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Forbes Media Chairman Steve Forbes: Payroll tax increases are not the cure for economic woes.
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-- -- joining us now is Steve Forbes chairman and editor in chief of Forbes media thank you for being with us and you just heard Jeff.
Talk about how but most Americans have lost money in their their paychecks if you make 65000 bucks here.
That's thirteen hundred dollars less this year you have because of the payroll increase.
We're seeing -- trickle down into the economy and not a good way.
Now.
And that when you combine it with the other tax increases of January which was posted just the rich you're hurting both capital creation and -- consumption.
And it's so it's no surprise the first quarter's going to be very troubled one and he wondered looked at these tax increases new they're gonna bite.
And now they are biting people are feeling it.
So the idea that tax increases of the cure for economic woes.
We see that it's not working in Europe not working in Japan and manifestly were starting to see it's not working here -- mr.
-- you just mentioned something that I was asked about earlier might we be headed.
Voluntarily because of our government policies and tax increases.
Toward another recession.
Well whether you call it recession I don't think -- be a full blown recession.
But will be like walking pneumonia bad case of flow you may not be bedridden but you certainly don't feel very good about it.
And this is not a sign of a healthy economy.
And now we're going with this that another kind of fiscal cliff with sequestration.
And talking about more tax increases so I wish the world would learn.
As -- should've learned from times past the when you have a weak economy piling on new taxes not the -- get people back on their feet again so.
We understand how that's translating to what we weakness on Wall Street for instance today we see stocks rising today.
We're gonna flirt hopefully with 141000 we have been able to really hold it.
But if the economy's -- and people are spending less it would seem to -- now's the time to take money off the table.
Well I'm one of those who don't like stock market timing because you never do it right for very long you get whipsawed.
But if you look at stocks over the years and that's what you should do markets in real terms of gone nowhere since the late 1990s.
And so yes we get these bear market rallies like we did in the 1970s.
But in terms of long so long run.
Were falling behind not moving ahead so well the wealth of the nation is now being consumed by Washington.
People are now recognizing their paychecks are being shrunk by both inflation what's the government -- states and by higher taxes so this is a formula for stag.
Nation not only stagnation but might we see I think economists call -- a deflationary spiral at this in simple English.
Bad news creating more bad news for instance Burger King is dropping the price of a whopper sounds like good news but when retailers start cutting prices it's almost like asset prices might -- -- come down.
Well and the Federal Reserve by its zero interest rate policy which is a form of book price control rent control.
Is making it very hard for small on incorporated businesses despite all the happy talk they're still having a hard time getting adequate lines of credit.
Which is also a downer for the economy's on the name of helping us government is hurting us both with the Federal Reserve and what the federal government is doing with taxing and spending.
But is -- the words we should fear we're from the government and we're here to help you -- for just.
