Prof. Prescott speaks on policy

Nobel Prize winner Prof. Edward Prescott of Arizona State University had the following to say regarding the effectiveness of the tax cuts initiated by President Bush:

Prescott, speaking from Minnesota, where he advises the Federal Reserve Bank of Minneapolis, described Kerry's plan to roll back tax cuts for top wage-earners as counterproductive.

"The idea that you can increase taxes and stimulate the economy is pretty damn stupid," he said.

Bush's campaign on Monday released a letter signed by Prescott and five other Nobel laureates critical of Kerry's proposal to roll back tax reductions for families earning $200,000 or more.

In The Republic interview, he said such a policy would discourage people from working.

"It's easy to get over $200,000 in income with two wage earners in a household," Prescott said. "We want those highly educated, talented people to work."

Prescott also gave Bush the nod on another controversial campaign issue, dismissing Kerry's claims that outsourcing of jobs is damaging the economy. . . . Prescott also backed the idea, espoused by Bush, to reform Social Security by allowing some workers to place a portion of their payroll taxes into private savings accounts.

Read the whole interview.