Escalating terror attacks by the Islamic State, including last week's mass slaughter in Paris, are eroding the world economy — and something must be done quickly to stop the financial downturn, Steve Forbes, chairman of Forbes Media, tells Newsmax TV.

"Those terrorist attacks are having a demoralizing impact on the countries of Europe," the financial publishing czar said Tuesday on "Newsmax Prime" with J.D. Hayworth and Miranda Khan.

"It also underscores the fact that Europe's refugee crisis looks like it's going to have political repercussions — that kind of uncertainty is not good for economic growth. It's just like the late 1970s. We're in malaise right now and we need to pull out of it fast."

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Forbes, a two-time Republican presidential candidate, believes the global economy was already in trouble due to the bad economic policies of a number of nations.

"The global economy is in a slump. Some countries are in official recession, others are in a very real slowdown. The United States is still stuck in second gear, growing at 2-2.5 percent," he said.

"And so you look around the world it's hard to find any place that is doing well right now and that's a result of bad economic policies in too many countries including the United States."

Forbes also sees oil prices continuing to go down over the next year to two years.

"You have supply, the dollar is strong, global economies are not moving ahead so you're not going to have much demand. The consumers are happy at the pump but unlike the 1980s when we had a real fall on oil prices, we don't have the policies in place now that enable the rest of the economy to really boom," he said.

"Remember the 1980s? Texas was in a depression but the rest of the country, most of the rest of the country was doing extremely well. We had tax cuts, we had deregulation, some reigning in of spending outside our defense, rebuilding our defenses. It all worked. We got to do something like that again."

Forbes said he still favors a flat tax plan for the United States — something several GOP presidential nominees are promoting, including former Sen. Rick Santorum of Pennsylvania, Sen. Ted Cruz of Texas and Sen. Rand Paul of Kentucky.

"The others should get theirs down to a single rate…. If you have more than one tax raise it's like putting two rabbits together — they breed, they multiply. We got to get a simple system," he said.