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Stanford University Economist Edward Lazear on why tax cuts are key to boosting jobs and the economy.
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Well stocks -- -- the only thing -- today oil also plunging down more than three box -- to 83 dollars a barrel -- fallen to its lowest levels since last October.
-- these jobs day bush I was able to President Bush today start to get -- keeps giving the White House today say.
It's having trouble digging out because of course the -- of inherited when the president came then.
When things are bad now but they were also -- that and so what to do right now George W Bush's former economic advisor.
-- Sears is loses focus on lowering taxes he joins you right now -- you you've heard the art of the other side billionaire pride that regretted that what do -- -- Well you know -- we've been.
President Bush -- been out of office now for about three and a half years and we've supposedly been in the recovery since June of 2009.
With some up some good quarters.
I think the turnaround now cannot really be attributed to what happened earlier so.
What we need to do is stop blaming people and rather than that focus on the kinds of policies that will contribute to economic growth I don't think we've done that.
We have not focused on the long run we've not taken the kinds of actions that are pro economy pro market pro business and I think that's -- we need to do.
You know the rap against Republicans -- something that the White House has said about going back to those old policies is everyone let's tax cuts and all of that but the Republicans didn't really practice what they increased spending went like crazy basement for two wars cut them off budget -- like doubly crazy.
Then you know -- -- cocked idea for prescription drug medication coverage.
That really wasn't paid for.
So let's say that if you go back to those policies giving bids are bad now they're gonna get even worse than they are now and worse than they were -- equities and.
Well you know there -- certainly things that you can point to in terms of increased spending but remember that.
Under the Bush Administration the average deficit was 2% of GDP.
It's been closer to 10% of GDP over the past three years so I think we'd be very happy to be back 50% right now I I'd settle for that at least for the next few years.
Well -- that is the best way to get back to those lower levels.
Is to stimulate through tax cuts so you think definite right when it cut tax cuts -- at least keep the bush rates it all sets -- by the editors here.
If we to extend them we had -- -- -- the top of the show Edison for another three years what would that do.
I -- again I'm not arguing that taxes necessarily pay for the tax cuts necessarily pay for themselves what I think we need to do as we need to.
Focus on those problems that are going to continue to reduce growth in the future.
We've got a situation coming up as you -- -- that everybody's calling the fiscal cliff the fiscal cliff by the way is mostly on the tax side it's not on the spending side it's the fact that we have.
Sunsets and in taxes that -- taxes are gonna go up and go up significantly so if you look at.
The government report Congressional Budget Office report most of those increases are on the tax side.
We also know that tax increases are very detrimental to economic growth virtually all the studies now pretty pretty much document that.
And so what I'm concerned about is not how do we maximize the size of the government that -- we maximize the size of growth in the economy and make sure that we get jobs going again.
And the only way to do that is to make sure that we have economic growth and economic growth means lower taxes and more positive returns for businesses as they invest.
But in the meantime in that environment even whatever the -- tax it's like -- that.
That it did did did -- is now -- just uncontrollable.
Unsustainable levels so we might have a limited wiggle room right.
Right well mix but think about it this way -- You know right now we're starting to look like Japan remember Japan haven't lost decade now it's actually like the lost two decades what -- Japan do they decided to try to.
You know stimulate their way out of -- so what do they do they got themselves in a situation where their debt to GDP ratio is now 200%.
You know ours is bad hours is close to 70% but it's third of what what Japan's -- And what it would buy them you know -- bottom two decades of very low growth so I think the evidence for spending your way out of this situation is.
The limited is negative -- best and I think that the big problem that we face is that.
Unless we get moving in terms a positive trade agenda.
Less and less it look I don't I think less regulation but less in regulation in impedes growth and and taxes that are.
Moving in the wrong direction as I see it this is not gonna be a positive environment you know.
The situation right now is starting to look to me like it did in the second half of 2007 and -- was a pretty scary time and and that right now it's even scarier because the situation the present situation is worse than it was in 2007.
We'll put -- -- always a pleasure having you once or.
Benazir banking.
