Last week, Media Matters released a report detailing the lack of economists on cable evening news programs during the debt-ceiling debate. In the month prior to Democrats and Republicans reaching a compromise, only 4.1 percent of guests brought on to discuss the issue were economists. MSNBC's Up with Chris Hayes wanted to "rectify that," and on Saturday, the host brought on Robert Frank, who, Hayes noted, "is an actual economist." Frank is an economics professor at Cornell University.
Hayes asked Frank about the tax debate and President Barack Obama's proposal (which would raise revenues by instituting a minimum tax rate for individuals who earn more than $1 million), and Frank responded that "the President's proposal makes good sense." He added that "you can't imagine how we could possibly balance the budget without additional revenues."
In the face of calls to reduce government spending in order to balance the budget, Frank further stated that "every president in my lifetime has campaigned on a pledge to reduce wasteful government spending" but that "spending went up in every administration" anyway. He concluded, "I think without new revenue, there is no hope to balance the budget. We have got to talk about where to get new revenue, not whether we need it."
Hayes then played a clip of Fox News host Bill O'Reilly claiming that an increase in the marginal tax rate for high-income earners might dissuade them from working at all. O'Reilly said, "If you tax achievement, some of the achievers are going to pack it in."
To this, Frank responded:
The idea that if you raise the tax rate at the margin -- not on every dollar you earn but at the margin on the highest earners -- from 35 percent to 40 percent that the 40 vice presidents at a company would suddenly start playing golf on Friday and not coming in trying to ascend to the next job on the corporate ladder: That's a fiction. There are lots of rewards for doing good work other than the extra dollar you get. People get extra dollars as long as the marginal tax rate isn't 100 percent. We're nowhere near that margin of choking off effort for people at the top.
Unfortunately, such expert opinion from real economists was sorely lacking in the debate leading up to passage of the Budget Control Act, a deficiency that only left the public misinformed on the issues at hand.