Steve Liesman: Government Spending Has Kept the Economy on the Downside


CHUCK TODD: Very quickly. I want both Steves on this question. Is government holding back economic growth, pure and simple?

STEVE PEARLSTEIN: I would say in the short-term, not really.  If the deficit problem isn’t solved, then the long-term it will. But i don’t think it’s a big big factor right now.

STEVE LIESMAN: I think it’s a huge factor. I  think if you look at one of the main reasons why this recovery has been lackluster, at least a percentage point has been the result of if you put in all federal and state and local spending cuts in this expansion compared to others on the backside of recoveries, government spending has kept the economy on the downside. We had one year of big spending from the stimulus, and the other years were contractions. So yeah, government is holding back the recovery of the economy. We’re hoping to do 2% growth without the government.