Brian Wesbury is chief economist at First Trust Advisors and served as chief economist for the Joint Economic Committee of the U.S. Congress.
In an exclusive interview on cnbc.com’s home page, the "optimistic" forecaster talks to CNBC’s Joe Kernen about tax hikes – and other acts he says cause recessions.
Wesbury offers a streamlined model of what economic policy-makers do right and wrong. He noted that after the Sept. 11, 2001 terror attacks, “risk and reward got out of balance,” requiring action to be taken – and he says the best solution remains to “lower risk and raise reward,” via tax cuts.
He maintains that reversing the post-Sept. 11 cuts would constitute one of the largest tax hikes ever. “There’s a huge (U.S.) investor class – CNBC and cnbc.com feed it every day – and investors don’t want to see tax policy return to the 1970s, or France.”
Turning to the Congressional power shift in the cards for January, Wesbury remains hopeful. “Even the Democrats” don’t want to reverse gains, he maintains, adding “even Clinton” signed a capital-gains tax-rate reduction.
The economist underscores what he sees as the four essential causes of recessions: bad monetary policy; tax hikes; government missteps in spending or regulatory policy; and protectionism. But Wesbury is “still optimistic” that smarter choices will be made: “If the Fed goes to six [percent] and stops, that’s just right.” He remains convinced that the U.S. is in for “four or five more years of solid growth.”