[cheers and applause] >> jon: hey, everybody. that's our show. i want to show you something. can we get this. i don't know if you can see this. this is the leftover from the -- here is the sad truth about this in my head. my daughter eats a cereal that looks similar to this. if you were to fill my hand with milk, they would be a happy camper. iñs. i think that's the name of it. here it is your moment of zen.

>> stephen: tonight, is newt gingrich having trouble saying on message not if message is the name of his receptionist. [laughter] and white house economic adviser austan goolsbee is here to talk about raising the debt ceiling. wouldn't it be cheaper just to put in a debt skylight. starbucks is being sued for firing a dwarf or as starbucks calls him a "tall." this is "the colbert report." ["the colbert report" theme

music playing] captioning sponsored by comedy central [cheers and applause] [crowd chanting stephen] [cheers and applause] that was fascinating. i never actually heard a fight over the time signatures. [laughter] people going five, four, some two, three, some four, four. welcome to the report. [laughter] good to have you with us. nation ever since we took out osama bin laden americans have

been wondering who was going to fill his shoes. all we knew for sure was that after discovering his pornstache, no one was going to touch his socks. la of laugh numerous people -- [laughter] numerous people have been mentioned as potential replacemn starting with ashton ciewch kutcher. he's the choice for reimmediate consideration mad men. la of laugh looks like they may have found their man. >> want to bring you the latest on perhaps a replacement for osama bin laden. a source has said that they've picked bin laden's temporary replacement, an egyptian and former special forces officer said to be in his 50s. >> stephen: evidently he nailed the interview.

when asked where he sees himself in five years he said sliding off a board into the ocean. folks -- [cheers and applause] folks -- this choice right here was a huge surprise because the smart money was on al qaeda's long-time number two al al-zawahiri. i know he is an unrepenten mass murderer but i feel sorry him. he was second in the command. he should have gotten the promotion. all the lat late night shifts working in the caves, burning the midnight oil, burning the midnight hostages only to be passed over for a temp who doesn't even have a beard. what is next casual fridays where everyone comes in wearing denim suicide vests? [laughter] ayman, our hearts go out to you and hopefully soon so will our

navy seals. [cheers and applause] i don't just pass judgment, i cut it off in traffic and flip it the board. this is tip of the hat, wag of the finger. [cheers and applause] it's no secret. i've always loved ohio from the time his a layover there to the time i drove through there. it's wider than you think. now there's another reason to visit the buckeye state. we turn to cincinnati's news leader. >> the ohio house has passed a bill that would allow those with concealed carry permits to have a gun in a bar, restaurant or sports stadium. >> stephen: sounds dangerous, but remember any baseball game already carries the risk you might die of boredom. i'm giving a tip of my hat to the ohio legislature for giving

pitcher's duel a whole new meaning. i say it's about time we let guns into stadiums filled with testosterone filled fans prone to violence. best of all my life partner sweetness is a huge sports nut and i'll finally be able to bring her to the game. who knows, maybe we'll even get on the kiss cam! [laughter] now they loved you, honey. republicans say the representative danny bubka -- [laughter] explained why his bill is so vital. -- quote -- "you can't always count on law enforcement. you have to be able to protect yourself." and he should know. where was law enforcement when those vowels were stolen from

his last name? [laughter] next big tip of my hat to the facebook for instituting a new policy allowing users to add tags for brand name products in the photos. omg y'all chilling at the yoga studio with my best friend coke c. now i can realize my lifelong cream of being targeted by target and ged spammed by spam. this issued in a brave new world of personal product placement. remember charlie sheen got paid per tweet to start plugging products on twitter? neither does he. [laughter] well now.

[laughter] [cheers and applause] well, now americans can whore themselves out on facebook instead of just whoring them themselves out on craigslist. photo taggers could charge companies based on their number of friends and demand top dollar for tags in their most viewed photos. think of all the windfall you could reap from dropping products into the most precious life moments like weddings, pw *eurtdz and -- births and funerals. [cheers and applause] [laughter] i know he's advertising mountain dew but he will be sierra mist. we'll be right back. [cheers and applause]

welcome back, everybody. thank you. folks -- earlier this week i touched on the candidacy of newt gingrich and i believe some of it is still stuck to me.

[laughter] folks, i like this guy's chances but some people are saying it's over before it even starts. just because while newt was on this week's "meet the gregory" he seems to support the requirement that everyone buy health insurance in obama care. >> i have said consistently we ought to have a requirement to have insurance or post a bond or indicate you'll be held accountable. >> that's the individual mandate, is it not? >> it's a variation. >> stephen: yes, just like wife flee say variation of wives one and two. of course, newt's honesty so alarmed the beltway crowd they took off the belts and spanked newt's ass until it was so pink and swollen it looked like newt's face. jim? >> i think the number one thing you don't want to do when you

start a campaign is alienate your political base. >> newt gingrich has cleaning up to do if he's going to get his campaign rolling again. >> he blew himself up not just as a candidate but in a real sense as a republican. >> jon: wrong. newt can't blow up any further. he is already inflated to maximum pressure. [laughter] besides, folks, it's all a misunderstanding. as newt explained while on a break from selling oranges on the side of road. >> any effort to impose a federal mandate on anyone it's fundamentally wrong and i believe un-- [horn honking] >> stephen: sure on sunday he was for individual mandates and monday he found it unconstitutional. things change. maybe between sunday and monday he read the constitution for the first time. he knows a good leader views all sides of an issue.

a great leader takes all sides of an issue. he told newsweek paul ryan was a brave man of ideas. but on sunday he dismissed his plan as too radical. >> i don't think right wing social engineering is any more desirable than left wing social engineering. >> stephen: that set off the unquestioned leaders of republican party, angry middle aged white guys. >> i didn't do anything to paul ryan. >> he undercut himself -- him and his allies in the house. you are an embarrassment to the party. get out before you make a fool of yourself. >> stephen: oh, oh, he's a fool, really? oh, really. he's a fool? you are the one at a newt gingrich rally. excuse me, i'm being told in my deaf ear that newt gingrich has

appeared on the getra -- greta van susteren show. >> are you saying you chose the wrong words or it's not what you thought? >> you listen to the question david gregory asked me i should have said i'm not going to answer it. >> stephen: yes, no one has any reason to be upset about newt's ideas because we're not supposed to know what they are. besides newt granted himself full immunity from himself. >> let me say on the record any ad which quotes what i said on sunday is say falsehood. >> stephen: right. any accurate quote of what newt said are falsehoods about what newt said because -- >> i have said publicly those words were inaccurate. >> stephen: so -- [laughter] -- the more accurate you are about his inaccuracies, the more

false you'll become -- i need some help. [laughter] luckily i have the most sophisticated candidate tracking technology. please welcome the pander tron 8,000. [cheers and applause] hi pander tron. >> pander tron loves stephen, make him feel good. >> stephen: not now pander tron, not now. enter political mode. >> political mode engaged. enter talking points data. >> stephen: i'm going to upload newt's statement about paul ryan and process.

>> analyzing, analyzing. >> any ad which quotes what newt gingrich said on sunday is false but his arresteds are false. two equal falses, errors, errors, errors, errors! >> stephen: it's just a little glitch, folks. >> cannot reconcile human contradiction. must kill humans. kill, kill, kill. >> stephen: no pander tron, i

>> welcome back, everybody. my guest tonight is the economic advisor for the obama administration. i assume he's here to beg me for a loan. please welcome austan goalsbury. [cheers and applause] -- austan goolsbee. [cheers and applause] good to see you. all right i'm going to tell you something right now i don't normally say to my guest.

>> i don't like how this is already beginning. okay, yes. >> stephen: i'm going to let you get in a word in edgewise because i love to hear you explain how on monday we hit the magical deadly debt ceiling date and we're all still here! the earth didn't swallow the united states like you predicted. >> no -- >> stephen: is your bookie man dead? >> if he they cut off water to your house. >> stephen: yes. >> the fact that there are a few gallons in the toilet that you can drink is not going to save you. you have to get the water started again. >> stephen: remind me not to have a drink at your house. [laughter] >> we hit the debt ceiling. we have emergency measures that we can rely on until those measures run out. we're stretching it. >> stephen: america is living on hamburger helper, is what you are saying.

>> at best. it's whatever is in the pantry. the secretary of treasury says we're going to get to the technical debt ceiling. there's other things we can do around the beginning of august and then that's -- >> stephen: let me just -- i'll bite on your hyperlet call crisis. -- hyperlet call crisis -- hypothetical crisis. what -- so -- or put in a simpler way so what? what happens? i hear a lot, i say, austan, treat me like i'm an idiot. what is the worse that the happens if we hit the debt ceiling. >> if we hit the debt ceiling and the u.s. government defaulted, it would default on treasuries, the interest rate would explode, banks would collapse or they default on social security, senior citizens around the country are not receiving their checks. we default on the military, we

don't pay the military bills or we default on medicare. all of these are bad. we don't want to get near this. this is not where we want to be. >> stephen: what is the worst case scenario? [laughter] what is your answer print more money? that's always the democrats answer, right? tax and spend. cut the budget. >> let's cut the budget. >> stephen: cut the spending. >> i agree. >> stephen: no new taxes. >> now, wait a minute. >> stephen: read your lips. >> read my lips? the high income tax rates are the lowest they've been in some 60 years. >> stephen: thank god! >> we cannot afford in an environment where we've got big deficits, long-run fiscal challenges the president doesn't

think we can afford to keep rate as the these historicallys. i think he's right. we've got to cut spending, both sides agree. and the total amount we're talking about cutting of $4 trillion over ten years is basically the same on the two sides. it's just totally different how we get there. >> stephen: what if -- >> yes. >> stephen: why don't we take a page from average americans and walk away from our debt? you know what i mean? and just live under assumed names like we just duct taped florida up against the gulf coast. [laughter] we try to pass ourselves off as brazil if you know what i mean. [laughter] what are you talking about you moved out a long time ago. >> that won't work. >> stephen: what works? >> look, we should address the

budget. >> stephen: okay. >> the debt ceiling not the issue. the issue is the budget. >> stephen: the issue is that you guys are two years in. how come you haven't fixed the economy? you've had two years. two years! >> your killing me. >> stephen: i'm killing you. 9% unemployment. where are the jobs? how come you haven't fixed it yet? five words or less. [laughter] >> do numbers count as words? >> stephen: no. >> 2 had the 1 million -- 2.1 million jobs added in the last 14 months. in the last 14 months. >> stephen: how many jobs? >> 2.1 million. way down here 1929 levels. >> stephen: why don't you keep digging to china and get more money?

that's what we must do. let's cut spending. let's not. let's return to tax revenues from high income people who are most like the historic north. he's talking about guys like me. [laughter] i don't think they realize your talking about guys raising taxes. >> they are saying let it go to what they were under bill clinton. it takes cuts under a balanced plan. discretionary, entitlements, revenue, save interest costs. >> stephen: how long have you been working on the budgetary problems? >> a long time. [laughter] >> stephen: how many years? >> in the administration we came in january of 2009. previous to that studying it as an am deckic for 14 years.

>> stephen: 16 years now. >> something like that. >> stephen: we've been talking about it for six minutes and i can barely feel my toes. [laughter] thank you so much for joining me. the chairman -- the chairman of the council of economic advisors.