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Economist Peter Morici, former Rep. Dennis Kucinich, (D-Ohio), and United Advisors Chief Market Strategist Scott Martin on the need to rein in governm...
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And our ideas back to business in Washington now that the inauguration is over and tomorrow house Republicans are holding a big vote.
And whether or not to extend the debt limit until May.
But how this is part of proposal if congress fails to pass a budget by April 15 you know -- pretty -- I don't have a problem about our many.
Here went there to take on the strategy.
We -- favorite economist Peter Marie C he always amazing Scott Martin is chief market strategist with united advisors we -- former democratic congressman a brand new Fox News contributor.
Dennis Kucinich Dennis so happy to see here -- -- to start with you -- be -- since your brand -- no.
What do you think is -- a powerful not -- or that they're not gonna get paid.
This issue of the debt is something had congress has dealt with 52 times since 1978.
As an obligation to to raise it because we have to cover that the spending it's already been established now.
Keep in mind that millionaires in congress wouldn't be -- by sound proposals then again there are plenty of millionaires but the people that depend on a paycheck.
I don't think that we want to start a precedent where we start the winking members' votes to how they vote on a specific issue.
That's a very dangerous thing but.
-- should we do something about spending you bet we -- yeah but the but the debt limit it is really the wrong place to have a debate where you start to.
The -- so.
Economic related issues -- because it seems like before.
You know -- -- would give me more money here before American Express would raise my credit limit they would want to know how I plan to live within my means that our future look there are they are related.
But I'm saying that we have to take -- context where we are right now with our economy our economy is isn't is just at the threshold over recovery this would.
The markets would react against -- -- doing.
We would see unemployment continue to be.
A major factor and when you look at the trade deficit we have which -- more than anybody has has tracked.
We we have issues dealing with our economy we are dealing with -- -- should be.
Yeah I think -- there Peter what do you -- us in the tank here what do you think that what is the best outcome for the economy went bad debt limit debate what do you think would get less certainly have.
-- Dennis is right they have to raise -- the limit right now however I think that linking that the next extension with passing a budget is a good thing.
Because after all how much you raise the limit is is going to be a function.
A public she would tend to spend more than you take -- And so and we do at some point have to get sued disciplining spending and linking it to how much additional we borrow I think that's a reasonable.
Thing to do so I like the strategy.
You know may nineteenth.
That said we really can't reduce did.
Deficit a lot in less we do something about our budget deficit you see that that that that -- could hit the trade deficit the trade deficits detracts from demand.
The budget deficit adds to demand so you're gonna -- that addition you have to reduce that -- I don't know it seems like we got to stop spending Scott Martin let me bring you into this discussion one of the markets want to -- Well I mean that's the crazy thing lessen the markets want to spend spend spend a minute you actually like an alien and you look down on the markets in the economy looked down the markets -- the debt ceiling you saw.
That every time we -- the debt ceiling the market's pretty much went up which they've done the last several times you get like okay this is how we get the stock market to go up I mean that's kinda crazy thing went.
I -- -- why why why why why why this happened because they mean is it that people trading in the market can't say they've -- it where ever gonna have to pay this bill down the road.
They -- -- market rally when this happens.
Well I think it's still putting one good things that happens Melissa is actually destroys the dollar and so you're actually an S&P company that's trying to sell your goods overseas.
It actually helps you that the dollar goes down in value because the foreign purchasers have more purchasing power to buy your goods.
But I think it's a dangerous game to say well let's let's let's let's pass this debt ceiling extension.
But deal with that the next time -- we -- hearing August.
Of 2011 we -- -- gang of six me this super committee all these Smart people were supposed to come up with some sort of resolution that's how we're not gonna get back to this spot.
And guess what we're here.
-- slamming democratic ticket back to you on that one because everyone thinks this sounds like and I don't wanna say it's such a cliche kicking the can down the road -- well well.
Look we've got to deal with there's there there is wasteful spending that's a fact.
But we also have an element that no one's talking about a wanted to reduce it here on the show and that -- that you have an exponential growth of debt.
Due to compounded interest.
And we have some structural problems with the way that we handle our money star system.
And this is something that we're gonna have to address sooner or later.
You can kick the can down the road we're -- we're still gonna have -- we've got to deal with the underlying issues of how these debts are created.
Cut the wasteful spending.
But also look at the and as the system that we have.
That causes the debt to grow it -- financially because of the compounded interest -- weren't real trouble here it seems like we're not tackling this prop.
-- Oh we are in real trouble which is -- point where raising taxes alone.
Will not put -- in a position where we can't get our debt and that deficit growth under control you know -- raise everybody's taxes by 25%.
We wouldn't raise it up Texas dictate to solve the -- -- -- problem but yet we throw the economy into a terrible recession.
So -- first principles you must spend less money -- this goes back to not dealing with the structural problems that are causing the economy.
Not to grow right and you know -- you go down that whole litany.
But the president's speech yesterday was surely not about growth.
Yeah that's true all right guys thanks so much for coming on -- wish we had more time you guys didn't get to tac and a lot to do this against him.
Thank you very much coming.
