shut down. it's slowing things down here in america. last month america lost 15,000 manufacturing jobs. there's only so much washington can do about that storm, but with some real work, they could help avert the storm that's being created in the nation's capit capitol. that second storm started a year ago when the president and congress made a deal with the devil. find a deal to cut the deficit or subject america to a scorched earth policy of reckless, across the board budget cuts. it's called sequestration, a stupid name for an equally stupid idea. a trillion dollars of mandatory spending cuts that may shed a million jobs when we need them most, and right now nothing is more important to our country than creating jobs. but there's more. a series of mandatory tax hikes that will hit us all, working class and wealthy alike, will all pay more after january 1st if congress doesn't act soon. but congress won't act now before the election because that would mean bipartisanship and compromise, two things that don't seem to get votes these days. even the chronically understated ben bernanke keeps warning congress it has to deal with unemployment. this week the good ship qe3, it's not a ship, but the third round of quantitative easing, yet another counter-intuitive phrase for the unwashed masses. so america, you could get pushed over that fiscal cliff that i think will wreak havoc on the economy. steven, you would rather cut off your toe than increase america's debt, so why should we be putting that off until after the storm? >> lacook, ali, i have to say i frustrated with this discussion because the fiscal storm you're talking about, the economic storm, you're right. it's here. i think a lot of americans think it never left from 2008. but look, at some point you have to pay the piper, and what frustrates me, ali, is when we discussed this three or four years ago, you were all in favor of the big $830 billion stimulus bill -- >> yep. >> -- and these other programs, and what you're essentially saying now, ali, is who ever thought this would happen? we have to pay the piper. this always happens, and it seems to me what you're saying is let's continue to borrow, let's continue to have what ben bernanke wants, which is easier money, and i don't think that works anymore. i do think we have to get serious about bringing this spending problem down. you don't tell somebody with a personal financial problem who has enormous debts, i'll just put it off for another year. it seems to me that's what your advice is to the congressman and the president. put it off for another year, let's keep borrowing, let's have another drink. >> you'll be interested to know i actually think the fed action disguises what they should do. it gives them a little cover. we agree on that. lights bring austin gillespie in. he's in the white house with president obama. you are part of the administration that's been accused of not using its full political capital to create jobs when it had the chance. how do you respond to that criticism? >> i don't think that's fair. that's coming at the president from the left, and you just heard steven saying he wished they hadn't done anything. i think though it may not have any implication for the election in 2012, historians are going to look back and avoiding the great depression in twa2009 is going be viewed as a huge accomplishment. the economic crisis in 2008 was bigger than the one in 1929 which led us to the first finan bigger share of the economy now than it was then. >> i'm so scared looking forward. we have to figure out in washington how we can fix the right now and look longer term to cutting our debts and deficits. why can't we do both? even more, why can't we do both at the same time? i'm not convinced that washington and party politics will allow us to do -- we have to be juggling a lot of balls. it can't just be debt reduction, and it can't just be near term stimul stimulus. it has to be all of that and more. >> look, christine, i agree with you that it would be wonderful if we could do both. if we could stimulate the economy and then have these congressmen and senators turn into fiscal saints and cut the spending. i've been in this town for 30 years. >> i'm sorry. >> all i ever hear is put out the punchbowl and let's party. they never take the punchbowl away and that's the problem i have with what the three of you are saying. look, i think americans believe this debt is a real financial crisis, that this is not a fire drill, this is a really important component as to why the economy is doing so well. and austin, i'm not saying we shouldn't have done anything in 2008 and 2009. you're right, the president inherited a great economic crisis. the crisis we have now is here we are three and a half years later. the census bureau just came out with numbers this week that were a disaster. in connection with are still falling, the poverty rate is at a record high. the poverty ir ussues we put in place just didn't work out. >> we agree the poverty is a problem, so you should recognize in saying you're afraid of the fiscal cliff, steven, your contradicting your own point by saying, well, i'm really nervous that if they raise taxes and cut spending at a time like this, it's going to tank the economy. i think if you want to try to blame policy, then you have to explain why is it that in europe, in japan and in the rest of the advanced world where they're following different policies than what they followed in the u.s., they're actually growing slower than they are here? the u.s. is among the fastest growing of all the countries in the advanced world. ali, i think you're 100% right. this is a tidal wave that's sweeping the world economy as the tough struggle to get out of. i'm not advocating just 100% short run stimulus. in my view the main role of the government as the main driver of recovery should not be a permanent basis. that is absolutely not the sustainable way to do it. that was the thing you have to do when the private sector is in freefall, but at a time like this, we should be doing everything we can to encourage exports, investment and return to the private sector. going back to tax cuts makes it worse. >> and i was absolutely right, so christine, go ahead. >> ali didn't hear anything after you're absolutely right, ali. the issue here is we've got so many problems in the near term and we can't even agree on -- basically all they can agree on is running the government for the next six months, right? and there's also these mistakes that both parties have made and i don't see anybody owning up to their mistakes. early on, i don't think anybody really knew how deep the economic crisis was. and that's not a knock on the administration, because i don't think republicans knew how deep the economic crisis was, too. high marks in the early part of the crisis, but after that, it seemed to get a plan through just evaporated. now we're spending all this time looking backward. we've lost this ability to look forward together. >> i believe it was last week where we both agreed you are not as obsessed with debt as some of your republican colleagues are. i'm using that word, it's absolutely a dangerous and misguided obsession. it's a serious problem. jobs should be where the obsession should be, creation of jobs. >> here's the point. first of all, austin, i agree with you. i think the tax agreement is a disaster. you put it right, we've got an investment program in this country, an export problem in this country. why would you want to raise it on investment? it's president obama who wants to raise the capital gains tax, the dividend tax. i'm against that. if i thought spending another trillion dollars in debt would get us out of this rut, i would agree with it. i think it's the wrong thing to do. i think spending in this economy is making the economy weaker. >> steven, good to see you, as always. austin, stay right where you are, christine, stay where you are. i've told you that the economy can create 40 million jobs in the next two years. i'll wear a dress for a week. later, it's some of the largest projects in u.s. history, the new york city subway, and you're footing the bill no matter where you live. i'll tell you why products like this could scrap the economy. there are a lot of warning lights and sounds vying for your attention. so we invented a warning you can feel. introducing the all-new cadillac xts. available with a patented safety alert seat. when there's danger you might not see, you're warned by a pulse in the seat. it's technology you won't find in a mercedes e-class. the all-new cadillac xts has arrived, and it's bringing the future forward. nothing complicated about a pair of 10 inch hose clamp pliers. you know what's complicated? shipping. shipping's complicated. not really. with priority mail flat rate boxes from the postal service shipping's easy. if it fits, it ships anywhere in the country for a low flat rate. that's not complicated. no. come on. how about... a handshake. alright. priority mail flat rate boxes. starting at just $5.15. only from the postal service. wouldn't it be nice if there was an easier, less-expensive option than using a traditional lawyer? well, legalzoom came up with a better way. we took the best of the old and combined it with modern technology. together you get quality services on your terms, with total customer support. legalzoom documents have been accepted in all 50 states, and they're backed by a 100% satisfaction guarantee. so go to legalzoom.com today and see for yourself. it's law that just makes sense. the most important election issue this year is jobs, but you could end up basing your vote on a lie. it all started with the romney camp claiming that president romney would create 12 million jobs in his first four years as president. that's 3 million a year or an avr average of 250,000 jobs a month. i asked romney advisers how they came up with that number. they had big answers about economic growth and tax reform. instead of calling out the romney campaign for making claims which scanned evidence, the obama administration repeated it, calling it a low bar. if it's such a low bar, why didn't the obama campaign come out with it first? both sides have made a cynical calculation, telling you an optimistic view of the economy is more important than telling you the truth. 12 million jobs in four years has happened in america before, twice in the last 15 years. they added 12 million jobs between 1983 and 1987 when ronald reagan was president. the average growth in those four years was 9%. and with president clinton, the economy was growing at 4.3% each year. next year, if we're lucky and a storm doesn't hit and we don't go over a fiscal cliff and nothing else goes wrong with china or europe, maybe we'll hit 3%. that's optimistic. nowhere near where we were the last two times that america created 4 million jobs in three years or 250,000 jobs per month. the former chairman of the council of economic advisers and a professor at the university of chicago boots school of business. austin, you have a chance right now to call out the biggest lie in this campaign. please tell my viewers that they will not be seeing me in a dress, which is what i promised if 12 million jobs were created in four years. they won't see that, because this economy is not going to allow for 12 million jobs in the next four years. >> ali, i learned a long time ago not to make forecasts because i would look dumb. the private sector in even the last two years which has been, as you say, modest growth has added something like 4 million jobs over two years. so it would have to speed up but it wouldn't have to speed up to something unbelievable to do that. >> let's bring in a guy who has made the forecast, actually. moody's analytical chief analyst mark zandi written the book "paying the price" on a new job obsession which is optimistic that we'll create new jobs. i'm big on optimism, we don't see enough of it. the national budget office predicts the economy will create 9.6 million jobs in the next four years. that is higher than what we've seen in the last 12 years. you are on the side of this idea of 12 million jobs in the next four years regardless of who becomes president. and you make an interesting observation, that housing is going to drive it. >> i think you should start shopping for that dress, ali. i think it's very doable we hit 12 million. austin is right, over the past year we created -- and the year before that we created 2 million jobs in each of those years, and it's obviously in a very tough economy and it's in a period where government is laying off lots of workers, and that's not going to continue for four years. a year or two down the road, the government is going to stop laying off and start hiring again. so that will add a little bit of juice. the real kicker is the housing and construction cycle. as you know, coming out of the recession in the post world war ii period, it's the housing and construction that provides the real boost where a lot of the jobs come from. it's not happened this go-around because housing was ground zero for our problems, but housing has already started to kick in, and in two years, there will be a lot of construction jobs. transportation, distribution, landscaping, home depot lowe's, you can go on and on and on, and that's going to give you the added jobs to get you to that 12 million number. so it's very, very doable. >> austin, one of the things we looked at when we look at this silver lining around some of the economic clouds, we know markets are doing well and a particular housing sector we know is doing well, as mark said, but you can get a 30-year loan for 3.8% and home affordability is at the lowest it's been. people still don't have jobs. how is that going to solve this problem? >> well, look, if the mechanism that mark described kicks in, that we finally turn the corner and we kind of plow through these 5 million vacant homes that got overbuilt in a bubble, normally the job creation, as mark highlighted, is up to a third of the typical expansion coming out of a recession is coming from either construction or housing-related stuff. so i think you could start seeing some jobs from that, and look, you could start seeing the jobs coming from an increase in investment and increasing shift to exports. the fundamental problem of why it's taking so long to get out of this downturn is we can't go back to doing what we were doing right before the recession began. normally in the v shape recoveries, like 1983-'84, you go right back to doing what you did before. what we were doing before was overbuilding housing and consuming more than we were earning, and you can't go back to that. >> mark, you say, and clearly you've said this because you made this prediction, that this doesn't depend on who becomes president. >> right. right. it doesn't. i mean, the key working assumption, and you've been talking about it all morning, is that we're able to reasonably gracefully navigate through the fiscal issues we'll have to struggle with after the election. the fiscal cliff, the treasury debt ceiling, we'll have to come up with spending, tax revenue increases that allows us to get close to some kind of fiscal stability. my view is regardless of who wins the election, the policymakers are going to come together because it's in their interest and the economy's interest, and they're going to reasonably, gracefully address these issues. it's going to be tricky, and i'm not saying we'll create a lot of next in the next 12 months, but once we get past these issues, and i think we will this time next year, and particularly in 2014 to 2016, the economy will be in full swing. and the private sector, if you look at businesses, the american companies, if you look at american banks, if you look at american house holds. we still have issues with foreclosures, but outside of that, the private sector is in very good financial shape. the only missing ingredient is confidence, and we're going to get that confidence back if we nail down these fiscal issues, and i think we will. >> you boys are optimists. thank you both for being with us. if i do end up wearing that dress in four years, it will be very different than a shirt and tie. up next, are central banks saving the world or makesing things worse? we'll get ron paul's look at the federal reserve, an institution that he calls dishonest and immoral. their very first word was... 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[ yawning sound ] ♪ home of the brave. ♪ it's where fear goes unwelcomed... ♪ and certain men... find a way to rise above. this is the land of giants. ♪ guts. glory. ram. this week the federal reserve announced quantitative easing, bond purchases every month meant to give banks the ability to lend more to people in the united states. italy and spain, two big countries considered too big to fail in the ongoing eurozone crisis could get bailout funds going forward to bring down their borrowing costs. both are instances of central banks initiating action when the political will to act is lacking, whether in washington or in europe's capital. joining me now to debate the tactics is rich quest. richard, welcome. today's q and a question is are central banks saving the world or are they making things worse? i'll go first, richard. give me 60 seconds on the clock starting now. richard, central banks are doing the right thing by taking action to shore up our troubled economies, but it is only half the equation. there is a world financial crisis like the one we witnessed four years ago when lehman brothers collapsed. two things need to be done. number one, central banks need to step in with emergency fiscal moves. two, make smart political decisions and that is what's lacking in the united states and in europe's capitals. america today is not in a crisis but it is facing this upcoming economic storm that you people are blowing our way by taking crisis style emergency action this week like the fed did. it showed that the real problem ailing america today is a complete lack of political will and leadership. in other words, the fed provided cover for washington's useless politicians. so can central bank save the world? yes, and this is a big but, they can't do it alone. you need the right plig decisions as well, and in washington, richard, our politicians have advocated their responsibility to uphold the public good. richard, your turn. >> well, one is never surprised with your views, and here we go. the core question, save or suffer? are the central banks doing what is necessary to prevent a bad situation becoming worse? and the answer is yes, and for one very simple reason. they are the only game in town. you're right, ali, up to a point. the u.s. congress has abrogated its responsibilities. in europe, the country's government, they know what they want to do, they just can't get reelected if they do it, and they can't agree. so in this scenario, it is only -- only -- only the central banks that can really make progress. but, and here's the difference between the fed and the ecb. what price do those central banks exact? in the ecb's case they've got economic reform, they get commitments, they make sure they only buy the bonds after they've got promises. as for the feds -- they're printing money without any promises or reforms to show for it. >> that was a minute and 15 seconds, but nonetheless you make a strong argument. you've heard from me, you've heard from richard, now you'll hear from this man. >> i would give the federal reserve a very, very low grade. i don't know if it's an f or f-minus, but it's very, very bad. >> congress won't help but congressman ron paul certainly isn't turning to t