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Brian Wesbury of First Trust Advisors sounds off on federal spending and the consequences of not reaching a debt ceiling deal.
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Now with tax hikes back on the table Republicans balking at any idea of attack -- was like well congress has we've been talking about will test this deadline.
Former treasury undersecretary.
And was uninteresting and every he thinks that's a bad idea curious.
Let me say -- I'm a Republican who served as undersecretary of the treasury for the first President Bush and I had I manage the debt limit.
And those who those who take the position has not ruled that letter -- -- -- and I look forcing their studies.
Believe me it's a real deadline it's a real deadline and and we presented this to people over the hill.
I haven't had anybody look at our numbers and say oh this is all pretend it's not pretend you have to be honest about the risks you run in life.
That's not to say don't take risks but our art contribution dialogue is to say here's what it is in reality as opposed to.
30000 -- rhetoric that brings Brian -- -- very back with this chief economist at first trust advisors.
We talked to Jay brought -- I said while we gotta get Brian back on because he's been saying.
We -- very -- -- let's play chicken with the debt ceiling is basically that your position and is not too dangerous what are you say.
Well I I think really what he was talking about was whether this is -- true deadline or not and I say.
That that there is -- they've he has one problem and that is that we were told that the deadline was back in May.
And then they moved it to June and ended July amount August you know so.
So that's one problem that they did the side of -- you know you have to get it done because we're gonna go into the of this crowd has.
They've been playing games would -- the deadline them.
-- second thing is yes we will absolutely hit a wall at some point where we can't borrow we can't shuffle.
There's no more room.
Anymore and I guess that's my point it's like we want government to face that deadline because -- if that's the only way to get.
The fiscal house in order to cut spending that that's what needs to be done we have to cut the size of this government.
And it and they all keep focusing on the deadline I want them to focus on spending get it down.
Because government's too big it's hurting our economy today.
-- but you say it would last time we talked to you we are talking about whether or not we need to get this done by.
A certain point or else and the treasury secretary's point has been that it could be -- you know cataclysmic event and and you know did not Powell did what his group bipartisan policy center did is they put some numbers to it they say we have about eighty million bills.
Per month the government does thirty million would be unpaid if we don't get it done by the second of August death of 44% drop in federal spending.
So there would be real consequences even if we can pay the interest -- our debt for a certain period of time.
-- real consequences if we don't get this done so we have to get it done by August 2 dealt with the fair.
Well if you look at if -- I mean it all depends on how you how you look at -- if you think government should pay every bill that they've always promised to pay.
I mean.
No Child Left Behind -- the stimulus bill they spent like drunken sailors back in the Bush Administration.
They've done it again in the Obama administration.
And all they want to do is be able to pay their bills of course that's what government wants to do.
I'm out here in the private sector I pay the taxes we pay the taxes to fund government.
We think they're spending ought to get -- so I don't wanna focus on this deficit I don't wanna focus on who's not gonna get paid by the way.
Private sector companies had to make payroll reductions had to cut -- had -- fire people had to go bankrupt because of this in this most recent economic problem is government the only thing.
They can't get cut I just don't buy that but I think if they don't.
-- he'll cut its -- and they cut spending 5560%.
And in August as this projection goes -- -- said.
34% overall drop in federal -- that if those types of spending cuts are put in place is real economic consequences of that.
It you know if they have to cut by that much.
Because they're forced you don't they don't get a deal done.
I mean there's no doubt I mean I could make up kind of issues you know Hillary you know those orange cones that are all in the middle of the highway.
-- these federal dollar construction projects.
I mean those -- would just be left there in some cases right because we wouldn't have any money and so yes it would affect people's lives.
We would have a layoffs we would have all of those kinds of things by the way nothing -- private sector companies didn't go through.
There's houses that haven't been finished there's the office buildings that are still sitting.
Halfway built so this is happened in the private sector I don't know why couldn't happen in the government sector to.
But he but but more importantly to this if we if if we go back in history look at World War II we cut spending by 40%.
In one year between 1945.
In 1946.
And consumption and business investment the private sector actually exploded upward at that time.
Yes government shrunk dramatically but the private sector exploded upward I think that could happen again if we were to cut spending.
As dramatically as we really need to to balance the budget all right Brian always get a -- Brian Wesbury says get it done it cut the spending thanks level talked against.
