Mohamed El-Erian: We Have A Do-Nothing Congress

Mohamed El-Erian, Allianz chief economic adviser, was on CNBC Tuesday to opine on the obstacles that are hurting the U.S. economic growth.

Smart Government

"There is a difference between no government, smart government and silly government, okay?" El-Erian said. "So, silly government and no government doesn't help. What we are looking for is smart government and what is unambiguous is that we have had a do-nothing Congress. Either they can't do things or they shouldn't do things or they won't do things."

Economic Governance Dilemma

On the Congress and President Barack Obama getting a lot of things done, especially in his previous term, El-Erian said, "Let me give you one fact: the basic element of economic governance is the passing off a budget every year, okay? That's the basic element of economic governance. We haven't had an active budget, okay, for over five years that is an issue that the Congress can't even come together on the most basic element of economic governance."

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On The Verge Of A Lift-Off

He continued, "It's two parties that are being pulled further and further apart by what's happening to the extreme end of their party. You had that talk about Tea Party earlier on, right? So, that's what's happening and I think it's a real issue because this is a country on the verge of lift-off."

"It has tremendous entrepreneurial dynamism, it has lots of cash sitting on the sideline, there's a ton of innovations that are going from being firm-specific and sector-specific to going macro and if we can unleash all this it will make a huge difference," El-Erian concluded.