Look it, the scale of the crisis was much larger than anybody anticipated. This was the worst since the Great Depression. Exempt the first $20,000 of income from payroll taxes for the next year. Redo the bankruptcy code so people can declare bankruptcy on their primary residence and, therefore, have enormous bargaining leverage with their lenders if they are trouble. Have a WPA, a direct employment program.

KARL: But do you really think a new spending plan is going to pass muster in Congress? I mean...


AMANPOUR: It won't politically, will it?

SHELBY: First of all, no -- I don't believe any new stimulus is going to pass in Congress. I don't think it has any credibility. We have seen what the past stimulus did, for the most part. What we need to do is create some certainty, some conditions for people to invest, to grow, to have some confidence. There's not a lot of confidence in the economy right now all over America.

AMANPOUR: Can I just talk about this idea of jobs, which is the all-important one? You just heard Donna Brazile and Peggy Noonan arguing about whether there had been economic growth and whether jobs were being created. And Donna was saying for the last 15 months there has been. And I asked Austan Goolsbee on this program last week about the jobless recovery that some economists are talking about, and he got very angry. This is what he said.


GOOLSBEE: It is not a jobless recovery. That is an incorrect phrase. After the last recession, in this comparable period, post-recession, we had lost 100,000 jobs. We've added more than 2 million jobs. There's a major difference between a jobless recovery and a very deep hole that we're climbing our way out of. And that is what -- the position we're in.


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