'This Week' Transcript: Karzai, Khan and Levitt

REICH: Well, Christiane, it's not the summer of recovery. It's the summer of our discontent. We are, by many measures, heading into a double-dip. But the fact is, many Americans have not even gotten out of the first dip. And the interesting paradox here is that in this town, in Washington, you can't talk about a second stimulus. You can't even talk about stimulus, because people say, oh, that would create a deficit and that would generate inflation. But in fact, the bond markets are not predicting inflation. The bond markets are worried more about deflation. The treasury bill is now -- the yield is what, something like 2.6 percent on a ten-year treasury bill.

WILL: Let's talk about how bad it is, first of all. If, in the last five months, about 1.1 million people had not become so discouraged just to essentially have dropped out of the job market, the real unemployment rate today, if they were still counted, would be 10.4 percent. So too much use of the word Nazi, too much use of the word Herbert Hoover, my friend. You're the one who's constantly saying that the town today is full of people like Herbert Hoover, who don't want to spend money.

REICH: Herbert Hoover is being exhumed, George.

WILL: Let me tell you, Bob, per-capital federal expenditures between 1929 when the stock market crashed and '32, when Hoover had his last full year in office, doubled. He was -- he responded to the coming recession with a gusher of federal spending. It didn't do a lick of good.

REICH: By the way, we can debate history, but by 1932, 1933, the major issue and major proposal on the table coming from Andrew Mellon, his secretary of the treasury, was balancing the budget. And all we heard...

WILL: In Forbes Field in Pittsburgh, in a famous speech, FDR pledged to balance...

REICH: Yes, FDR was -- he was always a deficit hawk.


HUNT: No, I intend to say -- as they say in the House, I want to yield the balance of my time to the distinguished gentlemen.

There is no question that this economy is in terrible shape. J.P. Morgan the other day just revised their forecast for the next six months. Growth will be an anemic less than 2 percent.

We talk about this often in terms of the context of the midterm election. The die is cast. There's nothing you can do over the next ten weeks that will take effect and affect people's lives by November 2nd, and that is dreadful news for the Democrats.

AMANPOUR: What about for people? I mean, what are they going to be able to look at and get some hope from even after the elections?

WOODRUFF: It's tough, Christiane, because as Bob just said, the forecasts don't look good right now. The -- I guess it was the conference board economist said the other day, he doesn't think we're going into a double-dip recession, but at the very best, we're stuck in neutral and there's no movement people see.

So something has got to -- and today, Christiane, there was a report that people are pulling their money. Ordinary people pulling their money out of the stock market.

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