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Art Laffer, former Reagan advisor, on why he believes we have already fallen off the fiscal cliff, plus his advice for President Obama on dealing with...
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The president spoke to a in the -- of chief executives including JPMorgan Chase's Jamie -- Apple's -- cut costs 'cause CEO I'm sure.
They all have some great insight.
But gas line.
One of president Reagan's top economic advisor says we've already fallen off the -- So now what slackers here -- -- -- President Obama has to do right now welcome back to the show thanks for -- nine.
What you've heard everything we've been talking about so far before I get here three things are we hear we hear about France being downgraded is that we're we're headed.
Yes that's where we're headed -- but I just love Jonathan he's just perfect on everything I couldn't -- -- -- he was what it really great.
GAAP nobody it that's right and we're moving in that direction -- honestly and -- and on the overnight -- is -- we're looking at a shot and celebrating he's so happy that you're giving him a plot.
-- -- know we are we're gonna be highlighted the I can't see that while the he really is good by the yeah oh look he's he's a great -- ask you you know the three things that you think President Obama has to do right now.
You know putting politics aside to sort of -- the -- for us financially one is we his growth rates I mean that's sounds fantastic but how do you do that.
Well what do you do if you do you you extend all the tax cuts not just should not just -- once for lower income to extend them for all people.
You really can't raise taxes on job creators.
And expect to get more jobs honestly Melissa that's not the way it works.
Then what he should do is postpone all the Obama care tax increases.
And extend them out two years as well and then really get to work cutting government spending those three things.
Are the only way I know that would really increase the secular growth rate of the US so you know a lot of this is already gone over -- already happened.
People -- already shifted in come out of 2013 and -- 1012 which means we're gonna drop off.
I mean it's gonna happen and I'm very sorry that -- well.
It shouldn't.
But that's the reason I mean you say that that we've already fallen off the clip that authority -- late what is your reasoning or for that is that because of -- things like today we saw Wal-Mart paying out -- dividend.
In this year rather -- next year it's that people can avoid that tax hike.
Yes and that's why it's spending is dropping and I'm capital goods -- this year we have a 100% write off of capital expenses.
And -- Syria did depreciated over the life fed who wouldn't buy all the capital ahead of time.
I have an all dog and then have next year no new capital purchases.
A states everyone's giving away the money to their kids and their grandkids this year.
-- wouldn't give away five million dollars per person next year -- to one million dollars in the tax rate goes from.
35% this year after the five million.
255%.
After the one million next year and I can go on and on and on the dividend tax exercise and stock options.
Selling off assets with capital gains and then reinvesting.
All of those things are happening unfortunately.
And they've already been happening for quite some time.
That's exactly what happened -- 10102011.
And I'm sorry to say it's a lot of it is baked into the.
Eat meals like I wanna play if you -- -- this CEO of NASDAQ Bob -- held.
Made this comment is short -- I wanna get your reaction to it on the other side let's listen.
We're in a fundamentally different and better place -- Europe but let's not.
Kid ourselves that Europe is a road -- from you know where we are on -- more on that train.
To Europe right now it's a question of feel you.
We're here when knowledgeable were forewarned.
Let's get the political -- to do something.
That is so depressing on the heels -- we started this segment -- breaking news about the fact that France got downgraded by Moody's again.
You know saying that there they have a sustained loss of competitiveness.
Do we how we break out of that I mean how we feel bad about this well look we do right now to break out of that.
Let.
You know they're just what I said -- you do Simpson Bowles and you cut government spending dramatic he'd get low rate flat tax.
Spending restraint.
Sound money you really gotta change the Fed's attitude then you've got to have free trade -- But he's the only security -- people say that the reason why France's in this trouble is because they've imposed austerity everybody uses Europe to make their argument.
So you say we have to dramatically cut spending people -- you know the other side points to Europe and they say but that's why there in that -- real quick what your answer to that.
The wrong.
Not low rate flat to -- restraint I -- they are run at Bateman -- to people -- the world to people farmer in -- that's the whole world.
If he give farmer -- unemployment benefits.
What do you think -- form.
It's farmer a.
Government spending is taxation pure and simple Milton Friedman said it over and over and the reason we have the Great Recession.
Is because of the stimulus programs not in spite of them are high government spending has caused this economy.
I keep trying to tell everyone that but.
That's exactly what -- the Great Depression that's.
And Clinton was a great president because -- cut government -- -- -- was slowly T shirts that say that we'll start selling them because that's that's if the deal it is I I think we gotta get the message out -- area.
