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Buffett on CNBC: Government Should Cut Back on Economic Stimulus

Warren Buffett is interviewed by CNBC's Becky Quick in 2011 in front of a mock-up of the Buffett family grocery store in Omaha where he worked as a child.
CNBC/Dave Grogan
Warren Buffett is interviewed by CNBC's Becky Quick in 2011 in front of a mock-up of the Buffett family grocery store in Omaha where he worked as a child.

Warren Buffett tells CNBC he thinks the government should reduce its efforts to stimulate the U.S. economy now that the recovery is gradually picking up steam.

On Squawk Box this morning, Buffett said that "the government really did its job there in the fall of 2008" at the height of the credit panic, but now "I don't think we need as much monetary or fiscal stimulus as is going on."

Asked specifically if the Federal Reserve should end the QE2 program that has it buying billions in assets to keep rates low, Buffett replied, "Yeah. I have enormous respect for (Fed Chairman) Ben Bernanke. He knows way — you know, he knows more about the Fed than I do by a factor of 100 to one. But in the end, I don't — I don't think we need more of that now."

On the fiscal side, Buffett points to government spending at 10 percent of GDP. "We have massive stimulus going on in the United States. Stimulus like you haven't seen since World War II. We just don't call it a stimulus bill."

He believes the "most important factor in coming out of the recession is sort of the natural regenerative capacity of capitalism... 300 and some million people trying to figure out how to live better tomorrow than they're living today."

That's why he's been "optimistic on America right along," even back in 2008, "when I knew things were going to go to hell."

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