Guest Host: Judge Andrew Napolitano

The Debt, The Deficit and You – The President’s Speech

Today, the debt does matter. The President’s old bogus economic philosophy was that government spending spurred the economy. This led to massive borrowing and the spending of $1 trillion down the drain.
Borrowing and spending does not allow for political influence. That is, politicians reward their supporters almost independent of the merits of the programs being funded.
But today, the President has finally realized that the debt does matter. But, does that mean he will spend less? No, of course not.
He is willing to tax the folks that create the jobs and thereby slow the rate of economic growth.

Guest: Senator Lindsay Graham (R-SC)

This speech is because of the pressure on all of us up here to get serious about America’s long-term indebtedness.
He didn’t touch on where the biggest problems are – entitlement reform. That’s 57% of government spending today. Tax increases cost Americans jobs. There’s no other way to say it.
The President doesn’t really want to be here. He’s talking about things he doesn’t believe in which is to reduce the size of the government.
Even today, he did not present a plan to get us out of the problem because there was not entitlement reform. There isn’t enough money in the over $250,000 group to pay for that. Of them, 750,000 are small business people who create jobs. And, 40% of Americans do not pay any income tax.
I hope we don’t raise the debt limit until we address why we are in debt.
Ron Paul, Mike Lee and Lindsay Graham have shown how to solve the Social Security problem by gradually raising the retirement age to 70 and means testing the benefits.
There are ways to reduce defense spending, but we are at a historic low in defense spending since WWII. You can change the way contracting is done to save billions.

I don’t believe for a minute that President Obama was serious about reducing spending until he was brought into this kicking and screaming because the Republicans forced him to see that people aren’t going to continue to let the government spend them into oblivion.
The Left is very unhappy with him. They’re mad at him on Libya, on the Bush Tax Cuts, the $40 billion spending reduction and the stand-alone votes on National Public Radio and Planned Parenthood.
In the President’s proposal, there is a marriage penalty of $150,000.
We should not be talking about increasing taxes until we can show, over a long period of time, that we can reduce spending. I’m not talking about a few billion.
Speaker Boehner has talked about specific spending limits that must be in place before the debt ceiling is raised. Going back several years, President Obama has been on all sides of this issue.
Huckabee said he’d decide by this summer whether to run for President or not.

Guest: Congresswomen Michelle Bachmann (R-MN)

No one takes him (the President) seriously about what he is saying.
The President is committed to class warfare. He has something against businesses. Maybe that is why we aren’t seeing job creation.
What we didn’t hear was how to create jobs or create wealth. He’s always attacking wealth creation.
His deficits are 10 times as much as what George Bush’s were in 2007 and President Bush was spending too much. President Obama’s deficits in 3 years are $4.3 trillion.
My answer is no more borrowing. Raising the debt ceiling will just make things worse. Forty-one cents of each dollar the government spends is borrowed. If we don’t raise the debt ceiling, it will take 6-7 months before we would really feel a difference – money would continue to come in. We would pay our debts first and we would have to prioritize our spending.
The political establishment wants to keep this engine going.
The House will vote in favor of Paul Ryan’s budget plan. I will vote in favor.

Guest: Kirsten Powers, New York Post columnist

Paul Ryan’s plan is directed towards the Republican base.
It is totally dead on arrival in the Senate and it would be vetoed.
Republicans don’t sound open to any compromise.
The Left has been upset with President Obama for a long time. They are very happy about the speech he gave today.

Inflation

The Judge showed a quote from the Fed Vice Chair, Janet Yellen

“[Food and oil price increases] unlikely to have persistent effects on consumer inflation or to derail the economic recovery.”

Guests:

Calabria

I think the Fed is stuck in this theme that more inflation will give us more employment. The unemployment numbers are the only things they look at.
These record low interest rates distort the banking system. The banks load up on government debt and enjoy a 3% spread, risk free. They have no incentive to loan to businesses.
They changed who they are lending to. By lending more to the government, there is less and less to loan to businesses.
You don’t want to raise taxes during a recession. One of the criticisms of the Roosevelt administration was that he tried to run a balanced budget during the Depression.
The Ryan Plan lowers and eliminates deductions to allow for a reduction in rate. The tax side of his plan is tax neutral.

Nancy

Wage inflation is what you worry about.
The President’s speech was good. He’s a pragmatist. What he said was he will not turn Medicare into an $8,000 voucher for seniors while giving $1 trillion more in tax cuts to the wealthiest Americans.
The Republicans will pass Congressman Ryan’s Plan and it will politically kill them.

Judge (Wrap Up)

Thomas Jefferson’s birthday is today. He is credited with creating the American Republic.
He authored…

“…that all men are created equally, that they are endowed by their creator with certain unalienable rights…” and…

“It is incumbent on every generation to pay its own debts as it goes…”

It was his concept that Rights come from God, not from government.
Could he have imagined our present debt? In the last six months, our debt has increased 15%.
The size of the debt is immoral. And, we don’t have the money to pay it back.
The Jeffersonians, the anti-Federalists, who believed in small government and individual liberty, struggled against the big government Federalist types at the Constitutional Convention in 1787. The Federalist were successful with the Constitution while the anti-Federalists were successful with the Bill of Rights.
His principal that the government that governs best, governs least, has been resurrected by the Tea Party.