Will 'back-to-school' bring economy back to life?


Economy Slowing Down With the Presidential Race Heating Up

Charles Payne: You know, they are tied but Mitt is starting to come on strong in the money category and that often tells you something. When Obama started raising more money than Hilary people were like "What?" "How?"-and of course he went on to win. Listen, I think that the American public is starting to get it, the president has more or less said it is not my fault-it is Bush's fault, it's the Tsunami's fault, it is the European recession, did you know that Tom Cruise and Katie Holmes broke up? Every excuse under the sun, and the American public isn't buying it anymore.

Ben Stein: I studied economics for a lot of years at good universities. I had no idea that Tom Cruise had an effect on the economy-I really want to thank Charles for that. I think it is a very close race and I don't think Romney is a particularly exciting candidate but people are disgusted with the fact that Mr. Obama promised so much and has delivered nothing. Nothing!

Julian Epstein: No and I don't think that the normal practice of the challenger getting the undecided's is going to occur this time. If you look at the poll of polls, if you look at the New York Times poll, if you look at what Nate Silver has done-Nate Silver was right in 48 out of 50 states in the 2008 election-most of the political professionals still handicap this race for Obama. If you look at the Electoral College, Obama has about 247 votes and Romney about 191. There is a much better electoral path to victory for Obama if you look at states like Ohio or Florida, Nevada, Colorado-Obama either was ahead or continues to be ahead in most of those states-There is a much easier path. In addition as you pointed out Neil-Gallop has them even today even though the other polls have Obama ahead. Gallop has him even today and the likeability factor which the pollsters have started looking at and Obama's advantage on things like likeability, people believe that will have about a 1-2 percent impact potentially.

Charlie Gasparino: What they also care about is what happened Friday. 1.5 percent GDP growth. Look at the battleground states as Julian mentioned-Obama seems to be marginally... I will tell you the one statistic he is losing big on is economic growth and unemployment. I don't know if you can win a re-election-and Julian knows more about this stuff than me-with 1 percent economic growth. That is a huge hill to go up.

Dagen McDowell: It is also tricky for Gov. Romney because you would think that with the economy as lousy as it is, whether you are talking about gas prices or economic growth or housing market-a very volatile stock market-you would think he would be in better shape but many people suggest that Mitt Romney is keeping his powder dry. Whether it is his actual money that he has saved to spend on ads later-that he is saving his message on the economy is more effective the closer we get to the convention and then the election. He needs to define himself and stop the Obama campaign from defining him, which is some of what we have seen.

CBO: $4 Billion in New Taxes for Employers Under Health Care Law

Charles Payne: Well I think it's going to be a lot more than that. The bottom line is that a CBO over the past few years have been manipulated so much that I just hate to say this, but they have lost a lot of credibility....This Obamacare thing is going to specifically destroy these small businesses and small business job creators. You know what? Their is just no way around it. We all know it, everyone said it and they meant it. So you can play around with the numbers but we know these numbers are going to be a lot worse when the time comes. I just think everyone realizes that.

Ben Stein: I think that the whole Obama numbers on healthcare were a fraud from day one. They are not going to get the savings they expected and much more importantly, the big, bug chuck of savings they were expecting was by raising taxes on upper income people. That wasn't going to be a saving in medical cost, it was just going to take more money out of the pockets of the job creators and apply it to medical cost. Their was never any big savings or bending of the cost curve-it was just taxing the well to do more. It was that simple.

Dagen McDowell: I promise you that there are so many taxes hidden in this bill that people are going to be waking up for years to come saying "Were getting hit with that? I'm getting hit with that?" Whether it is even the mandate tax which is going to hit the majority of people making less than $120,000 a year. How about the medical devices tax-it is more than 2 percent. It may be raising more than $20 billion, but do you know who that hits? Smaller businesses with narrow profit margins that are the innovators in this country-and don't tell me that is not going to hurt innovation.

Charlie Gasparino: I will say this-the biggest follies of healthcare is that for marginal savings-forget about whether it is real or not-how much are the CBO's? $84 billion in savings. We have imploded 16 percent of the economy. The federal budget-correct me if I am wrong -- I think it is $3.5 trillion -- it is huge. Savings over ten years of over $84 billion on that type of a budget is nothing. It is nothing. You have imploded 16 percent of the economy for nothing.

Julian Epstein: Well, let's just put some facts on the table. 97 percent of small businesses are exempt from the small business law. Of the 3 percent who are not exempt 91 percent of them already provide health insurance. For the small business, we are talking about this small group of people. Of the small number of people who this will actually change the situation for, they get a 50 percent tax credit for providing health insurance. The CBO- which conservatives and republicans love to cite-is saying that the premiums for small businesses will go down from 4 percent to 11 percent when you include the small business credits.

New Concerns About Sluggish Back to School Shopping Season

Dagen McDowell: Gasoline prices have been going back up, so I think that might put a wet blanket on back to school sales. They are up 11 cents a gallon just in the past month...If gas prices go up, people change their behavior. I will say back to school is mandatory spending for many parents and may not be the best gauge for the economy.

Charles Payne: You know, I want to reference what Charlie mentioned earlier-the GDP report. Consumer spending dropped dramatically and savings went back up. I think the American public understands that something is not right. People on main street know these things long before the people in the ivory towers on Wall Street and they are a little nervous. To Dagen's point, they are going to get the basics but they may not get that super-duper thing you were looking for.

Charlie Gasparino: I think this will bail out the president in the battleground states. Just kidding! Julian-this is why he is in trouble.

Julian Epstein: You know, I agree with Charlie. The most important figure here is the GDP numbers. When Obama took office we were at negative 9 we are now at positive 2. We have been averaging about 1.5-if you survey the retailers, the retailers do expect a big back to school.

Ben Stein: I expect there will be a big back to school boom but has their ever been a big economic crisis overcome by big back to school spending? And this will not be the first one.