Will we go over the fiscal cliff?
Art Laffer weighs in
- Duration 4:56
- Date Dec 8, 2012
Art Laffer weighs in
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Off of the looming fiscal cliff in this country President Obama is standing firm in saying there will be no deal without tax increases on the nation's highest earners.
Art -- a former member of president Reagan's economic policy advisory board says.
This isn't an economics and it will contribute to more layoffs.
I spoke with him earlier this week and he predicts that despite the protests the GOP will lose this battle.
And the president will make good on his promise.
He wants higher tax rates on the highest income earners.
Which is of course the worst place that you can raise tax -- because these are your employers these -- the people who do the investing he's the principal.
Purchasers they have the job creators so they're the last people you want to.
Provide disincentives to working but.
The president wants it I'm sure he'll go he's going to get it as well he'll win this battle on higher tax rates on the upper income people.
You think and the GOP's -- -- then.
Well on this issue they have to.
I'm remember what I would like to see the GOP do forgive me I'm I'm not the expert but.
I'd like to see them pass the tax bill to extend all the tax cuts for people under 250000.
And then I'd like to see them past the extending the tax cuts for everyone over 250000.
As well in two separate bills.
So that the Democrats take full responsibility.
For all the tax increases in the upper income people and they will -- The bad economy of 2013 and 2014.
Some of the Republicans can really change government in 2014 and bring back sensible economic policies but.
I don't see how the president gives -- on this one he's he's just very dogmatic on this issue.
-- animals are uniquely gonna hurt the economy a lot.
Well he feels he -- -- mandate given the fact that he won the election and he -- feels that yeah he has the green light to move forward on this.
He didn't even get 51% of the vote to be honest -- I mean he got about the same amount of George W.
Bush did when George Bush -- bush surely didn't have a mandate.
If you want to look at a mandate Ronald Reagan got 59% of the vote.
Party Coolidge got 60% of the vote Nixon got 60% of the vote.
This is not a mandate the Republicans control the house as well they control the governorships they control most of the state legislature so.
You know this is not a -- he's just pushing.
His power throughout and you know it's gonna do -- a lot of damage the economy unfortunately.
A lot of conservatives are right now are very angry with the speaker because they believe he's giving in too fast and particularly over this issue of taxes and there -- a lot of discussion going on within the party right now about.
What it is.
That the GOP stands for.
Yeah well this is one of the problems what would you have the House of Representatives there are 435.
Members of the US House of Representatives and each one.
Thinks of himself or herself as a very knowledgeable.
Well seasoned person and there are probably correct so.
To get them to operate in a coordinated fashion is very very difficult it's like herding cats as you say.
And you know -- do you need to have it act as one voice and I would love to see the Republicans.
Vote to extend all the tax cuts that's what they should do and then let the Democrats take responsibility for the ones that don't get done.
I don't wanna see new legislation brought through the house right now -- don't think that Smart.
Because there's no way the house Republicans are going to win on this when they're gonna be.
Held up as being obstructionists.
And that's sad because they're not they're they're the only sensible people in the game.
Let me ask you very quickly were you surprised the president are also asking for a big debt ceiling to be raised.
That's the whole I mean he's gonna play every -- -- And he's gonna see how far you can push the Republicans to make them make bad movies actually can hold them up for mockery.
Which is done for top for a long time and from -- you know when he excuse me.
So that the debt ceiling issue -- -- itself was something people aren't counting on that he brought up at this time.
-- because then the president is anticipating the next problem.
And he could have a lot of problems as we go along because the economy is gonna be really bad in 2013.
We're gonna have been an increase in deficits and increases in unemployment.
And the president's gonna want a lot more programs and he won't be able to put them through without increasing the debt ceiling by a huge amount.
Him and that's not good for anyone who -- it really hasn't.
Well is a sobering forecast in terms of what we have to look forward to and I know that -- watching very carefully.
Yes they have but the nice thing about this and what if I can.
Is -- 2014.
There will be 33 senate -- up.
And I think the Republicans are gonna take control of the senate after this the backup of the president -- that we'll get some good economics.
Hi we shall see what lies ahead -- looking forward -- the next election I -- -- you are all right thank you so -- for your -- yeah we appreciate your insights.
Met my pleasure thank you and.