Goolsbee: Americans have a role in recovery

By Jennifer Liberto, senior writer


WASHINGTON (CNNMoney.com) -- Americans can help the recovery along by saving more than in the past, but also by spending responsibly in proportion to income, one of President Obama's top economic advisers said Tuesday.

In a wide-ranging interview based on questions from CNNMoney.com readers, Council of Economic Advisers chairman Austan Goolsbee said the nation can't simply spend its way out of this economic downturn, adding "we need a different style of recovery."

He said a key part of that recovery comes from business investment in factories and equipment, getting credit to small businesses. But another key part of the recovery should come from families saving more and spending in a proportional way to their income.

"It would be presumptuous and wrong to encourage people to spend beyond their means," Goolsbee said in the discussion with CNNMoney.com Managing Editor Lex Haris. "But the rebuilding of higher saving coupled with consumption growth that's proportional to income growth is a model of a sustainable business."

Goolsbee also said he doesn't expect the administration to embrace another round of consumer-growth focused stimulus packages like the cash-for-clunkers vouchers program or the tax credit for first time home buyers. He said those programs were deployed at a time to "stop the freefall" in the private-sector economy, which has since stabilized.

"It's a tough slug, but we're not in the freefall, as we were in when the president first came to office and during those first five or six months," Goolsbee said, pointing out such policies come with costs and may not be the best remedy for the problems currently plaguing the economy.

When asked about what the administration is doing to attack unemployment, Goolsbee highlighted past policies such as stimulus, tax cuts and the recent new law that aims to help small businesses to get access to credit.

But Goolsbee added that the administration's current focus is on incentives for private industry to create new jobs, such as creating or extending tax breaks for companies that invest in equipment and new plants. He also wants to "correct aspects in the tax code" that give U.S. companies incentives to move jobs overseas.

He disagreed that the president focused so much on health care reform in late 2009 instead of on policies that would have spurred more job growth.

"The president has been absolutely non-stop focused on creating jobs," Goolsbee said. "But that doesn't mean that should be to the exclusion of everything else."

He added that access to affordable health care was a longstanding problem that needed to be corrected.

"I disagree with the premise that (the president) prioritized health care above jobs," Goolsbee said. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,810.06 91.06 0.51%
Nasdaq 4,712.97 11.10 0.24%
S&P 500 2,063.50 10.75 0.52%
Treasuries 2.32 -0.02 -0.86%
Data as of 3:49am ET
Company Price Change % Change
Bank of America Corp... 17.12 0.12 0.71%
Kinder Morgan Inc 39.75 -0.17 -0.43%
Apple Inc 116.47 0.16 0.14%
Intel Corp 35.59 -0.36 -1.00%
Microsoft Corp 47.98 -0.72 -1.48%
Data as of Nov 21

Sections

This arrangement, announced Friday, illustrates how the lines have blurred between traditional TV networks and newfangled options like Netflix. More

The Obama administration is touting that its immigration action will boost wages. But the hike amounts to only $170 a year by 2024. More

Obama doesn't have the authority to create a startup visa, but part of his reform announcement could include a workaround for entrepreneurs: 'parole status.' More

Nearly half of all Americans say there's a chance they'll have to work during a holiday between Thanksgiving and New Year's, according to a new poll. And one in four say they'll have to work whether they want to or not. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.