Congress is deadlocked with another bitter debate over tax cuts and government spending and economist Jeffrey Sachs says his profession is partly to blame.
Economics, he says, has been wrong on taxes and government for the last 30 years. Relying on the theories of free-marketers like Frederich Hayek and Milton Friedman, most economists approved lowering taxes on top earners and deregulation of industry as a way of fostering economic growth.
The result, says Sachs, has been a disaster — "the U.S. is unilaterally ceding its global leadership in education, science, and infrastructure." Sachs is critical of both parties, saying of President Obama, "His entire economic program rests on a fiscal fallacy," because the President promises continued low taxes even as he talks about investing in America's future.
Sachs says America's economic problems cannot be solved by tinkering with monetary policy at the Federal Reserve. He says it will take significantly higher taxes and a more active government to restore America's economy and culture.
Critics, like Republican Congressman Paul Ryan accuse Sachs of wanting "to replace the vision of [America's] Founders."
- Jeffrey Sachs, economist and director of the Earth Institute at Columbia University. His new book is "The Price of Civilization: Reawakening American Virtue and Prosperity"
This segment aired on December 19, 2011.