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This with our next guest he says Republicans should give -- -- the tax cuts for the rich but they should make a demand of their own.
Ed -- this year -- worked with Mitt Romney big capitalist and on many times of -- the author of unintended consequences he say.
-- if you're gonna raise taxes you have to get something back right which is what.
I think that they should make any tax increase who rolling back the bush tax cuts for example.
Conditional upon reaching agreement that stops that from growing as a percent of GDP they can't possibly reach that agreement by the end of the year.
So I think that as part of if they shed.
Retro actively roll back the bush tax cuts if they can reach agreement.
Can't stopping -- but a lot of has I think they've already done enough deficit cut cut and -- excited close to being fuel costs have risen 30%.
You need 900 billion dollars of tax increases or spending cuts.
-- stop debt from growing as a percent of GDP going up the fiscal -- picture about 600 billion a year on the 900 billion he needs the need even more than that.
So where the president who wants to support his spending.
Needs enormous tax increases and public opinion says he can blame those tax increases successfully.
If he goes over the -- so his threat to go over the cliff I think is very credible and the I think the Republicans -- a very precarious negotiating position because if they're blame for this.
They could lose the house and if they lose the house.
The be enormous damage done -- the economy right and that's all they have left the Republicans terms control.
Is that house representatives -- help that want to lose that.
-- two years of -- -- your math for second it's a Big Dig into this so you're -- -- -- -- hundred billion give a one point one trillion dollar deficit -- you can -- about two a year -- you -- about 200 billion dollars a year.
So that debt doesn't grow as a percent of GDP it'll grow with 200 billion a year right -- -- -- trillion dollars of debt negro to -- -- we gonna get there are so the number goes up the tables so people know last week from the Democrats.
Just on the entitlements was like 400 deal over ten year over that's forty billion dollars that's something that's nothing and -- it went of the bush tax expire cut tax cuts expire people learning to over 250000.
That's fifty billion dollar to hear this that and raising dividends and capital gains and a state taxes get another fifty billion that's a 100000008800.
Billion dollar more.
The only way to get there is enormous spending cuts.
-- are enormous tax increases but only raise one point one trillion dollars a year of income taxes we need 900 billion dollars.
To close the -- feel like an 80% across the board tax isn't even realistic certainly isn't even realistic ought to close that entire Japanese have to make of the -- is it realistic at some point you can't wed -- -- heat and well as a percentage of about -- -- happens you know I got to take a step in the right direction and this is a two -- and go cheating strategy on the part of Democrats.
Let's go get fifty to a hundred billion dollars a year.
Out of peep out of the wealthy.
And then -- negotiate on the other 800 billion so -- should recognize that's just the down payment.
And your taxes are going up from there because even if you went off the fiscal -- you still really close to a 7%.
Marginal tax rate actually bring the thing in the balance.
What do you think of this idea even if we do go -- Avoid a fiscal cliff rather.
And the tax cuts happen with Democrats want them do you think that we're still gonna fall into recession because we're not getting meaningful deficit spending cuts.
I think at some point people will grow very fearful about debt continuing to rise of percent of GDP they haven't shown that fear yet.
And that when they come to terms with what needs to get done to stop it from growing.
When the president starts to make real proposals about the kind of spending cuts and tax increases that are needed I think the public's gonna be shot and then we will go.
On the other -- the point we're not seeing any message from the markets yet.
Interest rates are still very tame we're looking at the Dow let's just down thirty points markets -- really been to enough and I guess down down now to consecutive month in a row but.
Nothing worth getting alarmed -- that first one of the bond market is -- more important.
The fact that the yen is up forcing people to make a if they were to shoot up committed itself we -- going getting I'd be careful about -- we have enormous surplus of risk averse capital so interest rates are near zero.
Nobody wants to put that money to work because they're scared that's why the interest rates are low and even though the Dow is that.
-- thirteen that thousand really only had about a fourteen -- -- still it's not that today.
Optimistic about right here and you got -- -- Europe falling apart so that's helping US market encountered.
It's always good to have you on thanks a lot thank you pay out.
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