Says problem is not enough drilling!

US economy should be growing at 3-4%: Former Fed governor

By Katie Holliday

July 31 (Bloomberg) — The U.S. economy has the ability to grow at a rate of 3-4 percent if policy makers removed the constraints obstructing its potential, former Federal governor Robert Heller told CNBC on Thursday.

Heller’s comments follow better-than-expected gross domestic product (GDP) figures on Wednesday, which showed the world’s largest economy expanded 1.7 percent growth in the second quarter from the year before, exceeding expectations of a 1 percent rise and an increase on the first quarter’s downwardly revised 1.1 percent.

“We may be out of the woods, but we are [still] walking in a mud field,” said Heller, who served on the Fed’s board from 1986 to 1989 under President Reagan.

“We are stuck in a range of 1-2 percent growth, which is not where we should be. If you would take some of the constraints off the U.S. economy, it could be growing a lot faster at 3-4 percent,” he added.

Heller said one of the key constraints was restrictions on drilling activity on government-owned land which has prevented oil and gas companies from expanding at the pace they should be.