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Economist George Gilder on efforts to avoid the fiscal cliff and the importance of Israel to the U.S. economy.
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Debt and deficit.
Joining me now one of the country's most thoughtful provocative political and economic.
Acres George Miller is also the author of the Israel test a new addition just released today by George -- here it's great debater but.
Let's start with some politics or government partners but it's just talk -- how -- he dislikes what he's sick and the right and -- I think we're actually slow.
But -- -- -- faced with economic calamity if we don't.
Our politics don't work here what would you put the -- them that we're gonna see you rationality and effectiveness emerge from Washington DC on the fiscal -- Zero.
I thought that.
I mean give it.
If we could just keep our current tax rates we would continue to increase government revenues you know government revenues.
Have increased 26%.
Under the bush tax rates over the last two years the only there is that since then again.
Over the last two years.
Government revenues.
Have risen 26%.
Almost a quarter.
Using the bush tax rates -- low tax -- spurring more revenues not last revenue.
Which has been demonstrated throughout economic history but why -- is it do you interpret this all of the drama around the fiscal -- to be really.
-- a total lack of fate.
Heresy in front.
The growth model that's being demonstrated vision point out around the past two years I mean they're -- saying -- -- this economy just can't grow fast enough to support this government weakness we won't see revenue.
Increase unless we raise.
Tax that absolutely correct.
But.
Of course the perverse thing.
It is you don't get growth if you raise tax rates.
-- California and several other states the -- operate.
Is approaching 50% effectively with a 50% to operate a business has as much incentive.
To fire somebody.
Ted lower costs as to hire somebody to increase revenues.
So we have a contemporaneous.
Experiment going on.
It's a high risk -- -- but nonetheless experiment in California bringing tax levels above 50%.
In the nation right now we're getting ready to move higher.
Is -- are we going to see California behave as the canary in the coal mine if you will.
When it comes to economic growth and the ability to support an ever growing government of course.
I mean -- -- people are just fleeing California.
California is a microcosm of what happens to countries that.
Raise their tax rates.
Entrepreneurs.
Fully and welfare.
The recipients for -- and and you get us unsustainable.
State of affairs and that's California unsustainable.
And meanwhile -- destroying Silicon Valley Silicon Valley is -- America's greatest asset.
It's a source of all our technology and really -- -- -- -- our military power and -- potential for growth.
And where's.
Six rolling it over whether pale -- -- knew everybody in silicon valley's now angling for grain subsidies.
And it's a tragedy.
And that tragedy compounded by the fact that them the money that has been spent.
By this administration.
It if you will venture money.
Excellent -- has -- this -- you know.
They're twisting there'd.
Let's both defying our venture capitalists turning people like John door into a -- -- idiot.
I think our government does a lot about John seeking government subsidies is now.
It's now what wants us to support him rather than him to support the country would wonderful new companies like Intel where do you.
What John is being adapted to new reality is these issues -- the body of the primary source of the capital for his turn toward supposed.
-- I wanna turn to this -- The Israel -- and Russia.
You take up the issue.
The world civilization.
The importance of Israel with Bennett.
As a capitalist.
As well as Jewish state.
-- -- -- you really believe that Israel is that strong that important of all -- In and the world's future I certainly do I mean.
The American economy is heavily dependent on Israel today partly because of the debauchery of Silicon Valley.
But now Israel is -- -- Is that crucial source a new technology for apple in all Apple's flash drives it just bought a new Israeli company fifth.
And power its new technologies.
Microsoft.
Cisco.
Johnson and Johnson and Monsanto.
All these companies are dependent on technologies that come from Israel and of course our defenses are also deeply dependent on technologies that originated in Israel.
And -- it's just -- Obama seems to think that the Muslim brother that -- more important in Israel -- Turkey is more important that Israel Israel is.
Is the most important technology force in the world next -- the United States and if we keep on our current path Israel will be number one.
-- Georgia over the -- is the Israel test it's always good to talk.
Great detective thank you.
