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How Can DC Get Past the Fiscal Cliff Gridlock?

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    Forbes Media Chairman Steve Forbes on the fiscal cliff negotiations.

  • Duration 6:30
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And into the deep.

For more we turn to a man -- been warning us all about the folly of this for some time former presidential candidate and chairman of Forbes media.

Steve Forbes so Steve it.

-- -- any doubt that if we do go over cliff will go into recession.

I think the economy's going to be in a slow down anyway already business decisions have been put off David.

Because of the uncertainty surrounding this not to mention what's going to be happening with Obama care.

So well we're in for some rough waters anyway.

-- about the Titanic.

The question is have people would be if we go over the cliff -- -- couple weeks before they reach -- deal with a -- -- make it retroactive.

Well they go few more weeks is present Obama feeling a such a strong hand.

He just browbeat the Republicans and make them -- come crawling back which is why I think he thinks he can do right now.

Because in terms -- revenue.

Even if the president got his way it's about five cents on the dollar we'll talk about that in just a second but I wanna squeeze you'll bit on this because there are a lot of economists who specifically say yes if all taxes go up there's no doubt we will go under recession because there will be less spending -- the producers will have less money to hire people everybody will.

Will keep all of their money in their pockets well if if if short term the overlook the damage done to our military by the so called sequestration.

That -- reduction in overall spending we'll have a little bit of a good impact but no there's no question.

We're following the path that -- purpose followed that Japan has followed.

Raising taxes in the face of a wobbly economy we have done anything like this on the scale since the early 1930s even the president admitted not too long ago that the last thing you -- -- do and a slow economy are certainly in the recession is to raise tax rates this is all about ideology and reducing what they think -- income inequality.

-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- do we did eight years ago.

Lower that tax to say five or six or 7%.

Have -- -- -- eight years ago we got -- several hundred billion return to the united -- not gonna -- -- we've asked his advisor Gene -- and others on this -- I haven't -- -- absolutely not -- -- and why -- Republicans hammered -- that the -- Republican -- -- -- what's the answer -- -- good question -- on imaginative leadership the whole bunch of them because their focus in this beltway mentality of how to -- the other -- without -- of long term implications on us and amazingly allowing -- present to define the terms of debate -- may define the terms they saw this after the election they knew what was coming up.

Instead like sheep that discover the house slaughterhouse help they're not -- too much.

They don't go to the slaughterhouse they send us to the slaughterhouse that's a problem and what happens -- recession you know the president's talking about how much.

New revenue he needs -- most he will get from from taxing all the rich people assuming they don't move their money the Cayman Islands or -- is about a hundred billion here look what happened.

-- look what happened at 2009 when we did go into recession look what happened to the revenues.

They went down put that up on the screen if -- can the revenues 2009 -- went into recession.

We lost 400.

Billion dollars in one year and we didn't regain it until 2011 and we still haven't regained the amount we had in 2007.

Because we're growing so slow.

But if we have a recession.

We have a 400 billion dollar loss to the treasury.

The president is going to be even more in debt that we are now.

This is where the Republicans -- -- huge opportunity the Republican should have said this should be debate about whose taxes get raised the should be debate about how do we get American economy.

Moving forward again.

That that should have been the debate.

And when you look at this kind of nonsense you see how foolish it is if we had a normal economy we have about 500 billion -- and revenue today.

Which would cut the deficit almost by 4050%.

-- Steve -- what doesn't what is the most we can hope for from these guys because.

-- are gonna be working over the holiday over the New Year's holiday well it.

If -- -- know what you want you want a flat tax and certainly I know I know -- wish list but what's the best we can hope the best we can hope for is that all realize that they're gonna get all the -- so therefore for once kicked the the can down the road cannot -- the tax code 72 hours between now New Year's entitlements and everything else.

So put off for sixty days and then sit down try to do something on the begin to do where real reformation the tax code.

But to allow us to -- -- the fiscal cliff is just for -- when you say a sixty day hold does that mean the presidency because the president is saying we should at least.

Make sure that taxes for those making under 200000 dollars doesn't go up but everybody else's -- -- -- what what they should do is just.

Put everything off -- for sixty or ninety days everything and then sit down after New -- and say okay how do we get this economy moving again.

And I think it's -- -- be clear early next year we're showing slow down.

Republicans should hammer home.

About economic growth and most Democrats at the end of the day would be willing to have left -- reform of the tax code we take -- preferences.

And lower tax rates across that the president is Markus he did say so by the way he said so back in July of 2011 he said.

Give us one point two trillion in additional revenues which could be accomplished without.

Hiking tax rates and then in September 2011.

-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Now he's back to the old mode.

And we're -- paying a price for final question is there any way we grow with the president who's not -- sign on to anything but higher tax rates for the rich.

At best we'll have a stalled or gone ten miles an hour and a superhighway.

So you're not investing in -- year money.

I'm long term I'm not gonna try to time this market because when -- -- it's going to be sudden sharp.

Don't let emotions get your way America always comes through with these things may have to wait a year to remember the seventies dreadful decade than we -- a fifteen fold increase in the Dow Jones average in the eighty's and ninety's let's have faith let's hope for comes back I do graphic is Steve Forbes -- faith -- you thank you very much for coming -- -- your body very.

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