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Forbes Media Chairman Steve Forbes on the impact of austerity measures on European countries such as Greece.
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-- many reports on Greece automatically describe I met and forced austerity package tax hikes.
As the responsible thing for countries like Greece and Spain to -- -- -- What they have that analysis is wrong what -- the best thing these countries could do is to forget about the IMF and look instead.
Two US governors like Scott Walker and Chris Christie and adopt bear growth policies instead of the IMF austerity packages.
Steve Forbes -- such a policy may actually work is chairman and editor.
In chief of Forbes media Steve good to see a good decision star Forbes on fox and Fox News Channel averaged following your -- Saturday morning eleven OK not know how much you love BI MF you always have you always.
Being a little facetious here but neither Greece nor the United States have have benefited from our security -- programs Regis.
Raise tax rates were try to balance the books right.
Now exceptionally perverse they -- -- in the early 1930s was disastrous -- same thing in the 1970s raising taxes.
Raising effective tax rates what that does put the economy in -- death spiral.
Then that doesn't meet their budget deficit projection so they have to put in more taxes more austerity.
So -- go down the -- has -- been doing it to countries around the world they are decades they've been guilty of economic malpractice if they did that in medicine and all be in jail today but instead they get more taxpayer money that we have very little say over and they get don't do it again and again and again.
Steve what do you think happens this -- -- -- is the Greg's it if you will happen.
Where -- -- stay in the European monetary union.
I think they'll end up trying to stay in the monetary union and see if the German shall come up one more time with a -- essentially if you know and Angela and come through again.
And that but ultimately with Greece it's the same thing as with Spain why not -- -- -- -- -- real -- -- -- of -- -- an -- percent flat tax easy easy to collect.
No point in avoiding and -- that low rates start to get some growth again how about making it easier to start a business in -- even have to go through all the bribes of licensing processes.
Do what New Zealand does she do with the click of -- computer done here in business but that.
Growth policy -- talking about which after all the same -- policy Ronald Reagan would have power here in the of the dead 1980s led this seven strong -- -- growth.
Angela Merkel seems committed to the IMF policy switch instead -- for these book balancing things that have nothing to do with growth.
It's amazing how often they ignore experience I mean Germany did this in the early thirties -- catastrophic results.
Now we saw the same thing in the 1970s.
And yet they do it again and again in the 1980s Latin America went -- a terrible so ABS of those IMAP -- so even if they get a bailout if they get a bailout on condition that they raise tax rates which is gonna be harmful to businesses which is what the IMF wants them to do.
What's gonna happen I mean are we gonna have more of the same.
We're gonna have more of the same Italy they're raising the VAT yet again they're raising up of taxes on value primary ever residences again.
And then they wonder why the economy goes -- at the same time and Italy they're backtracking on removing obstacles to doing private business.
Us what I'll tell -- I just don't -- an easy solution to this I mean.
You talk about making conditions easier for business get more jobs on the payrolls.
But and in fact is when you're risking at at a credit freeze it's tougher for people to get money they can't get refinanced.
Look at Germany after World War II in the rubble of 194849.
-- -- -- -- the finance minister against the allies wishes those of all the wartime rationing you controls people -- is gonna lead to work.
More of poverty.
Instead the economy came back to life he created -- currency -- a thinning of the deutschemark nothing behind it except we'll go to work again.
Credit came in the economy start to thrive.
Credit will -- and accretion of a lot of overseas Greeks would be glad to investors they thought there was a -- -- -- -- hyperinflation especially the world's I think hyper inflation -- contracting about to getting some credit flowing again to be put to work by.
Launch -- -- after all on the Greeks leave Greece they do very nicely -- -- know how to do business they just need the right environment.
By the way yesterday we played a tape of at least one European parliamentarian a -- Who was saying you know this is we're just -- piling debt on top of debt and the IMF is not target of our growth.
It is is or anybody other than some isolated voices in the wilderness talking about doing the right thing -- this is where our elections going to be so important if we get a new president Mitt Romney who puts in some of these pro growth policies.
That's gonna have an impact in the rest of the world and Reagan did his pro -- policies when than a decade and half fifty countries around the world put in substantial tax cuts.
So if we get it right others have a chance to get a right right now.
That's like doctors keep leading -- they don't learn Steve Forbes thank you for coming in good thank you -- immortal let me yes on Fox News Channel thank you.
