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Former Goldman Sachs Vice Chairman Robert Kaplan on the need for politicians to address the fiscal cliff by reducing spending and increasing taxes.
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Had 85 days left until the country well it faces a fiscal clip.
And do you know where your congressman is lawmakers MIA and we're getting warnings from the IMF.
A top official at the International Monetary Fund warns congress they tell them that look.
You need to show progress so the world.
Can stop worrying.
The former Goldman back vice chairman Robert cap Robert Kaplan was waiting for this to Robert what do you make of -- -- well their right to issue the warnings.
But we've got a very long road to the leverage we happening began yet.
And I think all -- IMF Hussein is you guys got to get started Europe is already started.
You're the started here's the issue here's -- problem Honeywell the head of Honeywell did it -- is saying.
Look everybody is nervous that's why we're not hiring more worried about this fiscal cliff -- -- it costs climb all the saying.
We could face a global recession do you think they're worrying too much or do you think they're wary wearing his ballot.
Business leaders are worried about whether congress is gonna do the right thing but I believe the markets and most business leaders think it's going to happen but the reason they're making these statements -- -- at days they think that that it's gonna get resolved they gonna do all they do.
Now by the way after this -- will be several several more clips this is a multi year process meaning we're way over leveraged.
And and you could debate why to tax cuts two wars.
We've done nothing to be leverage we've got to get started.
And this first -- is just the first installment I think of a multi -- side.
Robert make of this any -- the idea one idea being floated now down -- Washington DC is Miller ran through.
-- basically.
-- negotiated deal it says we're not gonna do anything about the fiscal cliff we're gonna let it happen and then.
Immediately pull back on that.
And basically allow the bush tax rates to stay for everybody except those in the upper brackets to give Republicans cover to -- look -- we did put in place a so called tax rate.
That is lower they'll call -- a tax cut.
What do you make of that idea.
Well I've ever heard Bob heard lots of stories like that.
-- so Republicans won't have to vote for tax increase they can actually vote for tax cut.
At a lower brackets right with a lower bracket rates in place but the reality is this is this is Con -- sideshow tactics.
The reality is whether people want to face our revenues have to go up.
We've got to cut spending read to entitlement reform and may even need some stimulus along with that.
But all those things have to happen and there's no getting around it and they can hide behind.
Whatever.
Gimmick they want but we've got -- all the glitz.
Market reaction to that move if they just say you know what we are gonna go or the fiscal cliff and then immediately pass -- A bill that says you know what really gonna raise taxes on the upper bracket well if they did that it would be well telegraphed and I don't think abuse I don't think they would do it in a subtle way.
Everybody would what -- -- virulent reaction to the market reaction to any thing that shows fiscal responsibility in my opinion is gonna be pots and we're not seeing the markets react right now the markets or who are benign about this I think the biggest danger for the markets are is a policy mistake and it's chaos -- cap -- here's the issue -- -- -- problem.
Just think that you know what we've seen is we -- -- an economy distorted by bubbles one pundits said look it's like the economy's been a platform shoes for the left when he hears.
And essentially I feel like they're -- The market and at that as some analysts and some people Washington DC had been drained of all comments censored like trying to.
Keep that keep the party going the bubble party going right got to say you know what that wasn't reality for two decades well.
Here's what European Central Bank is doing and the US Central Bank are both doing the same thing EC money.
And the reason they're doing -- easy money they're buying time for the fiscal policy makers to do their jobs which means.
More revenues.
Entitlement reform and spending cuts the reason Ben Bernanke's would do what he's doing is not to solve the problem.
It's to buy time for the fiscal policy makers do their job yet but that's not happening and we provide he's hoping they will and he's been pressuring them to all boring them and congressman well they're run that they're out of time so I hope they -- We're looking like Greece.
Not yet -- we've got to fewer jobs players are -- -- thank you so much.
