Despite recent signs of weakness, the US economy isn’t likely to slip back into a recession, Warren Buffett said on Tuesday. He also said both political parties deserve blame for the federal government’s failure to reduce the deficit.
Speaking at the 25th anniversary dinner of the Economic Club of Washington, the billionaire investor said he sees the odds of a renewed recession as “very low.”
But he warned that could change if the effects of Europe’s financial crisis were to “spill over in a big way.”
European leaders need to reconcile the “half-in, half-out,” nature of the euro zone, Buffett said. The 17 nations that use the euro share the same central bank and interest rate policies, but follow wildly different national tax and budget policies.
Buffett, who is the CEO of Omaha, Nebraska-based Berkshire Hathaway Inc, also reaffirmed his support for the so-called “Buffett Rule.” The proposal would require Americans with incomes above $1 million to pay a 30% tax rate.
“I couldn’t get a disease named after me, so I settled for a tax,” he said.
When asked how he would reduce the US government’s budget deficit, which is on track to top $1 trillion for the fourth year in a row, Buffett recommended raising taxes and cutting spending.
“The problem is the Democrats don't want to talk about what expenditures they would cut and the Republicans don’t want to talk about raising revenues,” he said.