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Former CBO Director Douglas Holtz-Eakin discusses his concerns with America’s borrowing power under the current administration.
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Is now is Douglas Holtz Aiken and -- the former CBO companies the current president of the American action forum.
Doug the president says borrowings cheat and -- people -- -- to lend us money so don't worry how about you.
I am deeply concerned as you well know on the US is already suffered one downgrade by -- ratings agency.
-- Moody's announced I think this past week that.
If there's not substantial progress made during the spring of 2013.
It would downgrade federal borrowing.
And we have debt that exceed the size of our economy and if you look historically.
At countries that end up in that position.
They grow more slowly about a percentage points lower per year.
And they suffer greater possibility of a Greek style financial crisis I -- nothing about this that should comfort us what.
You know I see nothing about it in the establishment media so fall this morning effective fox and Fox Business -- company with the only -- this reporting this and I I thought that statement of no couldn't son about sixteen trillion dollars that just jump right out at me you.
I guess I'm not surprised -- the statement if you look at the the president's budgets -- -- he's put out during his time in office.
Each one has featured ever increasing debt in the out years they've never had a serious plan.
To control the size of the deficits -- a trillion dollars a year for yours or the growth in debt.
And his comments last night reflected that so this is not something that has ever made the administration's radar he once said he'd cut the deficit half -- -- in his term but obviously.
That wasn't important it does make the media's radar -- I wanna move on to Mitt Romney -- still receive accused of trying to clear up the comments from that video -- made last year.
Last night he said this on entitlements and we distribution.
This idea that the president has -- a -- distributing I know there are some people on our country who want it.
I have I have a government take from some to give to the others they'd like to be the others that are on the receiving end of that and and and feel that they re distribution model makes sense the president some years ago said he favors redistribution.
I don't.
The look is making America clip -- redistribution on one side not redistribution on the other but his his my question is it possible.
That America really has changed a loss in the last four years and the redistribution is now considered a fat policy.
And about financial culture really has changed tell me I'm wrong.
But I got a suspicion that that may be a trend in that direction up.
I think there's always been an American tradition of caring about the least well off and there has always been a concern about the quality of the social safety net.
But that's very different every distribution and if you start out looking for redistribution make two very big policy -- Number one if -- -- carving up the pie we need a bigger party need to focus first on growth.
And the second if you believe in redistribution you can live in a society that is only rich people what they are equally rich in your gonna try to re distribute again.
That's not the problem the problem is Americans who need help.
And they get better -- -- -- grow more rapidly and the social sickness durable and right now we have some concerns about our Social Security or Medicare lasting the next generation.
That's an appropriate concern.
But -- for your question sort I don't think that's changed I think Americans are now.
Equally concerned about police -- and the fact that the government seems to have gotten too big they wanna fix both problems downsize government take care of the worst off.
I want a full -- to comment on of this is -- -- forecasting -- -- let's suppose we really did get tax reform lower rates corporations and individuals.
And some loopholes and you get a long term plan to rein in and reform and talked about just suppose we did that.
You think with -- get a 456%.
Growth -- within say a year year and a half.
Absolutely we have a lot of slack so you can you can grow at something like you know three and half 4% just to make up the slack we have.
And a good tax reform -- high quality low rates broad base personal plus corporate tax form.
We'll give -- another percentage point growth opera -- over the first ten years and that's what we mean it would be the single best thing we can do in this country to solve the fiscal problems and the social problems that come with too little employment I don't think we've had a 5% growth rate in close on -- decades -- five or six years guarantee.
It's been a long time make it but far too long Douglas -- -- a pleasure back.
