This is a rush transcript from "Hannity," August 25, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: And tonight, more bad news on the state of the American economy which comes as no surprise to anybody except members of the Obama administration.

Now according to the Labor Department, claims for state unemployment benefits rose by 5,000 last week, which brings the total number of Americans filing for state unemployment benefits to a whooping 417,000.

Now meanwhile, the national debt has skyrocketed $4 trillion on this president's watch. Now, that's something that the anointed one himself called unpatriotic when of course, it applied to George W. Bush back in 2008.

So, here to defend the Obama administration against these devastating economic realities, one of the architects of the president's economic policies, the former chairman of the Council of Economic Advisers. He just recently stepped down from that post. Austan Goolsbee is with us.

Sir, welcome to the program.

AUSTAN GOOLSBEE, FORMER OBAMA ECONOMIC ADVISER: Thank you, Sean.

HANNITY: I appreciate you being here. All right. Let me just start with the president, you know, saying repeatedly that the economy is recovering over a period of time. He said it again and again. Last summer was recovery summer. And let me roll the tape.

(BEGIN VIDEO CLIPS)

PRESIDENT BARACK OBAMA, JULY 29, 2010: The economy now is starting to stabilize and grow again.

OBAMA, AUGUST 17: The economy was predicted to be growing at about 3.5 percent.

OBAMA: The economy is now growing again.

OBAMA, AUGUST 15: The truth of the matter is, is that the agricultural sector in America, the cornerstone of states like Iowa, is doing very well.

(END VIDEO CLIPS)

HANNITY: Now, we've accumulated more debt than any president, a shorter period of time, under President Obama. The truth is, I have the latest Bureau of Labor Statistics, we've lost two-and-a-half million jobs since his stimulus, under Obama's plan. He said he would cut the debt in half. His administration said they would keep unemployment below eight percent. You were part of this. What went wrong?

GOOLSBEE: Well, respectfully, Sean, I would say, you are mixing up the timeframe there. In the year 2010, which is when most of the clips when the president was saying we were starting to grow again, we were growing. And over that 17 months, we added two-and-a-half million jobs.

Now, at the beginning of this year, we get earthquakes, tsunamis, revolutions in the Middle East, European financial crises. Now we got earthquakes outside of Washington, D.C. I mean, we've got a series of things that have put some heavy blows and slowed the economy back down again.

HANNITY: Well, hang on a second.

GOOLSBEE: I think it's a little -- I don't think you want to confuse something that is way down in --

(TALKING OVER EACH OTHER)

HANNITY: I read from the Bureau of Labor Statistics, the Bureau of Labor Statistics, President Barack Obama has lost 2.4 million jobs since his stimulus plan. That's the net result. He said he was going to create millions of jobs. He said he would cut the deficit in half. He said unemployment would stay below eight percent. Those were promises he made as a candidate, none of which came through.

Are you actually going to make the case that the Arab Spring and the Japanese earthquake had a more significant economic impact than say 9/11 on the economy or Katrina on the economy?

GOOLSBEE: The price of gas shooting up to $4 a gallon affected everybody...

HANNITY: Happened in the Bush years.

GOOLSBEE: -- in a very direct way. Excuse me?

HANNITY: Happened in the Bush years.

GOOLSBEE: It happened at the end of the Bush years. And then preceded the worst financial crisis in all of our lifetime. So, I don't know if that's necessarily the perfect example.

HANNITY: All right. Go ahead.

GOOLSBEE: So, we face a downturn where we lose a significant number of jobs, seven, eight, pushing up to nine million in the downturn. But let's not get into a thing where, you know, guy takes your TV up to the balcony, drops it off and says, oh, the last I saw it, it looked fine. I mean, when the president takes office, we are in the midst of what is now recognized as the worst down turn since we have had data in the 1940s.

HANNITY: But the president said, he -- the president said that before the election.

(TALKING OVER EACH OTHER)

GOOLSBEE: It's a slow slow struggle to get out of it. There's no question.

HANNITY: The president said this is the worst economy since the Great Depression. He knew what he was inheriting here. And it seems to me you blame Bush for a couple of years. He had both houses of Congress. To his credit he got his budget passed, he got his stimulus, he got his health care bill, he got the economy. He owns the economy according to David Plouffe and Debbie Wassermann Schultz. We are going to blame the tsunami, we're going to blame the Arab spring, we're going to blame George W. Bush?

Maybe should we stop, you know, blaming the fact that he spends more money than he takes in and he doesn't seem to understand how to unleash the economic free market.

GOOLSBEE: Whoa, whoa, whoa!

HANNITY: Whoa? $4 trillion in Obama debt.

GOOLSBEE: Before President Obama even became the president, when all we had were the Bush policies, the Congressional Budget Office said, we're going to have $1.3 trillion a year deficits based on just how the economy is doing. That was without any policies from President Obama.

HANNITY: $1 trillion stimulus.

GOOLSBEE: It's not fair.