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Stanford University Economics Professor John Taylor explains why GOP playing chicken with debt limit is good for the economy.
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Vice president Joe Biden -- with -- big -- bipartisan group about deficit reduction in about an hour.
And the nation's debt is rising and the White House is saying that -- the debt ceiling isn't raised by August the second the US could default.
Republicans refusing to lift the debt limit without spending cuts.
Critics say the GOP is playing a dangerous game of chicken with the debt ceiling.
But my next guest says that game of chicken is just what this economy and country and -- John -- -- famed economics professor at Stanford University John Gray need to be here.
Why is this game of chicken a good thing.
Although I would put it is the good thing is to both.
Take some efforts to reduce the spending problem while you increase the debt limit if you just have increase the debt limit with that any substantive.
-- ways to deal with the problem then.
The government's losing credibility and I think that would be harmful so my point news.
-- the debt limit increased to substantive.
Changes on spending I think that's good economics I think the the president should promote that as much as the House of Representatives.
And Dan -- -- mentioned that earlier in the show John that -- 2.4.
Billion dollar in spending reduction.
Is it is needed to offset the increase in that -- debts it women are trillion rather.
And in.
But is that doable based on what President Obama has proposed and what the house Republicans -- as you say that there is the ability for compromise.
I do I think it's quite doable to get to the 2.4 trillion you basically.
The president -- it has already changed his original budget proposal.
From back in February he's he's basically.
Offered another two trillion if you like compared -- then.
The house has a six trillion dollar goal.
So somewhere between two and six is that magic 2.4 -- -- in fact that's quite that's even closer to the president.
So I think it's quite doable I think they should just sit down and do it it's 2.4.
On the spending 2.4.
On the debt limit and that good economics and I hope they go that way.
Right now government spending an almost one quarter the sides of our economy out from a little more than 18%.
-- over a decade ago and John.
Looking back at all the money that has been spent in the last couple of years do you think that the stimulus.
Was worth it or was it worth less.
No I don't think the stimulus was worth it did it had very little impact.
On the economy that in a positive way.
But it's it's led to this situation of a much higher debt than otherwise it's taken our eye off the ball terms of dealing with the longer term problems.
And right now as you said we've had really an explosion of government spending.
And we have to bring that down.
I think it's important to begin bringing it down now that's why I think this budget deal so -- John great to see thank you so much take care yourself -- saying John Taylor professor at.
