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| "We are broke" — James Baker (763281) | |||
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"We are broke" — James Baker |
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Posted by David Fairthorne on Sun Apr 10 15:26:05 2011 Source: http://www.livedash.com/transcript/fareed_zakaria_gps/49/CNN/Sunday_April_10_2011/581391/.Fareed Zakaria interviews former Treasury Secretary and former Secretary of State James Baker This part of the interview dealt with the national debt. See the above source for the complete interview. 00:25:09 >>> And we are back with james baker, who was ronald reagan's chief of staff, secretary of the bush's secretary of state. 00:25:18 When you watch what's going on in washington, the partisan divide seems as great as ever, the inability to work together seems great. 00:25:27 Sometimes they manage a deal, sometimes they don't. 00:25:29 But there's an enormous amount of partisan wrangling. 00:25:33 Is there a way out of this? 00:25:38 >> Well, I think ultimately there's a way out of it, yes. 00:25:44 It's too bad, our politics have gotten quite ugly since I was up there. 00:25:47 When I was up there with ford, reagan and bush one, you could reach across the aisle and be a political adversary but not a political enemy. 00:25:59 Today, too much has led to a zero-sum game. 00:26:02 That's really regrettable and unfortunate. 00:26:04 There are a number of causes for it that we don't need to go into here, I suppose. 00:26:11 It's too bad because we used to be able to do the people's business. 00:26:13 And it's getting harder and harder to do that. 00:26:18 Then you have the 2012 budget. 00:26:20 That's the big enchilada. 00:26:25 Then you have to debt limit coming up. 00:26:26 When I was treasury secretary, you had to work, work, work, even 25 years ago to make sure we could get the debt limit going and the government could keep functioning and honoring our debts to people and wouldn't have to default. 00:26:39 Both of those are coming up. 00:26:40 Those are going to make this battle look like nothing. 00:26:43 >> What do you think the republicans should do on the debt limit? 00:26:48 >> Well, it -- at some point we've got to get a handle on this spending binge we're on. 00:26:55 The united states of america, if we didn't have the dollar as the de facto reserve currency of the world we'd be greece. 00:27:03 I mean, we are broke, bankrupt, really bankrupt. 00:27:07 We're going to have debt to gdp over the next five years of over 100%. 00:27:11 That is not sustainable. 00:27:13 Now, you've got to take care of that. 00:27:15 How do you take care of that? 00:27:17 You've got to do it by cutting spending with respect to which there is no political will on the part of either party, not just a democratic problem but also a republican problem. 00:27:27 Primarily a democratic problem, I need to say. 00:27:31 Or raising -- and/or raising revenues. 00:27:33 You need to do both. 00:27:34 Both have to be on the table. 00:27:35 We have to get a handle on that. 00:27:38 One way to bring a lot of attention to the problem is to not keep increasing, keep giving ourselves a new credit card every time we run out of money. 00:27:54 That's one real way to -- >> you were sect secretary of the treasury. 00:28:02 And tim geithner says to not raise the debt ceiling would send the signal that we're a republic. 00:28:06 >> It will send a signal. 00:28:07 That's what I used to argue. 00:28:08 I believe that. 00:28:08 But at some point we have to stop this profligate spending spree we're on. 00:28:15 We're in big, big trouble. 00:28:16 The biggest challenge facing the united states today is not what's happening in the arab world. 00:28:23 It's not what's happening with respect to iran's search for a nuclear weapon or anything else. 00:28:27 It's not our wars in iraq and afghanistan. 00:28:30 It's our debt bomb. 00:28:31 We are broke. 00:28:33 You cannot be -- you cannot be powerful militarily, diplomatically or politically unless you're powerful economically. 00:28:41 The source of america's strength has been its economy. 00:28:45 Our economy now is in the tank. 00:28:46 And it's just not acceptable. 00:28:48 We have got to find a way to deal with this. 00:28:56 It's the number one problem facing the country. 00:28:59 That's why i, frankly, was disappointed that the obama administration didn't come with a budget proposal that dealt with this continuing growth of entitlement. 00:29:08 We have to deal with that. 00:29:10 Somehow we have to find the political will to deal with that. 00:29:14 >> Do you think president obama has led enough on this issue? 00:29:17 >> I would like to have seen him be more forceful in saying yes, we're going to take care --we're going to confront these problems. 00:29:29 I would have liked to have seen that. 00:29:31 Let me tell you a couple of things that could be done that don't solve the debt problem. 00:29:34 One would be to do tax reform. 00:29:35 I was in washington before the joint committee on taxation. 00:29:40 Chairman max baucus and senate on ways and means. 00:29:48 I said the stars are aligned just like they were when ronald reagan last reformed the tax code, 25 years ago in 1986. 00:29:53 That tax code has grown again into an abomination, the america people hate it. 00:29:57 It's too complicated. 00:30:00 They can't understand it. 00:30:01 You have to pay lawyers and accountants a lot of money. 00:30:08 We have to simplify it, eliminate preferences and deductions. 00:30:11 Fortunately today we have two chairmen of the tax writing committees in the congress who would like to see that happen. 00:30:18 It's not going to happen without presidential leadership. |
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