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Here's -- -- -- Korea we've got a deficit problem -- as lawmakers try to tackle it.
They -- -- Foundation is offering its own plan to save the American dream.
Michael franc is a vice president of government studies for The Heritage Foundation and joins us now to discuss their plan might.
Good afternoon hi there well and you know right -- the top I'd like to.
Ask you know we know that fit nation faces a very dire situation that it seems right now the politicians are more worried about getting themselves elected next year.
And actually making the really hard decisions that need to be made so I need ask you.
How -- actually realistically.
Tackled this deficit problem.
Well as a lot of things first of all.
If you're elected official you should be aware of all the alarm bells going off.
-- Standard and Poor's the rating agency recently said.
That within the next couple few years they're likely to lower the the grade the United States gets for what's the difference treasury bonds and and debt.
The one of the largest investors in the country Bill Gross who runs a big.
He's just -- -- go short and get -- out of investments and treasury bonds because he's so worried about the deficit growing.
Is a lot of alarm bells going off of the International Monetary Fund and yeah.
He's moving and Leno -- this isn't it none of that -- noon might frankly I mean all of our congress people know this already but progress still seems to -- -- so what is it that -- missing right now that you have the -- -- Well.
We think that.
Did the big debate coming up actually is over this increased proposed increase in the debt ceiling.
And this is going to be a turning point is -- we have decision point for the lawmakers.
And we think they should be looking very seriously at large cuts and spending both in the short term.
In the mid term and in the long term and that requires taking a hard look at.
All the promises we've made to people about my age the baby boom generation.
With respect to our retirement and our health care we can't sustain that.
And there's a growing sense among people I think in polls among the American people.
That -- they don't want to have to deal with those programs and change them there reluctantly coming to the conclusion that it's essential that we do so.
So the politicians have to lead.
Is a group of politicians Paul Ryan of Wisconsin is among them who have taken a hard first step and they put a plan out there.
That for we'll get to a balance eventually that will reverse the trajectory of debt and spending that were on.
And we have to find more politicians are willing to join him in that cause now admittedly.
Most Democrats out there.
Are denying that there's a problem that requires immediate attention or if they if they want to deal with that.
They think the way to deal with -- is that dramatically raising our tax burden and that puts us in uncharted territory we've never.
We've never had a tax burden is high if they'd like it to go.
For any more than a year or two since world war two and they want to make that a permanent new condition of our relationship without we can't sustain that.
Mike we hear exactly what you're saying but we -- this segment as you are the man.
With the solutions.
So let's not talk about the problems so much right now give us some bullet points and what can be done.
She and you know that's way people who are watching this at home -- -- -- on their hands can take some notes.
OK well first of all.
On the spending side.
What whether we have to protect by the way is our defense the constitution says we need that congress needs to provide for the common defense and our plan.
Heat's defense spending have roughly about four percentage points of our gross domestic product.
For the long haul that allows us to fulfill our -- is on keeping us safe -- you know keep us safe.
Doesn't -- much of their progress this doesn't really matter then on discretionary spending all the space for transportation education housing.
Those kinds of programs we see getting that down.
Less than half -- where it is today and that means giving a lot of the revenue and the and the actual responsibility.
Back to the state governments -- these responsibilities properly resigned.
That's a big chunk of the of of this cuts and spending the big one though more than anything else.
Is changing the relationship we have toward the government with respect to Social Security.
Medicare and Medicaid there's a big -- -- programs they're -- bankrupt us and what we've proposed is change -- programs essentially meant a Medicare and Social Security.
Into insurance programs meaning that you pay into it -- one -- -- tax when income tax.
And you if he needed.
After a certain age you can get some help.
But if you're making a lot of money and you know needed.
Because it's like insurance plan you don't have to call -- -- just because he turned a certain age and that in effectively would.
Change the trajectory of those programs in -- disparate as a big it's a big change but really all these changes together.
What happens as it gets us down to.
A level of spending -- about the average we've had since World War II is quite a dramatic change in that relationship.
-- -- we're gonna have to let you go there but I gotta tell you a lot of those things are saying makes a lot of sense but I think.
It's going to be a tough sell still for the American public particularly people.
And your age group who don't seem to want to give up anything right now.
Right yes -- -- I think they're starting to change -- it all right let's and they are and we appreciate your plan I think is a step in the right direction.
Mike -- -- -- foundation thank you.
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