Stockman: Not a Snowball's Chance of Gov't Surplus

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Feb. 13 (Bloomberg) -- Former OMB Director David Stockman discusses the U.S. budget deficits on Bloomberg Television's "Bloomberg Surveillance." (Source: Bloomberg)

Better economy echo class there is not a snowballs chance that will happen.

Look at the forecast cbo put out yesterday.

A trillion of deficits over the next 10 years, we go back into trillion dollar deficits by 2018 or 19. that assumes there is never any recession again for the rest of time.

It assumes the economy accelerates 3.5% growth.

But with the recent improvements, can even david stockman be a bit optimistic?

Class i cannot possibly.

That is already built into a forecast.

The deficit ever drops below half $1 billion five, 6, 7 years into a business cycle recovery.

It goes south again.

$500 million is a massive -- it is a total defeat.

It is only a matter of the recent bias by which we think a mere half trillion dollar deficit is not a problem.

It was a problem seven years into a business cycle recovery, which is exactly what this forecast.

If you go back to the 60's, when they first came to town, -- you are brutal.

Wait a minute.

Even then, they believed only the cycle you should bounce the budget, and when the economy got way into full employment what happened to even means?

Why have we become so accepting of deficits?

Because the fed has enabled it.

We now have 17 trillion national debt.

The cost on that is about 250 a year unless or about the same as it was in 206 when our national debt was six or seven jillion dollars.

What they have done is driven the interest rates down to the rock bottom.

They have taught washington the deficit -- a benefit for the secretary of treasury, certainly.

It has.

But i have spent time down there and i was there in the 1970's when we had double digits.

The only thing that will cause condor -- congress to act is fear.

When interest rates are at rock bottom, there is no fear.

Spoke to charlie rose about the u.s. economy and why the u.s. will not be able to pull it ahead and here's what he said.

The u.s. cannot grow at a rate fast enough to pull the whole world along.

The difference between three percent and three point five percent makes a world of difference in the united states, but not enough to make up for losing one percent in europe or china or japan.

You have to look at major parts of the world economy and say, what could they do to grow more?

We have been clear in europe, we think countries that have surpluses could do more to stimulate growth and demand.

Europe needs to man.

The world needs more demand.

The full interview with the treasury secretary, see it this evening on bloomberg television.

David, you hear the secretary with the company line, you have got to give democrats credit.

Why do budgets narrow with democrats and not republicans?

This is an accident of timing.

What you just heard was clueless ritual incantation.

The world economy has gotten dangerous time bombs planted everywhere as a result of zero interest rates in the money markets.

I will quiz you on this.

How do you explain three and four percent gdp growth at the end of 2013? vectors all moving in the right direction.

A peaceful transformation from bernanke to yellen.

I understand long-term fears, but the recent thing has been very optimistic.

I do not think so at all.

Most of that was inventory accumulation.

If you look at final sales in the fourth quarter, 1.9% over prior year.

Final sales in the last quarter of 2012, 2 .5% over prior year.

We have not accelerated all of this short-term inventory.

I have got a get this in.

Everyone else in the republican party is running for president in 2016. are you considering a primary run?

They are getting so desperate.

What is it about your party echo where is the front runner?

The party is divided between social conservatives who are irrelevant and talking about things the public does not want to hear, and economic conservatives who have been defeated and the trade by the leadership.

The move last week did not take a punt on the debt ceiling.

The final straw.

It is something we will continue to examine.

It will be a big theme in the midterm election year.

We want to get through our agenda.

Mine is the weather.

I have had it with the storm.

It is the winter.

Get used to it.

I rue up in the fields of western new york.

It is partly february.

Enough of this.

We have got a lot of storms and

This text has been automatically generated. It may not be 100% accurate.

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