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Okay picture this scenario you make a hundred bucks a week we need 200 to live on so what do you do.
You borrow the money you need however to -- -- a hundred bucks each week your expenses go higher still you continue to borrow more money.
Eventually the banks stop lending to you because you can't pay them money back -- officially broke sound familiar.
My next guest says it should because that is the state of our country right now Larry how -- -- the economists at Boston University -- welcome great Cesar.
Thank you so how we need broke I know the -- we're still paying interest on US treasuries -- not broke we have money right.
Well the the definition of broke is not being able to pay your future bills we have bills out -- was due in terms of futures history Medicare Medicaid.
Expenditures for defense spending is is very large and and when you add up all these bills as the CBO and IMF have recently done.
And you look at all the revenues.
-- -- -- to pay back the official debt.
The differences staggering it's about 202 trillion dollars the present I of all the spending.
Projected and all that other revenues the differences.
Fiscal gap of 202 trillion bucks at all.
And money and frankly serious -- times the debt we officially admit to -- you're looking at -- the different way you're saying we're in debt more than you might think.
Actually pay it off yet.
Well I think we need to.
There structural reform for taxes for Social Security for health care I know we've just passed a health care bill but.
I think that's made things worse we need to have.
The other in the area of health care we need to limit our spending on this.
On all health care the federal level to 10% GDP that's -- Switzerland's spends and that's got to stay fixed through time that we can do that very easily.
You could use -- Medicare part C program which is the Republican version of Medicare it's a democratic program Republican part of it.
You have both parties agreed to Medicare part -- for everybody everybody gets a voucher it's individual specific based on your pre existing health care condition that's what Medicare part C is.
And then what's covered.
Is such that template that the vouchers in total don't exceed 10% of GDP ever.
And then I think I -- I think you're talking about national I think health care is that what you're saying.
-- -- you get a veteran and you go to private insurance company it's it's not at all -- -- -- -- quite national bonds are if the Republican part of Medicare saying we have did we after really rethink fundamentally.
Every large program that we -- Starting with -- tax system -- the total ya the tax system is a mess I would get rid of all our federal taxes and have an across the board consumption tax.
At an 18% effective rate with a demo grant a monthly payment everybody to make a progressive.
And that Republicans -- both and Democrats can sign up to.
So we can have an efficient.
Tax structure that collects.
At least the same -- -- revenues and we're now getting and promote saving and growth rather than the opposite what about Social Security.
So security I would retire -- security at 75 years old.
Let's freeze what we have pay off the accrued benefits put everybody into an individual account not that.
Is run by Wall Street.
But that is run by a government computer have everybody contribute to a personal account have the government -- matching contributions on behalf of the poor.
Have the contribution split between spouses so that there's coverage for dependents.
And then you have everything invested in a global index fund.
Its market waited so it's just done by a little computer in this huge age I -- I think holding -- that you think.
It's very simple could you haven't fought hard enough about it.
It's very simple it can be done other countries have done similar things to this -- look at Sweden they have similar programs.
So this can be done.
And -- that would guarantee you get a real return of at least zero well -- on your account.
A real return and zero.
Well -- you think it would guarantee a floor to your real returns to the get a least what you put in a -- -- -- so the doing -- is not exactly.
Right well I'm just trying to understand your whole plan here -- You've obviously outline this idea that we're more in debt and we think we are we're facing more debt down the road obviously.
If you do you think there's any political will to restructure these massive program.
Well I think that there's a lot of -- the unrest about the degree of of -- and sustainability here.
On both sides of the political vials -- I think the politicians have to wake up to the fact that the public is -- up they they wanna have something simple they can understand.
We need a financial system that's much simpler and transparent.
Then that week we now have and I've written about this in my book Jimmy Stewart is dead.
At least I know Paul Ryan you sound a lot like congressman Paul Ryan it's twilight Paul Ryan.
I I I share a lot of views with him I'm not a Republican I'm not a Democrat.
Mild mannered professor says -- -- we're broke -- need to fix things are right sir thanks for your time today we really appreciate it.
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