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US Treasury Secretary Tim Geithner spoke to the Detroit Economic Club yesterday -- while it was there primarily to justify.
The GM bailout as a job yeah which of course it isn't.
He also admitted that the federal debt must be cut down.
So why then is he pushing for an increase in the debt ceiling.
Here to discuss these mixed messages are my freedom fighters Fox Business anchor.
And my colleague and friend Chris -- democratic strategist Sasha burns.
And reason foundation director of economic research into Iran doesn't -- you first.
If serious cuts are not -- if the debt ceiling is not raise global markets to.
The markets -- like it but I can tell you the markets -- light just because there's uncertainty I don't know what's gonna happen if the debt ceiling isn't raised I think that's part of the problem.
When you see these polls out there -- sixty only 16% of Americans think that we should raise the debt ceiling.
I would rather go a little bit deeper NASA do you know what will happen if we do not raise the debt ceiling and many of them do not know what will happen I don't what's gonna.
Sasha burns does it make sense for Tim Geithner to speak out of both sides of this math thing I'm concerned about that we have to decrease that we've got to get rid of deficit spending.
But I want -- let me borrow another two point seven -- it and the next sixteen months.
I would argue.
That they're two separate issues and I have to be separated I don't disagree that.
The problem with raising the debt ceiling is that we are going to spend more money but you have to separate deficit reduction from -- -- the debt ceiling.
Raising the debt ceiling has to happen because -- we can't have that interest rates on the that we -- I have going up and that's what will happen if we.
Is that is the conversation.
On Capitol Hill that for the first time in over 100 requests from the president to the congress that the debt ceiling be raised.
This president might not get this debt ceiling raised or is this just.
Political posturing stated differently.
Are -- libertarian small government.
Fiscally conservative instincts that are serious and the congress -- that's all politics but there's a few but I think the general -- is that this is a lot of politics -- there obviously they were as a a handful of Republicans have voted against the the CR couple weeks ago -- -- residents -- those things that let the government Parker took three weeks.
Exactly the right there there's gonna be the same thing there's going to be a few people the wind up voting against this and it didn't talking to a lot of even Republicans up there at this probably -- at them even hold a vote.
And intensity knowing that they're gonna vote it down.
And then they're gonna come back and pass -- my sense is that eventually sort of a -- vote to see what the Democrats -- what the markets do I think I think that I think that they they -- -- test the waters a little bit and they're gonna give themselves some political cover to say look.
We voted against it -- and then we had to come back and before but -- I would do disagree I do not think that we should be separating.
The debt ceiling discussion from the actual debt like debt problem we have does the fear among.
It makes sense christening of that the secretary treasury isn't literally saying that the Chinese will end up owning Yellowstone National Park but he is using the word.
That his predecessors never had to face which is default.
I mean just because we can't borrow more doesn't mean we can't pay that debt service does -- mean we can't roll over the debt you know borrow more money to pay the money that we -- It just means we have to stay below a certain limits a default does not.
Automatically going to follow or do you disagree with I disagree I'm not sure about that but -- I guess my question would be then it what is Geithner is motivation is it strictly political now following the lead of the White House in terms of saying something like that.
Why would he -- so prone to hyperbole.
At such a -- when he's at such a high position if he really doesn't believe that we face that type of -- well I would suggest you he's prone to hyperbole because his boss wants to be able to keep giving away money to certain interest groups others -- every electrical excellent.
-- -- everything's political but that's also why you at the separate -- started saying not so much the discussion but the legislation.
Hit some of the Republicans are saying basically we won't vote port unless you include our entire agenda in the same package -- it is important because.
The US matters as part of the global financial market it's it's the biggest and best investment.
-- Is their biggest and best investment making the fourteen point three trillion dollar hole they've made this investment for others.
To buy and -- I feel that you what was happening if we if we let our day Grozny.
Out of out of control spelling that actually impacts that the interference I'm not anti didn't.
But debt reduction and West -- you can't you cannot separate -- the discussion and you can't even separate legislation now practically speaking.
You were not gonna get entitlement reform attached to that that that's and whatnot.
But you cannot be just happy you're just raise the -- something's gonna have to be -- shouldn't we take seriously.
Republicans who come on air here and say.
Unless there's a balanced budget and then I'm going to vote no on the -- it's -- -- congress can create this and -- it sound secondly takes a couple of years normally.
To amend the constitution thirdly.
Correct if I'm wrong there is no way.
The Democrats and it takes two thirds of each house are gonna be in favor of a balanced budget amendment no matter what comes at.
Most Republicans are -- -- say no there are certainly some that they're deaf players and departed and you know you got guys like Tom McClintock that wanna pass.
Good legislation on this that there are some good Republicans but I think a lot of -- political -- and switching -- the Tea Party isn't only having an effect -- Republicans these days Crist -- out of the movement is affecting Democrats as well.
More Democrats as of this morning.
Are joining Republicans in the -- demanding major spending cuts before agreeing to increase the nation's debt ceiling are these progressives being politically genuine in this fight.
Where is this just strategic planning for 2012.
Well incidentally that is -- politically coincidentally they're all part of her accent that's Botswana.
Yeah politically genuine is thinking about the money well right that's what politics think about getting reelected in back to my point about the polls I think a lot of politicians and a lot of people out there don't really understand the consequences of allowing our -- -- it -- not raising the debt -- but they see that as the way the wind is blowing and that's when the politicians -- -- that the.
All right Sasha these people are your colleagues and -- Kent Conrad Joseph mansion.
Mark Pryor -- -- club -- -- -- but he's not gonna run for reelection Ben Nelson.
The Nelson in Nebraska so five of the six up for reelection.
Can we call the middle of the road Democrats are making noises like they're not going to vote.
In favor of the -- silly noises are for real.
Other than -- chart there are very conservative Democrats do you look that where that -- everyone okay are these noises are real.
They're for -- in terms of Democrats also want to reduce the deficit that is this isn't a Republican want to and Democrat.
Doesn't want to.
This is a good time to -- to be a discussion about how to do it because there has to be -- negotiation.
What they what they're doing is absolutely.
Looking forward to their 2012 elections -- from West Virginia there from Arkansas.
And they have to an absolutely Chris is so right this 16% number it's it's the same sort of added thing that doesn't make sense.
Among what the American people think 75% don't want Medicare cut or touched or Social Security or Medicaid.
So there's this sort of non understanding.
Yes we want to reduce it don't -- increase the debt ceiling but don't cut anything that affects me so.
They're in trouble -- these conservative states if they don't seem to be caring about the -- Democrats possibly be serious with a possibly embarrass Barack Obama in a tenuous reelection I'm not letting him borrow the two and -- half trillion -- in the next fourteen months I think actually they are -- inside politics is certainly at play here without a doubt I think there's also some some honesty -- -- The -- the understanding that we -- don't need to -- Did just deal with this for the 2012 budget we need to be symbolically dealing with us as we go last word Chris if there is a vote and if the Republicans for there to test vote or not vote down race in the -- what -- the markets do.
But I gotta say getting -- to be a negative for the markets but it might just be a short term -- it's uncertainty it's a great deal of uncertainty out there in the markets don't like that but we've seen a very resilient market over the last year and you two years I think you will continue to see.
All right Chris got a -- currency and they ran dazzle it's a pleasure thanks for joining us have a great week.
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