Also in this playlist...
This transcript is automatically generated
-- isn't a problem.
To David Stockman -- is not quite convinced Ronald Reagan's former budget director and the man who has written both parties for not facing up to the seriousness of this debt.
Joining me now we -- spend extra time with David because that.
-- despondent and started in good soaking generalists markets what do you make of Whitney was.
He's not he's got a lot of good statistics it's a nice history it's a good profile but it doesn't capture.
All of the problem by any means will sort of be clear he's saying.
You get health care spending on it could throw.
You solve the problems they now.
I don't I say no because I -- reference back to what Ronald Reagan faced in 1981 when he came into office and where we've drifted for thirty years since.
And I think it's a better picture than what he -- this morning.
There was 21 point 2% of GDP on the spending side left by Carter.
What the Republicans can't understand is that Reagan didn't reduce that.
When he left office as a percentage as a percentage of GDP when he left office it was nearly 22% of GDP.
Big government was bigger and since then.
It is drifted even much higher to 2425%.
And the problem is defense the problem is medical programs the problem the problem is really social insurance -- means it means tested.
Social Security Medicare one point five trillion going to millions of people who were affluent.
Don't need it should be cut back or cut off he didn't talk about any of that secondly.
When Ronald Reagan came in revenues were at nineteen point 5% of GDP.
That was Jimmy Carter's cent tax level.
He cut taxes a little bit but by the time we got to 212 they were down to 16%.
Both parties have been cutting taxes while they let spending.
So now we have the lowest tax burden even after the compromise so called.
New Year's Day in the last fifty years and we have the highest level of spending we've ever seen.
Since World War II right and raise revenues then what McCain you've got to do -- what I'm saying is you have to raise taxes you -- man.
I don't know I don't I don't wanna get into taxes but yes you have to raise them and we -- -- new -- she can't get -- out of the income taxes pretty clear.
The we've already -- that out that we're gonna need a consumption tax this country over -- under saves under invest.
We're living beyond our means we're living in a fairy tale and we have to start paying -- -- -- -- -- value added tax most of that is -- on top of a variety of credits and exactly final funnels well.
You know everybody has their problem I'm saying if we're going to fund even 20% of GDP which I think we get spending down to.
But I'll tell you what we'll take in a moment you know horrified everybody on Capitol Hill.
But to get it to 20% of GDP.
We are going to have to have a consumption tax of large magnitude we need to stop taxing payrolls that is the payroll tax.
Because we have the highest labor costs in the world that we add 15% on top.
My answer is to reduce or eliminate the payroll tax tax consumption not work.
The spending cited the economy not the production.
So what Bobby Jindal is doing -- proposing to do in Louisiana.
Get rid of the income tax corporate taxes replace without this letter sales tax he hasn't.
Kind of the numbers the right it's the right that's correct that's -- would answer yes yes that wouldn't that be.
Regressive is in the argued that it hurts middle to lower income people more.
Well but there's that argument -- that the problem is you can effectively collect an income tax in the global economy that we're in today.
These big corporations simply hire lobbyists and lawyers and -- -- -- tax paying out of the woodwork yeah Italy -- the only thing we can tax in this world today is sales earth.
Sales at the retail at deployment of sales.
And that would end sells.
Sure -- -- sales but the problem is we can't spend our way to prosperity we can't consumer way to -- They're not saying you either or.
That's the one -- EIR that is about being you you would not be as some of educated.
-- replace the federally cut tax.
With the consumption -- I would like to need both I would like to replace the payroll tax rhetoric consumption tax.
Because the payroll tax is what's killing job as a you know.
Filter by section