Bartiromo Predicts Bush Tax Cuts Extended, Worries U.S. Not on the 'Ascent'

There's a lot of uncertainty with the U.S. economy and a lot of its recovery hinges on some key policy decisions due from the federal government. 

On CNBC's Nov. 2 "The Kudlow Report," CNBC host Maria Bartiromo discussed her interview with former Chairman of the Federal Reserve and Obama adviser Paul Volcker from the Global Financial Leadership Conference in Naples, Fla. One of the topics Bartiromo reported on from the conference was the possibility the Bush tax cuts would be allowed to expire, which she insisted is unlikely.

"Now the question is, will they back away from allowing the Bush tax cuts to expire," Bartiromo said. "This is a critical issue here and a lot of people are talking about it. I spoke to somebody today who said to me, ‘You know, I can't imagine that they're going to allow it to expire at the end of next year. It's just going to, you know, stop any economic recovery. And it's also going to make things very tough next election. So we'll see about that, but I think this whole issue of taxation is something that people are not necessarily something people are reading right because the numbers just don't add up. You're not going to get the revenue you need in order to truly put a dent in the deficit by only focusing on higher taxes for the highest earners."

Later in the segment, Bartiromo asked "The Kudlow Report" host Larry Kudlow if he thought the country was on the ascent. Kudlow lamented what he has seen out of the federal government and said the country wasn't - an assertion Bartiromo agreed with.

"I don't know if I can answer that because I fear, personally Maria, that America is not on the ascent, even though I love this country and I believe in free market capitalism," Kudlow said. "But, I'm not seeing free market capitalism."

Bartiromo also expressed her disappointment in the administration's lack of desire to strengthen the U.S. dollar, a policy decision she blamed on there not being a currency competitive enough to be a global reserve currency - hence the lack of "urgency."

"It is troubling and I think there's really been no movement whatsoever to protect the dollar," Bartiromo said. "I just think that at this point we all should really know that the facts - and that is I don't necessarily think we are going to see any move. You know the reason is, is there really aren't many alternatives right now. I mean at some point, sure - we could see a basket of currencies as the reserve basket. But you know, over the near term, I guess there isn't an alternative so there really isn't the urgency there to really actively move and support the dollar."

Kudlow, who is also trouble by a weakened U.S. dollar, pointed at how the dollar is being used in the carry trade, which is when a currency with a relatively low interest rate, in this case the U.S. dollar, is borrowed and used to purchase another currency yielding a higher interest rate. According to Kudlow, the 0 percent target Fed funds rate is behind the climb of world stock markets.

"What troubles me Maria is it's fishy and it's just unholy to me that the dollar carry trade - we used to talk about the Yen carry trade - you know weak currencies are involved in carry trades where you can short them and use the cheap money to buy these other assets," Kudlow said. "This just doesn't sound like an American story, Maria. And I wish the Federal Reserve would step in and do something."