The Dow Jones was down 400 points yesterday as stocks on Wall Street declined sharply. Gold prices also hit a new record high as fears of a double dip recession increased across the country.
With the state of the economy worsening, Bruce Bartlett, influential economist and former Treasury official under President George H.W. Bush, says that the only viable solution left is for the Federal Reserve to be more aggressive and pump more money into the economy to encourage spending.
"My feeling is that the basic problem of our economy right now is a lack of aggregate demand," he tells Christine Romans on American Morning today. "The best way to get the economy going would be through some kind of expansion of fiscal policy."
Bartlett also responds to Governor Rick Perry's comment that it would be "treasonous" for Federal Reserve Chairman Ben Bernanke to continue "printing money to play politics."
"Rick Perry is an idiot and I don't think anybody would disagree with that," Bartlett says. "The thing is, the politics of the Fed itself are really a more serious problem."