warren buffett

Billionaire investor Warren Buffett of Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE.BRK.B) says that American economy is unlikely to slip back into recession “unless events in Europe develop in some way that spills over here big-time.” He was speaking at the 25th anniversary dinner of the Economic Club of Washington. He answered questions from David Rubenstein, co-chief executive officer of Carlyle Group LP, the world’s second-largest private equity firm.

The European debt crisis threatens the existence of 17-nation currency union. He said the European leaders must reconcile the “half-in, half-out,” nature of the Eurozone. “They’re in on a common currency but they’re not in on a common fiscal policy or a common culture or common labour practises,” Buffett said

While talking about the mounting US budget deficit, he reaffirmed his stance on the so-called “Buffett Rule” which requires Americans with over $1 million annual income to pay a 30% tax rate. The Oracle of Omaha blamed both parties for the federal government’s failure to contain budget deficit. When David asked what America should do, Buffett recommended cutting spending and raising taxes.

President Barack Obama showed  firm interest in the “Buffett Rule.” Buffett’s name became part of the tax debate after mentioning that his secretary pays a higher tax rate than him. Like Buffet, many rich Americans earn most of their income from dividends and capital gains, which are taxed at lower rate than incomes.

Buffett also touched on investing, saying that Individuals should invest in index funds every month and avoid betting on specific stocks. “The average person who just consistently buys equities — which to me are by far the most attractive investment choice around — at the end of 20 or 30 years, they’ll do very well,” he said.