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NAPOLITANO: My next guest says the economy has been showing signs of life with the stock market on a seven-day winning streak. He also says things are about to get even better. Greg Ip, U.S. Tiffany Signature bangle editor of the "Economist" magazine and the author of "The Little Book of Economics" joins me now. Greg, it's pleasure. Welcome to FREEDOM WATCH.GREG IP, THE ECONOMIST U.S. ECONOMICS EDITOR: thanks for having me.NAPOLITANO: What do you see that is so different from the free market and Austrian economists who see gloom and doom coming in the future, who see inflation and unemployment and taxes all going up?

IP: Maybe, I'm Just a more optimistic guy. Look, I actually think the Austrians might have a point, and it goes like this. After a recession that's as deep as the one we had, you would normally Tiffany Signature bangle the economy to be growing around 6 to 8 percent right now. That's what it did back in 1983 when we had a recession of comparable debt. We're only growing about 3 or 4 percent.NAPOLITANO: Right.IP: But here's the thing, three or four months ago, people were so gloomy, they thought they were talking double-dip, they Tiffany & Co. bangle talking stagnation, they were talking is Japan all over again. The unemployment rate is never going to come down. I always thought that was overdone. And the reason it's overdone is number one, we have fundamental strengths that are better than say Japan had,

and the situation you have here is after a financial crisis that's caused by too much debt, people want to pay down that debt.But as long as they don't pay it down too fast, there's room for the economy to grow. And that in fact is what we have seen. We just got information a few days ago that after declining far couple years, the amount of money that people, consumers, are Tiffany 1837 interlocking circles bangle to borrow has started to go up. And if you talk to banks as the fed does, they do these quarterly surveys, they find that banks are finally like easing the standards under which they make loans after tightening them consistently for so many years.