A new CNN/Money survey of 31 top economists found a majority of them say the top priority — given the weak state of the economy — is for Congress to extend the Bush tax cuts for all income groups. But talking about this policy recommendation with CNN/Money’s Paul La Monica on Monday’s American Morning, co-anchor John Roberts rued the conundrum of needing to keep tax rates low for economic reasons — putting “more money in the pockets of people” — while at the same time, because of the “frightening” trillion-dollar deficits, “you’ve got to bump up your [the government’s] revenue stream.” Roberts fretted:
You want to put more money in the pockets of people, particularly when you look at unemployment over 9 percent. But then at the same time you have these deficits that are running at an absolutely frightening rate of a trillion-plus dollars a year. So, you’ve got to bump up your revenue stream but at the same time you want to keep your money coming into the economy. So how do you reconcile that calculation?
It seems not to have occurred to Roberts that the way to avoid either monstrous deficits or suffocating tax increases is to reduce government to a more affordable size.
Looking at the details of CNN’s survey of economists, it’s understandable why they would want the tax cuts extended. Their average forecast is for unemployment to be just below 9% at the end of next year, a full fifteen months from now, with a quarter of those surveyed seeing the unemployment rate still at 9.5% or higher in December 2011.