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Forbes: Only A Miracle Will Save Us From Recession

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    Forbes Media chairman Steve Forbes explains why we are headed for a recession.

  • Duration 3:56
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-- you -- -- look at the numbers -- economy -- make the argument looks to be improving a little bit it's not so fast as our first guest here today only a miracle he says would save us from a recession next year Steve Forbes is chairman and editor in chief of Forbes media here now all.

To answer.

Mr.

Forbes why why do you think -- we definitely headed toward a recession this.

I'm always an optimist but I think here -- com.

Bring together -- certain policies Europe is raising taxes driving their economies and recession Japan's doing the same thing.

And we're about to do the same thing on this fiscal -- thing.

The best thing that could happen as they kicked the can down the road and do nothing just postpone everything no tax increases on January 1.

And put it off for six months so they might do something sensible.

They come to an agreement which looks like what they're gonna do.

That's going to hurt the economy.

Raising taxes on capital raising taxes on small businesses so there efficient means how much damage will be done and that it's gonna slow the economy next year.

OK so this is interesting because most of the predictions up -- -- -- kind of main street predictions have been.

If we go over the fiscal cliff then the odds of recession go way -- -- more and then a recession becomes likely.

And you're saying put just the opposite that if we don't -- all -- if we if we come to a deal.

And we got a recession not the particular segment which is interest -- we don't have to go over the cliff just postpone -- for six months put it off so he might get something's gonna get this happening.

Well -- that we will see what circumstances are maybe maybe that'll wake them up.

But to raise taxes now is gonna hurt you combine that with what the Fed is doing this QE3 which is gonna make it harder for small and medium size businesses -- get credit.

-- put that together that's gonna guarantee a slowdown sadly.

But a lot of even Republicans are thrown in the towel on the tax increases we -- wealthier Americans -- cause President Obama won the election.

And they think it's inevitable so why fight it at this point we heard that from Bill Kristol about a week ago.

Yes well Republicans won the house running on an eighty tax platform so they don't have what Obama does not occupy the high moral ground alone.

-- Republican should do but won't.

-- say you want Clinton type of tax rates that we had back in the 1990s.

Okay give us that Clinton type of Europe.

We'll give -- those higher tax rates would return.

We want spending levels at that Europe proportion to the economy.

Repeal obamacare will remember we got rid of Hillary care do you think so all -- -- Republican should go on offense instead of just letting the Democrats define the terms of debate do you think.

Fit all of the tax rate should go up do you think that the bush tax cuts should just expire crawling -- -- not know they they -- they feel wealthier talk and no I I don't want any tax increases.

That -- none zip zero.

And so that's why they should take this whole thing.

And -- that though critics will say or you just kick the can down the road right fine that'll help save the economy.

I guarantee if you put taxes on.

And debt come -- on -- -- wealth creators on know people who invest and create capital on small businesses that employ the most people in this country.

Bad things are gonna happen.

Just in terms -- -- and on this recession prediction system's perspective the economy numbers we report every day you could make an argument -- things are starting a little -- the housing data for exam girl.

That we've seen is getting turned around and other people to say time heals wounds and -- You know with 34 years out now from the crisis and the economy as it is even if you -- you don't do much in Washington will get things turned around on its own so well.

All the more reason not to hurt the economy by piling on new stop and remember we've gotten numerous new regulations coming on obamacare that's gonna hurt he got numerous regulations from Dodd-Frank hitting small banks that's gonna hurt.

Regulators in the banking industry still put make it hard for banks to lend to small and medium sized business put them through the third degree.

Should have all of this stuff coming why in the world -- wanna pile but on with new taxes do nothing in them we've than we've got some tough sometimes that don't harm the patients -- good good piece of advice to share.

Thank you -- great to see -- it's good to see you right now.

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