Hefty fiscal spending and loose monetary policy are slowing what should be a faster recovery from the Great Recession, says former GOP presidential candidate and Forbes Magazine Publisher Steve Forbes.
"Every past recession has had initially a sharp bounce back. We didn't get it this time because of the huge headwinds," Forbes tells CNBC.
"Where do you get the money for this stimulus spending? You suck it out of the economy, put it through the political sausage factory, spit it out again and that's supposed to be stimulus. It did not work for us in the 1930s, it has not worked for Japan in the past 20 years. Instead we should be focused on removing barriers."
In the early 1980s, high inflation and later high interest rates rocked the economy, although it recovered and prospered for the remainder of the decade.
In the 1930s, during the Great Depression, the economy was showing signs of recovery until a fresh round of government regulations dashed growth.
History is due to repeat itself.
"There's a huge certainty coming with massive new regulations on healthcare," Forbes says.
"You have massive new regulations coming on the financial industry, which is not only creating uncertainty but killing small and medium-sized banks. You have tax uncertainty. And you have the big spending and the weak dollar. That's a formula for stagnation if there ever is one."
Roger Altman, chairman of Evercore Partners and former Deputy Treasury Secretary under Bill Clinton, disagrees, pointing out stimulus packages were needed. Otherwise, the economy would find itself worse off than it is today.
In fact, more stimulus is needed today, even as lawmakers push through spending cuts in return for lifting the government's $14.3 trillion debt ceiling to avoid an Aug. 2 default.
"I myself would like to see them attach to the front end of that one last round of stimulus, and in particular, I'd like to send them extend the three stimulus measures that came out of the lame duck Congressional session last year, namely the payroll tax cut, the business expensing provision and an extension of emergency unemployment benefits," Altman says, also on CNBC.
"So you would have a big round of deficit reduction and you'd have one more kick to the economy on the very front end of that through one year extension of those three measures."
Stimulus measures attached with longer-term spending cuts will make it easier to shave $2 trillion from government deficits going forward, Altman says.
"I think the prospects for a serious agreement, say $2 trillion over 10 years — that's $2 trillion of deficit reduction, which would solve about half of the problem — are pretty good."
Vice President Joe Biden has said both Democrats and Republicans must accept tradeoffs if the country is to narrow its deficits.
Democrats must accept changes to federal healthcare programs and domestic agency budgets if Republicans are going to accept cuts to military spending and other measures.
"The really tough stuff that's left are the big ticket items and philosophical big ticket items. Anything having to do with health care," Biden says, according to the Associated Press.
"And I don't mean major Medicare reform, but just changes in health care policy."
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