Show Coverage: U.S. economy slow to recover

The United States is in a slow recovery from the recession with a modest growth rate of 2% to 3%, according to two former White House economic advisors, speaking on Friday morning.

"The United States is no longer the engine of the global economy-China is," said Laura D'Andrea Tyson, Professor, global management, Haas School of Business and former economic advisor to President Clinton.

D'Andrea Tyson also said history suggests that the recovery will be slow and difficult with high unemployment for the next decade. Unemployment is currently at 9%, and there is a jobs gap of 12.1 million jobs that she says are "missing" from the market. In other words, 12.1 million jobs must be created to reach 2008 employment levels. She said she believes the gap will drag on for a decade if the national economy maintains its growth rate sustained over the past 10 years.

Investment has been strong, but it hasn't been across the board. Large companies are mostly investing in physical capital, and smaller companies are investing little if at all.

She said policymakers must address the jobs deficit, the fiscal deficit and the long-term-growth deficit. A revenue component is also needed.

The only way that federal healthcare spending can be contained is if the overall healthcare spending curve bends, she said.

"We want a deficit reduction plan, but not at the price of reduced access to care," D'Andrea Tyson said.

R. Glenn Hubbard, Dean of Columbia Business School and former chairman of the White House Council of Economic Advisors under President George W. Bush, believes the fragile recovery can speed up and that addressing healthcare with a market-based approach should be part of policy decisions.

The country has a spending problem, he said, and the spending is concentrated in Social Security, Medicare and Medicaid.

"We need to convert the open-ended Medicaid program, that will grow and grow, into a block grant," he said.

He also recommends tax code changes and allowing market forces to enable cost containment. Compelling the disclosure of information about prices will make consumers better shoppers.

Given the choice between the healthcare system of the 1950s with its offerings and its costs, and the healthcare system of today, Hubbard says he'd definitely choose today's system. Innovations in healthcare are worth celebrating.