CAVUTO: Do you believe, to issues more at home, Governor, the issue with the mortgage problems that are building in the country, that something stronger than what the president proposed is in order, maybe an outright bailout, as some of your opponents on the other side of the aisle have recommended?
ROMNEY: No, there are a number of elements that are associated with the subprime mortgage market. Those investors who bought these as investments are going to lose their money in some cases, and that's the way it ought to be. You take a high risk and in some cases it pays off and sometimes it doesn't.
Homeowners, however, I feel very differently about. And the president is going to provide to the FHA the ability of some of these homeowners to refinance their mortgages at more stable rates. And that's a good thing.
And then you're seeing the Federal Reserve take the action necessary to provide more liquidity in the market, so that the credit crunch in the subprime mortgage market doesn't spread too severely throughout our economy.
Clearly, we want businesses to be able to get the debt they need to build working capital and to build capital expenditure projects and so forth.
So, it's important the Federal Reserve provide that liquidity. But I think you're going to see that kind of action taken appropriately.
CAVUTO: All right. When you say that kind of action, would that include the Federal Reserve lowering interest rates, that now is the time, that they're risking something worse if they don't?
ROMNEY: Well, I'm probably not going to tell the Federal Reserve what they ought to do. But — but I think the action they already took with regards to providing lower rates was a good move.
I think, if they continue to provide additional liquidity in the many ways they have to do so, that will keep the subprime mortgage credit crunch from affecting a greater part of the economy. And lower rates is one way to do that.
CAVUTO: You were — a lot of people don't know that you were a very successful businessman in your past, a very wealthy one at that — MBA and then — so, I would like you to use those skills looking ahead to November `08, by which time many economists think that we will be in a recession.
Do you share that view?
ROMNEY: There's no particular reason in our economy right now that we should have a recession. There are, from time to times, going to be discontinuities, like this subprime mortgage market discontinuity, but this doesn't call for a recession in the nation.
CAVUTO: As you know, we have gone a long time since the last recession, and numbers really say that you can't go that long before, even in the cyclical nature of things, we dip.
If that were to be the case, that would make any Republican's effort to hang on to the White House darn tough, wouldn't it?
ROMNEY: You know, I'm sure that, if — if there were a recession, people would be looking for a person who understands how the economy works, who understands how you create jobs, who understands how we can be more competitive with China and India. And a guy who's spent his life in the private sector is going to know that a lot better than people who have been in politics all their life.
CAVUTO: All right — Mitt Romney.
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