Economy slows as Washington stalls on extending tax cuts
Americans waiting for permanent action?
- Duration 8:14
- Date Jul 28, 2012
Americans waiting for permanent action?
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The economy's slowing consumers.
Bombing more US companies warning.
And DC does.
Well the economy be -- and uncertainty until lawmakers agree to prevent a massive tax hike.
Hi everyone I'm Brenda -- this is Bulls and Bears let's -- flag.
Yeah they aren't able the -- this week we've got Gary B Smith Tobin Smith Jonas Max Ferris along with David Nelson and Chris the Phoenix -- everybody.
So -- be no recovery until we see tax cuts for every one.
Those like -- and then it's just not personal opinion look at the number of companies who have come out this past week and warned.
That earnings are likely to be down or -- because of uncertainty and me and background to be better to -- the companies that haven't warned I mean we have.
McDonald's we have four we have Cisco.
We have apple we have -- box it's like a who's who.
Of the fortune 500 now and those companies obviously -- across the board different sectors different industries -- You know consumer goods all across.
Everyone saying the same thing congress clear things up make at least that the -- atom bomb the tax situation clear.
And OK but Chris -- to that isn't there.
Yet there's enormous cost -- in this I think is part of the problem I think everyone would agree.
Best case -- you'd wanna extend all the tax cuts.
But you've got multiple you know pressure points number one pressure point is that the fiscal situation -- you're talking about a massive deficit and debt that keeps on growing.
And so if you extend the tax cuts all in particular yet to come up with that additional revenue.
The other problem and I think this is really -- to keep in mind.
He's not only do you have to talk about the payroll tax extension.
Now don't get -- -- of -- unemployment insurance extension -- need to talk but some frustration but then you have to do all of this and the tax cuts in the context of raising the debt ceiling and he is going to be.
-- lame duck from hell.
Come after the presidential election that just the reality.
-- I don't respond a lame duck from help but I can't say that's.
-- it's pretty simple here 10% of the consumers and as you know consumer 70% of our economy.
Are the ones you're responsible for 40%.
-- the discretionary spending and so if that if you know you take a dollar away from that group that's -- top 10% of earners.
It's like taking four dollars by the economy and you know that math.
Is not being considered here we we sort of think like this is all happens at a laboratory but in the -- -- -- battery is.
Do you take four dollars out of big spenders were on the rate for a recession right now everybody that I follow and we use says we're on that track you do this -- -- recession.
And and to honestly economist is barely crawling you can you really can't say it's growing right now.
But do you think that that renewing the tax cuts for everyone at the cost of raising that deficit is the right thing to do.
First of all we have -- text -- and -- the -- crawling along -- -- so I don't know how much they're working at this point you know.
We can't afford -- east of any group the whole tax breaks the -- -- various extensions apparel on top of the bush and -- and as.
We can't afford them -- -- if you deficit even if you know even if they all go away and this.
This cliff happens next -- and there's these -- spending -- you don't even enough either.
Will still be running a deficit even with a high tax rates and the spring which means -- actually still a stimulus program so.
The worst case is a stimulus program there is no plan to actually close the deficit -- -- do you know substantially.
With either tax increases and spending cuts anyway so I don't think it's as bad as it is I don't think any group deserves a major break in the in this in this clip there -- about take -- it together at this point.
We can using small tax break that we pay for the cots were never gonna organize the that -- basically -- isn't it that consider what would it be considered a tax hike by the very people who would not be getting -- and wouldn't and and there are other ones are creating that jobs are.
I agree if you look at where we're approaching the fiscal cliff and I think the administration misses the point here we should be talking about tax reform not raising tax rates.
You know read the moment of truth -- the Simpson Bowles plan they get it you know we need to -- we need to lower than it.
-- attacks we need to broaden the base and I'll go a step further we need to reduce corporate taxes to make us more competitive around the world.
Well all of those things may be you know on your wish list -- right now what -- face saying.
Gary B is.
Bet that fiscal clip everyone's talking about that at the end of this here.
We do not that if we do not that the tax cuts expire and -- have huge spending cuts as well.
Why exactly -- I'm not worried about the spending cuts I mean that he all the -- -- just talk about the stimulus program essentially saying the government statement.
-- paying out more than we're taking in and yeah let's fix not part -- with with the law a bigger cut but you know getting back to back tax side in the and certainly -- it's.
Not just don't forget that the bush tax cuts that are going away capital gains are gonna go up we have the Obama care health taxes coming -- You know bit the left argues let's go back to the the Clinton tax -- yeah that's why but work our way -- -- -- -- -- -- -- -- federal taxes -- -- -- -- that's -- that's -- -- not relativity and certainly it's concerning to people just.
Flat out not spending now because they know in -- -- the -- out a lot more to the government next year.
Janice had is that.
And certain key figure -- -- year and you're thanking us.
I think there is certainly -- not gonna do anything organ have a certain packaging which we had before it's relatively certain at this moment uncertain as we keep extending -- six months a year for this group -- valuable like every cent who's gonna win this election.
That's not a tax plan -- every year gets pushed along AMT gets pushed opportunities every.
They get out.
Get a new regime going with slightly lower taxes not as -- these cuts we can afford let's be honest we're not gonna do that the spending cuts enough to pay for it so we gotta let something happen I think -- be in a sounder position.
-- smaller deficit and point thirteen which is what we're gonna run it.
But -- all happen tubby is the time now although when the economy is really showing signs of of getting worse.
Well now an end and the reason -- -- an immediate you know Jonas it is right.
And in -- the perfect world I'd love all the stuff to happen but but we got to take the biggest things right now and make sure we don't -- up.
-- -- number one issue yup of the mobile plus -- payroll tax and the -- extensive is that we would just take us into another recession and then all our hands are tied.
-- I mean here's that here's the problem wasn't having worked up there.
You know I thought I tell you got to create he had no joke.
Biden -- -- not to birthday was balloon if it's if they are not going to come to an agreement I'm convinced you know that's the scenario.
Best case scenario is finally -- -- boxes -- yes of course it is yeah action here yeah fact that -- -- -- I'm I'm I'm not talking about I'm talking about post election but none of this is gonna be decided before the election.
I'm don't know when we're in the lame dot.
Is still -- pushed off into the next session of congress and in the problem here what we have right now is we have political leaders who do not want to face the reality the reality is.
We gotta have some additional revenues you can do that by raising taxes or tax reform.
You can decide which one but neither seems that likely in the notion that somehow.
The fiscal problems of this country faces big scope of the debt and the deficits which are gonna keep on growing we're gonna ignore them.
I mean it is a fantasy that this is not gonna come back and -- to Sunday it's going to be a disaster may not happen to two years or three years of four but he.
-- -- -- Well I was yesterday and I -- -- these deficits but no one that hey it keeps talk they just assume that government spending I'll okay that we have to keep growing.
Yeah let's -- -- deficit but let's accidentally clicking the government that's part iPod.
But look look at for example the sequestration right you get the Republicans agree to it and interment of the defense cuts and -- turning around saying we can't have defense cuts.
-- defense represents one of the -- is actually the largest chunk.
Of the defense budget into one lump sum if you don't wanna cut that would -- want to find the money.
Okay loud I don't -- like 10% of the desktop product carefully -- really -- cuts OK okay guys that's got to be the last word thanks.