about a few weeks ago that would be more likely to garner bipartisan support and actually get done? >> the problem the president is facing republicans have said no to basically everything so far. i think they will agree to certain provisions, certain tax cuts in the president's plan but it's going to be like pulling teeth for the president. when i said republicans want a lousy economy on election day, i certainly didn't want to paint with too broad a brush. it's not every republican. but undoubtedly the just say no policies of the republican party do tend to lead one to believe that a lot of republicans wouldn't mind a bad economy on election day because that is almost a sure way to get rid of president obama. >> there is a danger, though, with that. if this economy, which is shaky right now, takes another turn, another clear turn down ward shall the next president of the united states, if it is not barack obama, is going to have a worse situation that they inhair ilt that they might not be able to get out as easily. >> that is true. but presidents, generally speaking, like to have a very bad economy at the beginning of their four years or their eight years, because that usually means, given the business cycle by the time their four years are up, the economy is much better. we may have a new normal. that is after the great recession, it may be unemployment is going to stay up at 9 or 10% for a very long time. that's absolutely right. it is a great danger politically but also a huge danger to the economy and to our society, because i don't think that is sustainable socially. >> all right, robert. hang on. peter is a professor at the university of maryland school of business. economists surveyed by bloomberg believe president obama's jobs plan not only reduce unemployment but keep the u.s. from sliding into a recession in 2012. first of all, do you believe that? because if you do, that would be something we should all support. >> i don't know how many jobs it will create. it certainly will create some providing states with additional money to pay for school teachers while you subtract money on the health care side, trim medicaid or medicare in some way to pay for it, doesn't help a great deal. where we really have a difference of opinion between the two parties is whether spending more will get us out or whether taming the budget deficit will get us out. the republicans were elected last time to tame the budget deficit. they see what the president is proposing is something that -- >> let me ask this. you're right. you're absolutely right. that's what they got elected on. that doesn't mean that's the answer. >> absolutely not. cutting the deficit right now would not be good medicine for the economy. if they want to move forward, though, i think they will have to look outside the government for real stimulus. the president's program may provide some. to really get the economy moving, they have to find a way to get to private sector spending. for example, opening up more oil and gas that provides the same spending construction does. >> bob, let me ask you this. most economists, smart people agree, raising taxes right now will not ideal but that taxes will have to be raised, not only on the rich but possibly on the middle class down the road. maybe stimulus is not a bad idea right now. cutting deficits and budgets are going to be a better idea down the road. why is that not a normal part of the discourse coming from moderate republicans and moderate democrats? why are we having discussions on the extremes, particularly on the republican side? >> one problem, ali, we don't have many moderate republicans. not that many moderate democrats. certainly more moderate democrats than moderate republicans. if we had a normal political dialogue right now, politicians would certainly be in sync with economists and policy analysts would say don't cut the deficit. spend more. don't impose taxes. later on impose the deficit and taxes. it's a sequencing, right now growth and jobs. >> good point. a sequencing thing. good to see you. bob reich former labor secretary, california of berkeley and author of "aftershock." peter, stay there. i want to bring diane swonk into the conversation. she is the chief economist at mesereau financial. what do you see at the biggest roadblock? we like to blame washington but there is only so much influential the government has over the economy. what's really holding us back? >> we have over a trillion reasons to stimulate on corporate balance sheets. we just validated for not using, redeploying funds they have been hoarding in august and september because of the political gridlock and political malfunction we've seen. although i don't think government is the only solution, it can certainly help on the margin one direction or the other. when your economy is only growing marginally and a crisis of confidence it can play a major role. in the larger debate, stimulus versus austerity, if we had a credible plan where we had vision going forward on what the deficit and austerity program would look like over 10 to 15 years, credible plan, knew what potholes were, businesses can do that as long as they knew where they were, changes in spending coming, so could households, that would free up in the near term some room for stimulus debate we're talking about. the rush to cut and offset any spending increase or any tax cut immediately with spending cuts immediately with spending cuts is really dysfunctional. the gridlock in washington is having a much outsized effect because the economy is so marginal. >> the work needs to be done to fix this economy outside of washington in the private sector. the idea there is a road map, there is some destination and some agreement as to how to get there is the thing that is going to help businesses make those decisions to employ people. ultimately the gridlock you're saying, diane, is a large part of the problem. peter morici. what's the logical fix to that? >> the fact of the matter is we're going to see marginal action on the president's plan. even the democrats in the senate are putting it off. my feeling is there will be a package. it won't be nearly as comprehensive as the president likes. a basic problem we have is when the republicans win, they think they should get everything their way and the democrats think they should obstruct. when the democrats win, they think they should get everything their way and republicans think they should obstruct. the reality is folks want government. americans are moderate. they want things in the middle. until politicians are willing to do this, we're going to have this seesawing in elections. that's all there is to it and we're going to be a country divided. there are real solutions getting the private sector going. we haven't had a clear vision from the white house how to do it beyond stimulus. frankly on the republican side, cutting taxes and deregulating doesn't warm me up. >> we're going to talk about solutions. diane and peter, stick around. the solution we need is unemployment. we're going to talk solutions when we come back. you're watching "your $$$$$." so here's five bucks to help you buy v8 juice. five bucks. that's a lot of green. go to v8juice.com for coupons. you can count on us. hey, jessica, jerry neumann with a policy question. jerry, how are you doing? 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[ male announcer ] get to a better state. state farm. i promised you we'd talk solution s, let's talk solutions. tax reform, do we need tax reform for economic growth and subsequently job creation. senator pat toomey, republican member of congress, he's on the super committee and charged with reducing deficits. he thinks tax reform is the answer. listen. >> this the most pro growth thing we can do is fundamentally reform our tax code. >> peter morici, is he right? >> it's important. the corporate tax is too high in the united states. there are too many loopholes. a lower corporate rate with fewer exclusions and loopholes would be beneficial. america fundamentally is held back by a lack of demand, due to credit overhang from the housing crisis and debt people have and trade deficit and so forth. those are largely problems that need fixing in the private sector that requires public initiative to get there. i'm not hearing that from the white house. frankly i'm not hearing a lot of that from the republican candidates as well. >> diane, this is going to become a catchphrase for many, many months. we've heard it about comprehensive tax reform. as peter says american corporate taxes are high. a lot of americans believe that some companies don't pay taxes. on behalf a lot don't pay taxes, we have loopholes. corporate tax could mean different things to different people. we know the president wants to expand the payroll tax cut which he says is going to save the average american family about $1500 a year. now, from an economists perspective, how direct is the link between tax cuts like that one, or others, and job creation? >> well, the issue on the payroll tax cut is if you don't extend it, it would be a payroll tax increase for americans at a fragile time for the u.s. economy. it is one of the things that would affect demand issues. the problem with tax cuts we're not sure how many americans at the wealthiest level would save or restructure debt and spend. the demand issues peter is referring to i think are important. i do believe in fundamental tax reform. i think we need to dramatically change behavior, lower tax rates, broaden base, do changes to corporate tax rate as well. that's not the single issue, i agree on that. the biggest issue, you cannot move forward on the economy until we heal from the fundamental thing that got us here, the housing market bubble and bust. >> that's sometime away. >> it is. but there is some opportunity for changes in policy that can help accelerate our process through that that we're not doing at all. >> let's talk about this for a second. federal reserve chairman ben bernanke referred to unemployment as a national crisis this week. peter, would you say this is the time for infrastructure projects? what's the kind of stuff we should be doing if it's not fundamental tax reform to get things going? >> well, infrastructure projects are a bridge to the future. they give you a temporary boost in employment. to get us going, we need to do something about the debt people have. we have helped out the banks. we need to start to restructure these mortgages, writing down debt by perhaps making the banks partners in the house where people are underwater so they can refinance. we really do need to develop more domestic energy. it's great to develop alternative vehicles, electric vehicles and all that but they are not going to solve energy dependence right away. we have a lot of oil and gas. we're using oil and gas we need to develop that now. a trade deficit with china. the issue of regulation on wall street. we've added to the cost but i don't think we've solved the problem. there's got to be a more effective and efficient way. >> ultimately as you and diane both point out, sure, there's things holding businesses back, creating uncertainty and not permitting them to hire. the other side of that equation as you just eluded to, diane, is demand. the $1500 that president obama says the tax cut -- the payroll tax cut is going to give people, ultimately we need something that is going to cause people to say i need to pay down my household debt, get my debt situation under control and spend enough to create demand. what's that sweet spot? >> there is no -- we've been saying this for ages. if it was a silver bullet, it would have been shot. we're still working through this process. i do think peter makes an important point about changes, what we could do to move forward, correction in housing. foreclosure. we've not changed foreclosure laws yet. this is a major problem in the united states. i think they take your first child in sweden if you don't make your payment on your mortgage. that's an exaggeration, of course. the reality is we don't have the kind of recourse here. we have to change the incentive structure, heal and do it productively. i also agree regulations thrown without a lot of thought behind them, we have not consolidated regulatory agencies. there's going to be a huge surge in s.e.c. filings for hedge funds. they are not staffed for that. i hardly see anyone spending money to have s.e.c. be the hirer of last resort, increased funding from hedge funds, regulatory issues they have to deal with there. we've got a lot of things that are just mismatched in the economy. we need to think more holistically about the consequences. >> think holistically about the consequences. that's not exactly what i think about when i think about what congress is up to these days. >> congress doesn't do that. >> one of these days we'll have you two making decisions. that will help us a lot. >> diane swonk and peter morici, good to see both of you. some people think is a solution, can chris christie save the republican party and american economy? 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"new york times" columnist. chris christie has fiscal conservative directions, socially relatively moderate. he doesn't wear his religion on his sleeve. used to be pro-choice, flip-flopped when his wife was pregnant, for civil unions, for gay people, against gay marriage. he's got no foreign policy experience. is this economy so bad budget slashing and deficit reduction is the kind of stuff that trumps everything else? >> it may well be. we're in a process right now where the country is basically coming to the conclusion, urged on by the tea party and most conservative elements in the republican party that the thing that matters most deficit reduction, cutting government spending and reforming entitlements. whether they are right or wrong, it has become the preeminent issue with the possible exception of jobs. here you have a generally blunt spoken governor who has done that in his home state without fear or favor. the fight as always in a presidential election is for the independents. independents turned against obama largely. they are looking for a candidate. they are not going to find rick perry appealing, certainly not michele bachmann. they could well find chris christie appealing. >> moreso than romney? >> well, romney is the default candidate. they are looking for somebody else to fall in love with. romney has been a while. people don't feel like they are going to fall in love with him. they are going to grudgingly accept him as their nominee, if it comes to that. but in the meantime -- >> they are worried about chris christie being in the race, should they be worried and start to appeal to moderate independents who barack obama used to appeal to? >> yeah, look, i think one of the things that's interesting about chris christie, in addition to the things joe was saying, if you listen to the speech he gave this week at the reagan library, he talked about solving problems, you know. he said, look, we solved problems in new jersey that haven't been solved in washington. that's a practical message. not a conservative message, practical message. don't forget one other quick thing about him. he represents a blue state. if republicans can win in a place like new jersey, they can win anywhere. >> he did bring that point up, joe. he said in new jersey we have made divided government work, because so many americans think the whole concept of divided government is one that can't work. what we used to think of as fantastic about checks and balances seems to be coming back and biting us in the ankles. >> americans right now find the idea of a pragmatist appealing because that is not what's happening in washington today. the question whether chris christie could go to washington and be a pragmatist just as obama thought he could go to washington and bridge the partisan gap certainly remains to be seen. running a state, creating consensus in a state, in a state where every state by law has to balance their budget, a very different ball game. by the way, i think chris christie is doing t