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Bob Scheiffer spoke with National Economic Council Director, Larry Summers today on Face the Nation. The two discussed President Obama’s economic plan, views on new taxes, if taxes will be increased or raised, as well as if the recession is over. The question regarding the end to the recession followed last week’s Newsweek cover that read “The Recession is Over. *Good Luck Surviving the Recovery” by Daniel Gross.
The cover even drew comments by President Obama during his live town hall in Raleigh, North Carolina last Wednesday, July 29, 2009. President Obama said, “"I don't know whether you've seen the latest cover of NEWSWEEK magazine on the rack at the grocery store, but the cover says, "The Recession Is Over!" I bet you found that news a little startling. I know I did. Here's what's true: we've stopped the free fall. The market is up and the financial system is no longer on the verge of collapse. We're losing jobs at half the rate we were when I took office six months ago ... So, we may be seeing the beginning of the end of the recession. But that's little comfort if you're one of the folks who have lost their job, and haven't found another ..."
Bob Schieffer asked the question directly to Larry Summers. “All right. The recession--is it over? I mean this cover of Newsweek magazine; it says “The recession is over.” But there’s a little asterisk that said “Good luck surviving the recovery.” Is the recession over? Has it bottomed out, Mr. Summers?”
Larry Summers responded by saying, “Most-- most forecasters are now looking at growth and output in the GDP over the second half of this year. They are looking for it because they see that inventories are way down and business is going to build them up because they see some increase in car and housing sales, becausethey know that the recovery act is going to gain force. But they also recognize, as we do, that it’s going to take time before gains in output--you will never get gains in employment without gains in output. But even as output increases it’s going to take time before the number of jobs starts-- starts to grow. So we can't be satisfied with where we are and the economy is not going to be back to normal for quite sometime. Our problems weren't made in a month or a year and they are not going to be fixed in a month or a year. But I come back to this--we used to be-- six months ago when the President took office we were talking about whether recession would become depression.”
Larry Summers continued by defending President Obama’s stimulus plan, “Today, we are talking about when recession is going to end. That is a tribute to the strength of the policies that have been put in place and the expectation that they're going to have a growing impact.”
Bob Schieffer interrupted, “So does that mean it’s bottomed out?”
Larry Summers replied, “Out? You know, you-- you-- you want to reduce these things to things that are very simple. Output is likely to start increasing. The number of jobs probably has not yet bottomed out because experience suggests that it lags. but we're certainly much closer to the point where it bottoms out than we were.”
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