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Former Reagan Budget Director David Stockman on government gridlock and the tax increases set to take effect on January 1, 2013.
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Next guest says housing is bad.
But what's going on Washington's worst former Reagan budget director one of our favorite -- of his show.
Because both sides this right these horrible things about it but I think he's a great American and a great painter David Stockman.
He says that unless DC deals with the looming multi trillion dollar tax bomb.
And all this exploding spending -- debt.
Letter Republican or Democrat conservative or liberal everyone for a -- good to see if.
Well that's that's -- sad state of affairs but I think each day it's becoming more evident that it's true now some of the numbers are getting out there.
-- even the CBO report which share was out last week.
Very tepid -- put on the table the extent the magnitude of this on our run rate annualized basis.
700.
Billion dollars.
5% of GDP.
Is going to hit the American economy like some kind of fiscal asteroid.
On January 1 in terms of tax cuts that expire the -- Questar.
Spending program.
I don't buy it's exactly and I look angry and they don't address it -- added on a bad hearings on this -- JPMorgan nonsense.
Which is two million dollar loses half of what we go deeper into debt -- -- Why it seems like they've got their priorities screwed up.
Well I I think our economic philosophy is gone way off the deep -- in this country in the early eighties we actually said how do we free up.
Liberate the private sectors of the economy can do.
On its own two feet what's possible.
People who do -- -- free enterprise system we didn't say Washington has the micro manage.
Over C.
Control.
Every movement of the economy by the week -- month -- -- but that's where both parties are now so they're talking about who can create the most jobs that.
What do you think happens -- the India -- all this stuff expires.
I mean would be a lame duck session that extends on -- for a brief period of time what.
Well I think it's gonna be a lame duck session and is going to be -- had almost never work -- equivalent of anger made on the table because if they do extend all the tax cuts which I think they will for a few months or if they do not delay this seaquest.
If it's Romney's elected there they're gonna delay -- -- -- -- -- Well no the point is they won't be able to because you need a massive increase in the debt ceiling.
In order to accommodate the massive borrowing which will be necessary after January want -- Republicans win the white -- what's the hypothetical -- bit -- and they take the senate as -- that now I know this is pushing.
Diligence Willy Nilly raise the debt ceiling without any comparable spending cuts and and -- -- assessments -- The Republicans well I think it'll be very hard for them to find the votes.
To extend all the tax cuts do nothing about spending which is really what the Republican position is despite all their speeches -- defense spending.
We do nothing about spending you say -- only slow secondarily the growth.
Barely slowing but the big programs like Social Security they shy away from they won't even men aren't getting warm you're ilk and thinking.
Then Democrats because at least today.
Talk about it.
Well certainly they raise the rhetoric OK they wave their arms they agreed that we can't bury this country and future disappears let me get mad at you did they -- used to quickly raise.
Taxes.
Well they've thrown in the towel on everything Social Security as I said needs a means test now not thirty years from now what I did all that they would not to liquidation on -- know that if they did that they might not have to raise taxes but there isn't you know corporal -- Republicans advocating look at what's happened recently.
There was a vote on the simple thing of raising the interest on student loans that are paid for by the treasury.
From three and a half to six and a half percent which is a low rate.
Given the default.
Given the fact that there's a trillion dollars in student loans out they're ready and we're burying America's student.
Generation debt the Republicans couldn't even see their way clear to say we're gonna draw the line let that interest rate girl go up automatically.
Instead they voted they folded like a -- share voted to let the it.
Keep the interest rate -- both parties.
I don't I am dismayed.
-- actor and as such as you're right the way things are -- then what happens.
What I think is we have a constant fiscal crisis they delay everything for a month -- -- extend the tax cuts but not hurt by very much.
Benedict yeah I guess extend the debt ceiling but not by very and so this -- -- -- carts I think it begins to fall in November December I think whoever is elected we'll spend four years of wrestling.
Debt ceilings government shutdowns.
Tax expirations.
Seaquest -- Debt.
Debt rating downgrades.
All of this is in the future -- why the stock market thinks.
That there is a future.
That there valuing the way the -- today is beyond me.
Because.
Beginning in December.
Realities gonna come home to roost.
And -- and I -- to -- and took it to the -- these fundamental because well.
Did it sucked and was good seeing you think there's every month.
