♪.
>> LIKELY EASE INFLATIONARY
PRESSURES.
DAVID, THAT WAS JEN PSAKI, IT
WAS KIND OF CUT OFF AT THE END
THERE.
ESSENTIALLY SHE WAS QUOTING FROM
A LETTER FROM AUSTAN GOOLSBY AND
70 OTHER ECONOMISTS SAYING
SPENDING 3 1/2 TRILLION DOLLARS
ON THIS NEW SPENDING PLAN THAT
THE HOUSE JUST APPROVED OF WAS
ACTUALLY GOING TO LOWER
INFLATION.
JOINING US NOW TO HELP US
UNDERSTAND ALL OF THIS IS ART
LAFFER, FORMER REAGAN ECONOMIC
ADVISOR.
ART, GREAT TO SEE YOU, THANK YOU
FOR BEING HERE.
>> THANK YOU, DAVID, MY
PLEASURE.
DAVID: CAN YOU EXPLAIN HOW YOU
CAN LOWER PRICES, LOWER
INFLATION WHICH IS WHAT NIECE
ECONOMISTS SAID YOU CAN DO
SPENDING SO MUCH MORE MONEY
WHICH ACTUALLY PEOPLE SAY IS
CAUSING INFLATION?
>> ALSO RAISING TAXES
DRAMATICALLY AND EXTRA 3 1/2
TRILLION DOLLARS, THEY WILL
RAISE THE PERSONAL INCOME TAX,
THEY WILL RAISE THE CORPORATE
TAX, THEY WILL RAISE THE CAPITAL
GAINS TAX, THERE ARE ALL SORTS
OF OTHER TAXES INVOLVED.
THERE IS 3 1/2 TRILLION DOLLARS,
DAVID, CAN I GO THROUGH THIS
WITH YOU A LITTLE BIT LOGICALLY
FOR A SECOND?
DAVID: SURE.
>> THE KILLER TO ME IS LOWER
GROWTH.
WITH LOWER GROWTH YOU WILL GET
HIGHER INFLATION, GET A WORSE
ECONOMY BUT WHAT THIS ALL IS,
ALL THIS 3 1/2 TRILLION DOLLARS
IS ALL TRANSFER PAYMENTS WHERE
YOU TAKE FROM SOMEONE WHO HAS
MORE, YOU GIVE TO SOMEONE WHO
HAS LESS.
BY TAKING FROM SOMEONE WHO HAS
MORE, THE RICH GUYS, WHAT YOU
HAVE DONE REDUCED INCENTIVES TO
PRODUCE, THEY WILL PRODUCE LESS.
THEIR PRODUCTION WILL GO DOWN.
BY GIVING TO PEOPLE WHO HAVE
LESS, YOU PROVIDE THEM WITH AN
ALTERNATIVE SOURCE OF INCOME
OTHER THAN WORKING AND THEY TOO
WILL PRODUCE LESS.
TRANSFER PAYMENTS, IT IS MATH,
IT IS ECONOMICS.
IT IS NOT PARTISAN.
WHENEVER YOU HAVE TRANSFER
PAYMENTS YOU REDUCE GROWTH.
THE MORE OF YOUR TRANSFER
PAYMENTS YOU HAVE GREATER WILL
BE THE REDUCTION IN GROWTH.
THIS BILL IS A MASSIVE INCREASE
IN TRANSFER PAYMENTS AND IT WILL
REDUCE ECONOMIC GROWTH OF THE
UNITED STATES CONSIDERABLY AND
VERY MUCH TO OUR DETRIMENT OVER
THE NEXT DECADE.
WE WILL HAVE VERY SLOW GROWTH
OVER THIS NEXT DECADE BECAUSE OF
THIS BILL.
DAVID: IT IS NOT HAPPENING IN A
VACUUM EITHER, ART.
>> NO.
DAVID: IT IS HAPPENING AT A TIME
WHEN WE HAVE 10 MILLION UNFILLED
JOBS BECAUSE OF BIDEN POLICIES
CONCERNING PAYMENTS FOR THE
UNEMPLOYED AND CONTINUING THOSE
PAYMENTS.
WE’RE PROBABLY GOING TO CONTINUE
IT BEYOND THE SEPTEMBER DEADLINE
WHERE THEY WERE GOING TO STOP.
IF YOU HAVE 10 MILLION UNFILLED
JOBS, THAT MEANS 10 MILLION
FEWER PEOPLE MAKING THINGS AND
PROVIDING SERVICES.
>> YES.
DAVID: IF YOU HAVE FEWER
SERVICES AND SHORTER AMOUNT OF
SUPPLY OF GOODS, THAT MEANS
HIGHER INFLATION AS WELL.
>> WELL IT DOES.
BUT I COULDN’T REALLY FOCUS ON,
I DON’T REALLY FOCUS.
YOU CAN FOCUS ON WHAT YOU WANT.
I DON’T FOCUS ON INFLATION
ASPECTS.
THAT’S BAD, I THINK THAT IS TRUE
WHAT YOU SAY BUT I’M LOOKING AT
INCENTIVES TO PRODUCE.
WHEN YOU GIVE PEOPLE MONEY
WITHOUT REQUIRING THEM TO WORK
FOR IT THEY WILL NOT WORK.
THERE IS SOMETHING REAL
FUNDAMENTAL ABOUT WORK FOR MANY
PEOPLE, ESPECIALLY IN THE LOWER
ECHELONS OF WORK LABOR.
THEY ARE NOT FUN JOBS.
THEY DON’T WANT TO WORK THERE
UNLESS THEY GET PAID, MEANS
SOMETHING TO THEM IN THEIR
LIVES.
IF YOU PAY THEM WITHOUT WORKING
THEY WON’T WORK.
THAT WILL REDUCE THE OVERALL
GROWTH AND PRODUCTIVITY OF THE
UNITED STATES.
AND THAT WILL LAST FOR YEARS TO
COME.
3 1/2 TRILLION DOLLARS IS NOT A
SMALL SHARE OF GDP.
THAT IS SOMETHING LIKE 17% OF
GDP.
I MEAN IF YOU TAKE A 20 TRILLION
GDP, 3 1/2 TRILLION OF THAT IS,
WHAT 17, 1% OF GDP?
IT’S A LOT -- 18% OF GDP.
THAT IS A LOT OF MONEY.
ONCE THEY GET USED TO NOT
WORKING, WORK, ONE, TWO, THREE
YEARS, THEY LOSE THEIR SKILLS.
THEY WON’T BE ABLE TO WORK F
THEY DID WORK THEIR PRODUCTIVITY
WOULD BE MUCH, MUCH LESS.
DAVID: BY THEN BY THE WAY WE’LL
RUN OUT OF MONEY --
>> WHICH MEANS YOU CAN’T TAKE IT
BACK.
YOU CAN’T COME BACK.
DAVID: AS MAGGIE THATCHER SAID,
THE REAL PROBLEM WITH SOCIALISM
YOU RUN OUT OF OTHER PEOPLES
MONEY.
IT WILL NOT TAKE THAT LONG WHEN
YOU’RE SPENDING TRILLIONS OF
DOLLARS.
THERE IS ALSO SOMETHING ELSE WE
HAVE TO TALK ABOUT, IDIOTIC,
UNPATRIOTIC PLAN TO KILL FOSSIL
FUEL PRODUCTION IN THE UNITED
STATES WHILE AT THE SAME TIME
WE’RE KILLING U.S. PRODUCTION OF
FOSSIL FUELS WE’RE ENCOURAGING
FOSSIL FUEL PRODUCTION AND
GROWTH AND DISTRIBUTION BY
RUSSIA, BY OPEC AND THE OTHERS.
THEY DO IT IN A MUCH DIRTIER
FASHION THAN WE WOULD.
SO THE WHOLE GLOBAL ECONOMY, THE
WHOLE GLOBAL ENVIRONMENT IS
GETTING DIRTIER, PRESUMABLY
ACCORDING TO THEIR STANDARDS
ADDING TO CLIMATE CHANGE,
ET CETERA.
THAT ALSO IS CAUSING AN INCREASE
IN PRICES, PARTICULARLY IN
ENERGY?
>> THERE IS A TON OF HYPOCRISY
THERE ON FOSSIL FUELS, THAT IS
VERY TRUE.
BUT LET’S IMAGINE FOR THE MOMENT
THERE IS GLOBAL WARMING.
LET’S JUST IMAGINE.
I DON’T KNOW WHAT YOUR VIEWS
ARE, DAVID.
I SURE I DON’T KNOW WHETHER
THERE IS OR NOT.
I’M NOT AN EXPERT IN THAT AREA
BUT IF THERE IS, WHAT YOU WOULD
WANT TO DO YOU WOULD WANT TO TAX
CARBON AND THEN YOU WOULD WANT
TO USE THE PROCEEDS TO REDUCE
INCOME TAX RATES SO YOU OFFSET
THE ECONOMIC DAMAGE DONE BY THE
CARBON TAX, BY LOWERING INCOME
TAXES TO CREATE MORE INCENTIVES
TO GROW AND HAVE OUTPUT.
AL GORE AND I DID A LOT OF WORK
ON THIS TOGETHER.
I HAD A PIECE IN
"THE NEW YORK TIMES" YEARS AGO
WITH THE CONGRESSMAN ESPOUSING A
PLAN WITH A CARBON TAX, 100%
OFFSET BY AN INCOME OR PAYROLL
TAX RATE REDUCTION, WOULD LEAVE
IT NEUTRAL WITH RESPECT TO THE
ECONOMY AND WOULD ADDRESS THE
GLOBAL WARMING ISSUE.
BUT THESE DEMOCRATS ARE NOT
DOING THAT.
THEY ARE NOT DOING IT AT ALL.
THEY WARRANT THE CARBON TAX TO
GET THE MONEY.
DAVID: WE HAVE TO GO.
I JUST WANT TO ASK ONE FINAL
QUESTION.
ISN’T ALL OF THIS FAR MORE
DESTRUCTIVE THAN WHAT WE SAW
DURING THE OBAMA ADMINISTRATION
WHICH DID, THEIR POLICIES LED TO
THE SLOW OF THE ECONOMIC
RECOVERY ON RECORD OR AT LEAST
SINCE WORLD WAR II?
ISN’T THIS A LITTLE WORSE THAN
THAT IN TERMS OF WHAT THEY’RE
DOING WITH POLICY?
VERY QUICK ANSWER.
>> IT IS MUCH WORSE.
IT IS MUCH, MUCH WORSE.
IT WILL LEAD TO A LOT WORSE
CONSEQUENCES OVER A LOT LONGER
TIME PERIOD.
DAVID: ART LAFFER, GREAT TO SEE