Roundtable: Grading Cain's '9-9-9' Plan

George Will, Margaret Brennan, Laura Tyson, and Jonathan Karl.
8:49 | 10/16/11

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Transcript for Roundtable: Grading Cain's '9-9-9' Plan
This week occupy Wall Street went global from Rome to Paris to new York and across the United States. Thousands have been running against corporate greed and government dysfunction but also their fears about the unemployment situation. Their collective voice now tuned out to be dismissed and that -- yet another symptom of the crisis which -- this country and the world. So where does that leave the policy debate joining me again George Will. -- televisions Margaret Brennan. Laura Tyson who's a member of the president's jobs counsel and former Clinton administration. Economic advisor and ABC's John congregants. Thank you very much again for being hit -- -- You -- down a Wall Street every single day what are people inside the stock exchange making of what's going on outside was. Interesting because I'm -- -- sack exchange everyday and I went down to talk to the protesters on Friday. And the frustrations inside and outside are similar 45 million Americans on food stamps fourteen million Americans unemployed. But inside of Wall Street. They're more angry at what's not happening in Washington the lack of clarity of the lack of momentum and outside. -- sort of attacking the symbol of banks and the symbol of money. And -- it's not quite clear what -- Asking for but the frustration is something that that people are definitely noticed. Well vent frustrations the Wall Street bankers frustration about what she didn't yield on the president's jobs council. What is going to happen I mean what is going to make. Some kind of impact in this jobs crisis right now. Well you know that -- act that just went down to first round defeat that you talked about in the earlier segment. Has been evaluated by very large number of economists and they have said repeatedly He could actually have an effect it could create a couple million jobs next year. It could increase the GDP growth rate a couple percentage point to reduce the on the -- by eight percentage point this is a serious plan. The parts of the plan that are the major parts payroll tax relief infrastructure unemployment compensation with reform. These -- things that have been supported. On both sides of the -- historically a real plan that comes with bipartisan sport it's a tragedy. If that plan. Does not happen because it's it's a serious effort evaluated have a real effect. Even Mark Zandi it seems in the White House favorite economist -- -- but we only. Has suggested that yes it would have an impact in the short run but not in the long term there will be a drag on -- -- His next year without it the thing about next year -- -- -- twelve. Next here because of what's -- in the books -- the government will be taking out of the economy. Nearly two percentage points the economy is -- is -- on the brink of recession the that a double dip recession the probability of recession -- group of economists think is about 30% if we don't do something for next year. Government policy will actually increase the odds that we -- into recession increase -- let let me ask -- -- Because you know business -- are getting very -- including people in the democratic -- like Mort Zuckerman who had an op Ed in the Wall Street Journal this weekend basically saying. That He is business need to colleagues and friends are beginning to think that this government's policies a -- in this regard what do you see if -- what do you see happening for instance excuse this time the next -- -- -- -- -- Well -- a political convulsion if we start. And recession started a reception at one point 1% unemployment sixteen and a half other unemployed. Partially employed are too discouraged to seek employment running 2% of mortgage holders under water at this appointment it's astonishing place to start a recession. I think this one. Potential plan if you can call -- that -- occupy Wall Street that's about to go mainstream and that's debt repudiation. You see it now from some of the mainstream economists these -- the same geniuses by the way who said their protest the stimulus and we would have unemployment at 8% or less. And -- -- your -- remains stream economists say we need just a little bit of inflation and a narrow band and four to 6% just for a little. Now that the behind this fatal conceit that they can control inflation of just a little bit of with the thermostat -- an -- -- -- Inflation is debt repudiation. It's just the civilized and surreptitious way to get out from under -- and you hear you have them. The big number that that. Occupy Wall Street is preoccupied with his one trillion dollars in student loan debt right. YouTube and social combined for them the convulsion when it's kind of already sort of -- and Wall Street and around the world. What's the single biggest problem -- clouding the jobs picture I mean you've been quoted -- -- There are a lot of jobs but they're not the skills to match the job I think -- to be careful of that I do. Agree that there's a skills mismatch but I also think the predominant problem for -- plan right now is the lack of spending it's a lack of demand. Consumers are on their backs the savings rate is going up they have a lot of debt they can consume their worried about their jobs they don't have jobs they can consume senate and the economy it was the engine of growth it's it's off it's it's -- running at a very low. So it's demand in. I think that the skills issue is very important because as your thinking about what to do now to create jobs He want to deal with the skills problems going forward. So that's why -- the president's council on jobs and -- in this one of things we're focusing on. Is essentially programs to build advanced manufacturing skills or health care skills -- to build more engineers. That creates jobs now creates capabilities now but it also deals with the skills mismatch going forward but -- just ripped for spending right now. Spending right now in a wing which benefits the economy going forward. That's I think what we need to do that -- so I think infrastructures so. You how corporations saying you know we. Could hire but. We don't have people who have the skills that we want why aren't you not protesting outside Wall Street went to purchasing at universities. And the issue is confident it is it great one. For a corporation to take someone on a key -- and take on that they need to have the confidence that. We're not going to stand the precipice of recession and arguably conversations in Paris in the G-20 this weekend. Are huge part of restoring confidence -- saying we're not and allow for another banking crisis to affect all of Europe and the -- And -- -- of the jobs those towing companies who would hire I mean it's you get a better tax credit to hire somebody has been unemployed for six more. In additional tax -- to hire a veteran. It -- -- would be a little exaggeration most of it lets think about that analysts 200. And about 1070 billion -- general payroll tax relief about a hundred which has. Passing and I think -- actually a good chunk of that I mean net. What will pastors bipartisan support for the payroll taxes by person's sport for some infrastructure which makes you wonder why we spent more than half. Debating a bill -- no chance of passing its forms and let me ask is because one of the economic sands is the 999 kind of Herman Cain I spoke to a couple of weeks -- on this program and this is what He said about. The sales tax portion. You told about 9% corporate 9% income tax and a 9% national sales tax gets an economist as saying that -- could actually disproportionately. Affect. Poor people African Americans and also -- -- people. Asked them to do to man. Well look all of these sales tax part of the plan we did do the math the planned that currently five states without their -- sales taxes including New Hampshire. So on McCain's plan all of those people would go from paying nothing to paying 9%. McCain's tax would be an additional burden in states with sales tax is already on the books. And the -- is that 26 states with current sales taxes. Or about 6% so on McCain's plan that number would sold to at least. 15%. So it's catchy. But is it really something that's gonna want George. The danger right now -- -- -- The United States' economies driven by consumer spending which is fueled by consumer credit. On the other hand the American people consume too much and save too little. Much do little we gotta save injured 9% the 19%. In the -- his. In 2005 the savings -- went negative. The consumption went on because people took out home equity loans in the sure and certain confident that housing prices never decline that didn't work out some. The other on the math doesn't add -- Bloomberg crunched the numbers that comes about 200 billion dollars short -- revenue unless you keep part of the current tax structure which is. Excise tax on beer and cigarettes and if you act. Exempt he's had used goods. Which I get -- the home and car.

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