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Former Reagan Budget Director David Stockman on what is needed to rein in the government’s debt.
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And let me tell yet here we are in the business network talking about raising taxes are you crazy what -- -- we raised.
I think there -- we have to we need to have a consumption tax in this country.
In order to pay our bills.
We can't continue to borrow one point three trillion yes we should reform Social Security means tested for the better off.
We need a huge cut in defense it's way too big given that minimum threaten world today say -- but I even if I'd love but if you do all that is still not come up with enough.
We could get rid of departments like a Small Business Administration we don't need get rid of the entire Energy Department majesty's Green.
You know loan guarantees and boondoggles get rid of the whole thing and still unfortunately you would need to raise revenues.
But until we face the fact that we are broke.
That we had a near death experience a month ago when they couldn't pass the debt ceiling and why doesn't the White House learned that what.
You haven't you learned the super committee because a lot of people -- are banking on the super committee.
To comment to make draconian cuts maybe go for the big Kahuna more than there are parts of those -- but -- trillions of dollars.
I would like to see them try it but I think that politics have been so polarized.
That it's not going to happen.
The Democrats have said not a dime not a Social Security it just spent last year's sixty billion more than it took him.
How can they say that's not a part of the problem.
The Republicans say not a dime of taxes and then the president comes out -- -- revenue raising and a class war.
So we have a totally non functional or -- functional.
Governance process fiscally we have really in this is very difficult to say but I think it's true a doomsday machine hurtling forward.
Borrowing money at a rate of five.
Billion dollars a day and there is no prospect that either party or our political system can get its act together for -- -- I sat NASA satellite you didn't know where it was gonna fall or what would happen to it.
I want to go to listen to you something that senator Pat Toomey had to say he's a member of the super any any any thought about this a lot here's senator.
How my own personal hope is that we will do something on the tax front because I think the most pro growth thing we can do would be to reform the tax code simplify and -- rid of some of the -- deductions and special interest loopholes and lower marginal rate so that we would have.
-- the surge of investment in job creation and growth so.
I'm hopeful that will be able to take a serious look at the.
So talk of reforming the tax code in a big way this week we're talking about raising taxes on millionaires the so called -- tax are you in favor that you just said some tax as should be.
Yes I think we should raise taxes on billionaires and millionaires.
On the affluent in on the middle class two.
The fact is we have to pay our bills and there isn't a core -- guard.
In the congress in either party including the Tea Party.
-- for the magnitude of cuts that you would need only on the spending side in theory I agree cut spending.
But we don't run our budget in theory we run it in a democracy in if there isn't a consensus at the end of the day.
For the level of spending cuts that needed.
That are needed then we have to raise revenue -- pay -- bills sell I agree that we need to tax the rich but we also need a broad based consumption tax.
In order to Payer bill.
-- the argument against that of course is that the rich already pay their taxes they pay a lot of taxes the most taxes more taxes than anybody.
And about half of the population pays no taxes at all how do you respond to that.
That is true if you look at it narrowly but actually the big problem today is that the -- low rate to be abnormally -- lower rate on capital gains and dividends.
We tax it at 15%.
The bus driver gets taxed at 35%.
Counting payroll and income so I think one of the things we could do in line with what buffet is saying.
Is basically tax all income the same get rid of the preferences get rid of the loopholes.
And there really is no more virtue in making money speculating.
In some real estate than there is going to job every day and earning a paycheck.
Maybe not anymore it may be can't claim have a claim to fame like Warren Buffett however you might be somebody saving for retirement right might be setting money aside.
And then harvesting that those are not the people we want to penalize with a 35% tax hike due -- -- but on the other hand those are the so if you tell their retiree EM the thrift the American you're gonna earn zero.
I'm your savings account and -- we're only gonna tax and at 15% they don't care.
The fundamental problem is that we have a monetary policy that is totally destructive in its part of the reason why our economy.
Is in such deep trouble and sat back voice of reason -- a world gone crazy.
Thanks for coming on the show really appreciate it.
