Is the worst over?

So, that's it then - it's all over.

The world's largest economy was once in recession but that was all in the past.

New figures show that the US economy is now growing at a rate of 3.5 per cent a year, and it seems like the grimmest days are behind us.

All that talk of a return to the Thirties now seems fanciful.

Caution

Except that it's not quite so simple.

The patient is walking on crutches costing billions of dollars from the tax-payer.

This growth comes after falls for four straight quarters, including a 6.4 percent decline in the first three months of this year, the steepest quarterly fall since 1982.

Which explains President Obama's caution.

But is he right?

There are two views.

One is that spending today means massive money creation and so either retrenchment or inflation tomorrow. It will all end in tears.

In contrast, there is a broad Keynesian view that when interest rates are pretty well zero and people and companies are loathe to spend, then governments have to take up the burden by borrowing to get the economy going.

To air this argument, the World Service brought together Elga Bartsch, the Chief Economist for Europe at the investment bank, Morgan Stanley.

But first Marc Faber, a big time international investor based in Thailand.

Steve Evans began by asking Mr Faber whether recent optimism in the stock market, even taking into account very recent falls, is justified.

First broadcast on Business Daily