Question: Is China a bubble?
think the Chinese government is realizing that the economy is
overheating. So, I think they will take proactive steps to slow it down.
The last quarter I understand the growths are running at rates of 12% a
year GDP. And two, I think the Chinese government is seriously
considering whether they should firm the Chinese currency because of
international pressure, but also because the economy is heating up too
much in terms of flow through exports. Question: What
does the U.S. need to do to maintain its status as the leading economy?
: One is very obviously, which every economist will tell you
it’s got to fix its problem of the fiscal deficit. It’s getting out of
control. Two, I think the American consumer must learn to live within
his or her means. You cannot have a society where you spend more than
you earn. I mean, it’s just fundamentally not viable in the long run. I
think the corrective steps which are taking place now should lead in the
I think one is that the American consumer is
learning to save. Right? The savings which were running negative now are
running between 4% and 5%. Insofar as the fiscal deficit is concerned, I
think the President and his team are addressing issues which are
economic to see to it that they contain the fiscal deficit and the
President is making tough decisions, which is why he is getting
unpopular with some of the commercial leadership.
Recorded on May 7, 2010
Interviewed by Victoria Brown