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It’s Time for Government to Fix the Economy: Mitt Romney Economic Adviser

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Although Fed Chairmen Ben Bernanke has made a series of comments in recent days signaling the Central Bank sees an improving economy, it remains on guard to fend off any unforeseen risks. "It's far too early to declare victory" on the economic recovery he told Yahoo! News partner ABC in an interview Tuesday.

Glenn Hubbard, dean of Columbia business school, agrees. Even with a recent spate of positive economic data "we are definitely not out of the woods yet" says Hubbard, who is also an economic adviser to Republican presidential candidate Mitt Romney and former chairman of President George W. Bush's Council of Economic Advisors.

Markets have been trading near all-time highs on hopes that the Fed will continue its easy money policies, i.e. quantitative easing and operation twist.

[The Fed Is Wall Street's Drug Deale: Lance Roberts]

But Hubbard does not believe it's the job of Bernanke & Co. to do any more to revive the economy. "The real issue here is for the government to step up with better fiscal policy than we've seen to promote economic growth," he says.

Hubbard says there are three key things our representatives in Washington could be doing but aren't:

1) Massive home loan refis for homeowners in trouble on their mortgage. "[It] would be a like a tax cut for many Americans," he says.

["Pretty Ham-Fisted": Glenn Hubbard Reviews Obama's Newest Housing Fix]

2) Better long-term federal budgeting that would enable the U.S. to enact "tax cuts now which would be paid for by tax reform in the future."

3) Cut corporate tax rates, which would be a "powerful incentive for business investment that is strongly complementary to jobs," he says.

Hubbard says all these ideas would help improve the jobs picture and make the consumer healthier.

"If we grow at consensus forecasts of around 2.5 percent were are not really going to move the needle much on joblessness and that is a social problem."

High unemployment is not only a social problem but a political problem as well, as The Daily Ticker's Aaron Task points out in the accompanying video. Despite signs of an economic upturn, Hubbard does believe it will be the number one issue come Election Day in November. "I think this an election, a referendum if you will, on the economy," he says.

If Hubbard were counseling Obama today, here's what he'd advise him to do. "First stop the harm. Stop threatening large tax increases [and] higher regulation," he says. "But second try to do better policy. Let's start talking about tax reform. Bowles-Simpson was [Obama's] own commission. It's a good place to start."

Stay tuned for part two of Aaron's interview with Hubbard on the latest budget battle brewing in Washington