This transcript is automatically generated
What's worse for our economy falling -- the fiscal quit or ending the bush era tax cuts a new survey of economists who reveals that tax hikes would cost the US economy.
About 200 billion dollars next year that is twice the cost of automatic government spending cuts here to weigh in is Matt Welch editor in chief.
-- reason magazine.
You know I was surprised to look at the stats and because we that fiscal -- sequestration.
If -- -- -- such a huge deal.
To think that the impact from that is half the size of what we -- -- from the expiration these tax cuts was surprising to me.
It actually isn't a surprise -- when people have done research into.
How do bridge fiscal deficits cross a lot of different countries they have consistently come to the conclusion.
That it is the tax hikes that hurt the economy and at the that the efforts -- work the best for the ones that involve the biggest government cuts not just in terms of the economy government cuts is much better for the economy and cutting then then not increasing taxes but also for India having an enduring fiscal sort of package that -- they -- deficit reduction -- So when you see it you know it's 200 billion dollars that would be taken out of the hands of the private sector these tax cuts.
Expired vs a hundred billion in government spending that would come off the table.
Is our multiplier and that where you're sort of factory in -- -- might -- happen or is that history.
The street how much you know money would how much taxes would go up -- Try to well economists all differ on the number of the multiplier whether -- and actually.
Exists in one direction or the other.
But for sure when government takes our money and try suspended its going to do it less efficiently than if we spent that ourselves what we say that there are some economists that don't agree with that the only -- -- -- the economists disagree that is at a moments of economic crisis rights of the keynesian thing is not about spending money.
It's about spending money when demand has fallen off when there's less that's right so we're not like that we spent money.
We doubled the size of federal government -- so did we have a much better economy in 2010 now because no one believes actually that if you just spend money it's going to create jobs.
Yeah kids also doesn't take into around.
Account that you may have to borrow in order spend that money he always that's always like a government surplus from some other time if they're spending so that makes it.
He thought Freddie gives us a dead over overhang went up debt service is threatening to double and triple enough Iverson yet -- of course that the really scary number in this study is that -- group together what if both things happen which.
We can't imagine that really happening but if you group -- all together everything that happened at once and you also.
Took into account all the new taxes that are coming from Obama care economists estimate in the GDP GDP would drop anywhere between three point six to five point 2%.
It is a strong negative it's astonishing how little this is being discussed in terms of the presidential race for example -- didn't talk about this really at the debates.
It's a consensus opinion whether you're a little liberal libertarian -- Republican whatever among economists that if these these fiscal -- happens on January 1 which it currently scheduled is tap right now yeah then we are going to see the economy suffer pretty badly.
Europe are right thanks so much -- Airline travel has lost much -- --