Roundtable II: iPhone Economy

George Will, Liz Cheney, Jonathan Karl, Wesley Clark, and Gwen Ifill.
3:00 | 09/16/12

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Transcript for Roundtable II: iPhone Economy
As you saw right there, lot of talk about the economic impact of the iphone 5 could boost $3.2 billion in the next quarter alone. The federal reserve is not relying on iphone. Embarked on a new round of bond buying. To help boost the economy. George, I'm just taking you a guess that you're not a big supporter of this. Quantitative easing, is the government printing money. Now, printing presses are 20th century, they do it digitally. Never mind. It's expanding the money supply. It's part of mission gallop, by becoming the fourth branch of government. Constrained by nothing as far as I can tell by exercising both monetary and fiscal policy. E interesting thing is this, it used to have one mandate. Protect the currency, prevent inflation. Then we added a second mandate, maximize employment. We have forgotten the first and concentrated solely on the second. To produce trickle-down economics. The whole point is to drive people out of bonds into riskier assets. Such as equitiequities. Great effect on the stock market, where the equities are owned by a tiny portion of americans. In the hope, that the wealth effect, as the stock market goes up, it will cause wealthy americans to spend and invest and the results, guess what, will trickle down to the rest of us. Banks have $1.5 trillion in reserves. Companies have $2 trillion of cash sitting on the sidelines. Who in america is not buying a house because of 30-year mortgage at 3.5% is too high? Who is not hiring workers because lending is too expensive now? Okay. It's an extraordinary move by the federal reserve to take this move. Economists will differ on whether it will have an effect on the economy. It will have an effect on capitol hill. You'll see a move to kind of clip the fed's wing, get back to the original purpose of controlling inflation. You hear a lot of talk about the fed on the hill but this gives impetus to doing something. I think the thing is, inflation is under control. Yes, there's a lot of money out there, it's not moving. Keeping interest rates low. We're giving opportunities for investments. In housing and other sectors. But it has to be coupled with other measures. The president his announced a new target, to get rid of half of our oil imports by 2020, that will keep that money inside the u.S. Economy, that's a big deal and it can be done. He has announced new manufacturing initiatives. We're bringing jobs back from overseas. And we need to move forward and do something about home mortgage foreclosures. We need some bipsan work on this. I remember debating karl rove in 2008 on this, and he was very firm that we weren't going to help people with mortgage problems. But I think we need some action on it. The fed printing money in order to pay for barack obama's debt. This country is facing a crisis that's totally unavoidable crisis, $16 trillion we hit during the democratic national convention, and the extent to which this president has shown absolutely no leadership to deal with, you have the fed stepping in, and you have another credit ratings agency in the last 24 hours, downgrading the united states of america. That has never happened before. We have had it happened twice. 30 seconds. Liz, brings it back to politics. You look at this completely through a political lens. Ben bernanke when heteps up and doesn't do something like this, oh, no, the markets go down. When ben bernanke does this, this is the way of getting the president elected. Nothing that he announced this week isn't going to make a difference in the next seven weeks. Something is being done. It's an economic argument. It does have a political impact because we're in the middle of a presidential campaign. But when the fed is printing money in order to buy debt. All right, it's an economic policy. The conversation will continue online. General clark and liz cheney will answer your questions on twitter. Just use the hash tag this week.

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

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