after that, a look at europe's fiscal troubles and the impact on the u.s. economy with stella dawson of rioters and a discussion of what employees can and to secure their employee pensions with rick rodgers, author and retirement counselor. "washington journal" is next. ♪ host: good morning and welcome to "washington journal." president hu obama travels to seattle, washington and san jose, california for the democratic national committee events will year -- where he will do fund raising. we will could be infected donations to the presidential campaign. "the new york times" has a story about donors not returning to the obama camp.

we want to know what you think about the role of small donations on the presidential campaign. the numbers to call are on your screen. if you are a small donor, if you contributed $200 or less to the presidential cycle, here is the number to call -- 202-628-0184 let's take a look at that story.

we are interested in the defects of small donations, the efforts of small donors, not just on the president obama reelection campaign but on republican efforts and independent efforts. here is a story from " the new york times" a few days ago.

we can take a look at some of the numbers house small campaign donations have influenced the election -- of the most recent cycle in 2008 and the 2012 presidential cycle. you can see how the numbers are rolling in. this is for this next election. for $200 and under, already a 30 in -- a $31.9 million have come in. $200-$500, $4.4 million have come in. the numbers go from there. we are interested in the small donors. let's go to newton, massachusetts. caller: good morning. i gave less than $200 to hillary

clinton + presidential campaign in 2008. i am a democrat. i did not contribute to obama. i will not going to contribute money this cycle. host: how come? caller: i feel that both political parties are controlled by this big corporate interests. we could round up every small donor in the country and it would still be influenced, still felt, still from the large corporations and the large corporate titans and a large labor union bosses. i feel disenfranchised as an average american with nothing more than a small amount of money i can give.

host: let's hear from a democratic caller in san diego. caller: i want to know that i am only going to donate to obama because i don't like donating to the whole democratic party. so many of the democrats don't go to the democratic after they get your money. host: give me proof of that. caller: i just know that when a lot of the issues come up, democratic issues, they tend to vote with the republicans even after they are still members and have access to the democratic help. host: let's go to an independent scholar in poughkeepsie, new york. what do you think about the impact of small donors on the presidential campaign? caller: i donated $610 throughout the primary and general election process for

obama in 2008. this year, i have only been able to donate $10 to obama. for no other reason, i don't have any money anymore. i'm on social security and i could not afford last time. i had three pensions and all went belly up. i don't have anything to give. host: what motivated you to a vote last time? -- to donate last time. caller: i thought there was a black american that had a real chance to elect a president and that is important to our people are black because the young people need to know that there is no limit to what they can do if they really apply themselves. i thought it was so important. i had to do it. this year, i have no money. host: can you find other ways to

get involved? does it come down to money? caller: i can't really do a whole lot. host: let's hear what mike has to separate he made a donation of $150. caller: i think obama did a tremendous job bundling the small donor and he bundled up my time. i have not seen any example of him hanging around with individuals who have taken a small business to a very large business. i see a lot of jeffrey immelts who has never built a business from the ground up and i really don't get -- the best example of

corporate money sitting in foreign bank accounts and not being repatriated is jeffrey immelt and the entire general electric dump sitting in the hudson river near albany that has never been cleaned up properly and should be cleaned up. yet we are operating in a general election a company that got an enormous amount of tarp money. the image. immelt and the corporate image is absolutely outrageous. host: let's look at how other candidates are using small donors.

she raised $1.1 million as primary rival met ron they -- met romney -- as much as mitt romney did in two months. rick perry and run they are vying for a smaller pool of big donors to generate cash for their campaigns. chicago, illinois, democrats line, good morning. what do you think the impact is of small donors? caller: this wonderful president, one point that he

keeps driving home that will cause donors to start rolling in is the american people do not have 14 months to wait. he drives that, and the donor's will start rolling in. that is my point. i would like to make one point about the republican presidential candidate, if you don't mind. host: we are focused on the impact of small donors. republican, good morning. caller: i normally don't give anything to any parties. the 14-year-old the call in from the republican party that tell me how important it is to donate to them, i just laugh at them and tell them you have a bunch of gutless wonders that won't stand up to the far left. i am leaning more toward the tea

party. if somebody calls me and says they are from the tea party, i am more inclined to give. if somebody gives, it will be for that particular individual. host: take a look at this story in "the new york times." host: let's go to peachtree city, joined -- georgette. claire made a contribution. did you make a contribution in this one or the last one?

caller: both. i intend of making small donations. i just made a donation of $50. i am also going to go one person at a time and have that person tell another person and that person tell another person and maybe we could get that small donors ship back up again. thank you, cspan. host: one of our callers said he did not think there was much of a point because there is so much big money in the system. caller: i think we will need all the money we can get. we can have volunteerism to beat republican party. if we have a republican president and a republican congress that the middle-class will release suffer. it will suffer more than we are now. i happen to be fairly fortunate. i am employed. i also know there are many middle-class families that have

suffered during republicans in congress and the presidential office and i don't want to see that happen. host: eureka springs, arkansas, independent caller, good morning. caller: i have been fortunate to get perot and thank you for taking my call. my biggest comment is i contributed to president obama's reelection -- election campaign. i want to talk about the failure of the two-party system. the biggest reason for calling this morning is i would love for the rest of my fellow americans to listen to this one thing and it is the failure of the two- party system. i would love to see a 20% pay cut to all incumbents because of the ridiculous lack of leadership and vision for this

country. we are wasting so much time and some much money and opportunity. then't see anybody -- republican candidates are ridiculous. host: we will talk in half an hour about the potential of a third-party presidential bid. we will speak with elliott ackerman. in the meantime, what do you think about the impact of small donors? caller: i think it is terribly important. we have to keep our foot in the fire, so to speak, to be relevant. big money and special interests so dominate. that is why it is so critical for us, the working middle class people of america, to stay involved. the lack of involvement, that is what we get. we get this monopoly of this two-party system. i am waiting to learn more

about the independent party candidate, the green party presidential candidate, before i make up my mind. i am medically retired. i had a liver transplant. my money is extremely tight. i don't care if i have to eat rice and beans which i have been doing to support somebody else. i will give what little time and energy i have to support anybody but an incumbent. i will not vote for an incumbent. they have totally failed all those working class people host: let's take a look at a comment on twitter. we're taking a look at the impact of small donations on the presidential campaign.

there's more money that came in that gave $500 or more. $427 million came in for the presidential campaign in 2008 from small donors. jacksonville, fla., charles on our democrat line. caller: good morning. i donated to the obama campaign and i will continue to do so. wall host: idea think small donors make a difference. -- why do you think small donors make a difference? caller: i think there are more of us out here and we could really overwhelm the system if we donate to the campaign rather than wait on other people out there to give -- i am thinking

of the corporations. host: here is another comment on twitter -- spring lake, north carolina, republican, good morning. caller: i will try to shorten this. you have people complaining about the same complaints for the last 50 years. these people keep sending one guy with a satchel of money to washington and he gets there and he has all these bodyguards and he is not worry about the poor guy from a little community. these people need to go green and grow your own food and keep

as much money in your community. people will look back and think about what they will do. host: small daughter contributor in fort lauderdale, florida, good morning. caller: thank you for cspan on a sunday morning. i have routinely contributed on average about $100. it is very distressing that politicians and the candidates a mass incredible amount in their war chests. it is almost like they are literally buying a public vote. i don't believe it should be predicated upon money. the presidency needs to be predicate did and achieved upon marriage. in today's economy, personally, i am not donating a dime this year. i'm sick of walking down the street and seeing a person in

need of a few bucks. i would rather give it to them. it is marriage. it is not money. -- it is merit, not money. the richman will always continue and the poor man will drown. host: are you in new hampshire? caller: yes, i am. i contributed $25 to the obama campaign and $25 to the democratic national committee. i am a retired member of organized labor. i feel like we are in for the fight of our lives this time if we don't preserve a democratic majority coming up in this next election. i am frightened to with the right to work rules. they come into states and try to disrupt organized labor. i think the small owner makes a

big contribution. host: a look at a bloomberg story from this month, looking at the obama small donors. how do you see candidates as of exploring this? that is our topic this morning. let's go to illinois, on our democrats line. good morning. caller: i want to say that i gave $200 to the obama campaign because i think he is doing a good job. the impact for small donors is a very positive thing for this country, thank you.

host: let's take a moment and look at what is happening in politics down in florida. the florida straw poll was yesterday and have a guest on to talk about that and give us an analysis. kevin derby is with us. guest: good morning. host: tell us about the herman cain situation. guest: he had a big wind down here, taking 37% of the boat. herman cain came into the poll with positive feelings but he worked the crowd and was able to give a solid debate performance. it affected the speeches here. rick perry did not do as well with speeches when he came here. he did not have -- he did not have the intimate conversations that herman cain had when he worked with the people here. host: how much of it is a hands- on experience?

did the candidates who's invested time their fare better? guest: absolutely, the best example is probably rick santorum. he came in fourth place but he probably invested more time working the crowds than anyone else in terms of reaching out and shaking hands and talking to every delegate. he beat out ron paul and newt gingrich. host: talk to us about michelle bachmann. guest: she came in dead last eighth place. 1.5%. she said she would avoid a straw polls this year. it was a big loss for her and she is because -- increasingly become irrelevant for the sunshine state and the nation. host: how influential is the florida straw poll? guest: it is very influential. reagan won in 79, george bush

in 1985 they went on to win the republican nomination. this puts herman cain on the map. host: what resonates about his message? what did he say that people light? guest: people are sick of politicians. many businessmen candidates are doing well. kain's experience in the business sector connected with people. they like as private sector experience. host: this is from the associated press --

what do you take away from this? herman cain gets a little momentum and michelle bachmann not so much. which candidate do you see this impacting the most? guest: is clearly rick perry. he had a lot riding on this. he bought -- he brought in most of the state legislature and the had a lot riding on this. they did not expect him to lose by 22%. herman cain had very little organizational background. he had very little support. only one state legislator supported him. this was a huge loss for rick perry and his performance in the debates is a failure to connect in speeches and that was what led to this stunning showing.

host: former governor romney left florida early for events in indiana and michigan. how did he do? "guest: third place, 14%. this is a solid showing for romney, considering, and the have to -- he has to be happy that rick perry did not a hit a homerun. he and rick barry are leading in the polls. the romney support comes from the jacksonville area. he is certainly still in the game here. host: thank you so much for being with us. our question this morning is about the small donor impact on presidential campaigns. let's look at the other political news right now. this is from "the washington post."

westchester, new york on our independent line, good morning. caller: good morning. host: welcome. caller: a want to say that i did not vote for obama because i was not a citizen. this time around i am. i would also make a contribution to him. host: why would you make a contribution? how much are we talking about? caller: it does not matter how small it is because so many millions of people who can

donate -- host: see it heading up. tom, republican, in geneva, wisconsin, good morning. caller: how come you are taking three and four liberal colors in a row? are you mrs. keith olberman? are you liberal? what are you doing here? host: we take them as they come in. we like to hear all points of view. we have you on this a republican and we want to hear what you have to said. caller: what is going on? host: we take the calls as they come in. would you like to contribute? caller: you are a liar. host: jack donated $175 from baltimore, maryland. what is the impact to small donors? caller: i think it can be very

influential. i will vote for the democratic nomination no matter who it is. even if it is obama but i don't think he has done a good job. i think he has been weak in his opposition to the republican party. host: what about the idea of the impact of small donors? caller: it makes a difference. money is the bloodline of politics. you need money, unfortunately. i think the president shall campaign to all the public finance. there should be no money involved but there's not much you can do about that. i don't see how any average american can vote for the republicans. they will destroy this country. i cannot understand these average americans who will support them. host: let's talk about the topic of donations, do you think small donors make adult -- make a difference? caller: i have been voting for

third parties for about 30 or 40 years. grassley got $880,000 for subsidies on his farm which is ridiculous. if you can't beat them, you join them. i joined the republican party. i get all kinds of stuff through the mail, telephone poles, the main thing [unintelligible] $120-2 to $70 starting january is the republican drug d part. why do people vote for

republicans unless they are rich? host: what kind of a difference do you think small donors make? are you motivated to donate to a particular candidate or cause? "the new york times"has a story about small donors. looking at this story --

what you think about the effect of small donors text richard, a republican, joining us from tennessee. caller: how're you? i apologize for the former republican who was very rude to you. i don't understand the need for campaign donations at all. when people talk about buying votes, unless they're giving out bribes, why do people with all the news coverage, the media, the internet, the debates, why do candidates need all this money? they are rich already. to me, voters are just wasting their money.

politicians are wastin their money. they're putting money in politician's pocket and there is no need for this. host: run, republican in cincinnati, what do you think? caller: good morning. i think there is a point in making donations. host: we can hear you ok. caller: the guy who commented before does not listen so he is lehmann. i have donated in the past. it is more important when folks call and ask for donations and you let them know that you are politically understanding and to offer help calling in to radio stations and other things to make a point. i think small donors make a difference in the number of people that are donating.

that shows broad support for a candidate. host: do you think small donors are folks who will make those efforts you mentioned whether it is giving feedback or weighing in and getting politically active? caller: i missed the first part of your question. host: do small donors get politically active? caller: i hope so and i think so, yes. if they're willing to put in $20, people who are passionate and understand. host: democratic caller, in the winter of, maine, good morning. caller: my thoughts are that i am really impressed with the candidate running for president buddy romer who is the best qualified. i'm a registered democrat and i am so taken by his campaign strategy only accepting donations from small donors, nothing more than $100.

i donated $50 to his campaign last week. i think his message is really important. i don't agree with him on everything but certainly on this issue that big money and too much money is really -- has recorded our politics. i think you can see that they don't let him on the debates because his concern is asking governor perry and mitt romney to their major contributors are. host: let's hear from bill, independent scholar in sacramento, california. doing thello, i'm military conversion. when the city had a city hall at the military base -- host: what do you mean by military conversion? caller: there are 60 military bases and there was a cutback of 5% in the budget. mr. delans was able to realize

what was going on with the military and waste. by cutting back in the military and converting to disaster services which is what i do, if you can take the people in a charrrette atmosphere, whether it is a city not being able to communicate with another city out of the military base, it is the same thing as a voter. the people can participate with the charrette, you can determine what belongs in the environment you are dealing with. with the military base -- host: we're talking about the small donor impact. caller: exactly, the small donor would get his vote if you can direct your donors' money to issues. host: saint petersburg, fla. -- there is a blot a political action there this week.

what do you have to say? caller: i gave about $100, 12 $50 donations to present obama in 2008. i am 70 years old. i have been watching this long time. i think the system is so corrupted by big money that we can't even trace word comes from now because of the citizens united decision. there are all kinds of shadow pacs and corporate money. i am hard up financially. president obama has done virtually nothing in terms of the foreclosure crisis in florida. there is no reason for me to give this time around. one party is almost as bad as the other. host: we have a few other stories in the news --

scores of protesters were arrested in new york yesterday also looking at an obituary -- a 92-year-old battle of tammany hall. christina romer weighs n in "

the new york times." let's take a listen to comments president obama made last night at the congressional black caucus awards dinner. >> republicans like to talk about job creators. how about doing something real tax passed this jobs bill and every small-business owner in america including one in a thousand black-on the business owners will get a tax cut.

pass this jobs bill and every worker in america including nearly 20 million african- american workers will get a tax cut. pass this jobs bill and prove you will fight just as hard for a tax cut for ordinary folks as you do for all your contributors. [applause] host: president obama speaking last night at the congressional black caucus awards dinner. on "newsmakers"this week, lamar alexander discusses why he will step down in january and why he thinks the senate is bogging down in legislative action. >> can i ask about the president's jobs bill? will he get a vote? >> that is completely up to harry reid. >> how so? >> can schedule it anytime he

wants. senator reid has manufactured a crisis which is a cynical he knows that the house will send us all the money we need to approve for the rest of this year and the senate appropriations committee has already approved all the money that the president's disaster declarations and fema has approved. we could have been spending this week on the jobs bill and senator reid wanted to. you host: can see the entire interview on "newsmakers"son day at 10:00 a.m. at 6:00 p.m. and available online at c-span.org. our question now is what do you think the impact of small donors is on the presidential campaign. let's hear from michelle in detroit, a democratic caller, good morning. caller: good morning. the way i feel is i gave the last time to president obama

when he was a candidate. i am giving this time but i am giving this time of the limit. i am totally dismayed at what is going on in congress. the one thing that i feel as an unemployed american is that it is more important now than ever that president obama remains in office. host: did you donate prior to the last campaign? caller: i had never done it before. if it was available, i was unaware of it and i consider myself politically savvy. host:, as did you know and it last time around? caller: i donated $50. this time i will go to the max. host: bakersfield, calif., independent line, good morning. are you with us? caller: hi, my name is trudy.

good morning. in the last obama campaign, that was the first time i ever donated to a campaign. before this i voted for reagan and the republicans. i have completely turned away from the republican party now. people seem to blame obama for not passing things or the democrats polling a filibuster as many times as they did. i feel it is even more important this year that our little donations will add up and i feel

he has got to stay president. i live in bakersfield which sits on the san andreas fault. they will get one of the big earthquakes and you cannot even count on help. we may have to give up something according to the republicans like social security. i am really worried about obama getting in this year and i will get whatever i can. i am on social security now. it is not much but i may give $10 per month host: let's hear from jen who gave $200. caller: thank you for taking my call. i wanted to thank you guys for bringing up this very important topic.

this is the source of democracy, really, the fact that small donors will get involved. it is the most important thing you can possibly do even if it is $10 or $15. our government is basically currently broke, in my opinion. i'm a surgeon and i work very hard. i have worked hard to get to the point i am currently. i am in an underserved area and they consider me ultra-wealthy and i really think we need to work on this and i think we need to get all the incumbents out host: who donate $200 to? caller: ron paul. host: was that the last campaign

cycle? caller: last one and this one. i think he has a lot of good ideas and is often not heard from. to the extent that he should be. he has been fighting for sanity, in my opinion, in congress for many years. host: we have a tweed coming in from bill --

they say that wall street gives a lot of money and the financial sector and other corporations donate. charleston, south carolina, on our republican line. caller: i need to make four points and one of them is that you are so pretty. you need to go into the motives and did to this show. you are just adorable host: what is your comment? caller: i saw richard dreyfuss on a cspan show and he made the point that we need to return to teaching civic classes in all of

our schools and that should start in fifth grade. we need to get free press and we have pressed that is brought up by corporate. it influences on fairly corporations will always have more money to influence elections more than we the people and they will try to bankrupt the country so they can have a monarchy run by them. they are called john adam-ites. bc armstrong was running for president. we need to change the election field entirely. not only did i not have enough money to put a website up and launch a campaign, we are a excluded, the average american's that will and forced emigration -- in -- and enforce immigration get people to go to work. host: we will talk about third-

party candidates in a moment. caller: in 1876, it was illegal for any corporation to influence united states government with a three-year prison sentence and a $10,000 fine because they would always have more money and power. 15 years later after abraham lincoln was assassinated. the new world order apprenticeship -- plantation, a slave owners were your companies that are cheating we the people out of our salaries. it is nothing different than tell carnegie hiring that pinkerton's to suppress the wages. they on our government. i don't care whether a politician is republican or democrat -- a deregulation is a free-for-all for the rich. host: will have to leave it there. caller: good morning.

i made a $50 contribution for the first time ever for a campaign. host: why did you do that? what motivated you? caller: it is interesting because during the bill clinton time, i was highly conservative republican. i used to listen to rush limbaugh but then during the obama campaign, i found him more moderate as opposed to some of the impressions given by the conservatives.

i think small donations to send a message. it shows that small people and individuals who don't have as much money, they are getting out to show their contribution. that also shows the level of non-financial construct -- contributions. they make calls and to other ways of helping. those are the two things that are important. those are the real people. differents get a point of view on email.

coming up and 45 minutes, we'll talk about how the debt crisis in europe is affecting the u.s. economy. up next, a discussion on third partisan politics and the efforts by some to get a third party candidate elected for office.

a news update from cspan radio. >> discussion of the days had fun begins at noon eastern time when cspan radio airs five network tv talk shows. we begin with "meet the press." the topics include a possible presidential shut down and middle east peace. that begins at noon. they will have new york mayor michael bloomberg. also israeli prime minister benjamin netanyahu. at 1:00, christianne common port talks with the obama campaign manager. at 2:00 p.m., fox news sunday talks with republican senator lindsey graham, a member of the senate armed services committee.

how the south has created an american public culture. also, learn about the relationship between independent book stores and publishers. and on american history tv on c-span 3, tour 11th president's burtsdz place a discussion with charlotte civil rights leader on his experiences during the lunch count sit-ins and visit

the gold mines where gold was first discovered in america. book tv and american history tv in charlotte, north carolina. this weekend. >> you don't play politics at the time of national crisis. you don't play politics during the economy and you never ever play politics with people's jobs. >> with the british house of commons in recess, annual party conferences are under way. watch british deputy prime minister key note from the liberal democrat's conference tonight at 9:00 on c-span. and the week's ahead party conferences with leader party leader and prime minister. >> in my opinion, i think that the bounds of academic freedom have just been pushed too far. >> in the faculty lounges suggesting that ten years job for life entitlement mentality need to go.

>> there are professors of nutritional study who have tenure now. and when pressed someone at the aup or professor who is toing the party line will say, well, we need someone who to have tenure and security studies so they can talk about immigration even though it's controversial and someone in nutritional studies needs to be able to say something controversial about obesity. >> that and other reasons why you won't get the college education you paid for. tonight. host: elliott acerman is chief operating officer for american select 2012. good morning. guest: good morning. host: what is american select? guest: we'll be holding the first online registration. any registered voter can be a delegate to the convention that we're going to hold and the ticket will be on the ballot in

all 50 states. host: you don't have a candidate and you're not a third party? guest: we're a second way to nominate a president. americans elect can go to americans elect.org and get involved and we are a tool to put the best americans forward by creating a draft movement for them. host: what is the goal of this? oftentimes people are interested in a particular candidate or personality they want do see. but if you are removing at this point the name of someone if it's more of a movement of purpose, what's the point of it? guest: i think the point is most americans that we see feel disenfranchised by the two major parties. we have the republican party which is out at the far right of our country, the democratic out at the far left and we have this huge disenfranchised number of americans, 44% and growing in many cases that don't feel like they have any voice. americans need a vehicle to give them a voice by allowing

them to put a ticket on the ballot in 2012. so what we're seeing here is we're not a third party, because this is a real political innovation. this is a first time that 50 state ballot access is going to be achieved for a ticket that's named by the american people. that's never happened before. host: you want to join the conversation about the third-party presidential bid, here are the numbers 20 call. our guest is elliott acerman with americans elect. who is peter acerman and how much money is he contributing? guest: peter acerman is one of the individuals who came to this effort early on and he like many others provide it had seed money to do this. and so americans are basically, it's an effort is that 1/60th the size of the amount of funding that people are going to be spending in the two major parties for their campaigns. to be clear all the, like we

don't take any money from special interest groups, pacs, trade organizations. in addition, all that goes to surmounting blament access. ballot access is a huge problem to getting access. we have already collected 2 million nationwide. so there's a huge appetite for this. last month we submitted 1.6 million signatures in california. host: we can look here at research looking at the 2012 generic ballot now split as fewer independents back president obama looking at all registered voters how the numbers are breaking down just over the last couple of months. it's now going down for president obama up slightly for republican but the number of folks who say they are other or undecided has gone to 19%. among independent voters that's up to 30%.

why do you think americans are going to be looking for another choice? do you think this is a year that could happen? >> absolutely. we have a dysfunctional political system going on. when you have the president announcing from the oval office that our politics is dysfunctional it shows we need to do something to get our politics back on track. and americans elect is an effort to do that. the genius of our country and our founding fatsers is the last self-correcting mechanism that exists is the american people. and americans alike is a tool to do that. and americans elect we are taking what have traditionally been the functions of our parties and making them the functions of our delegates using the internet and platform. host: there's a piece called, the pit fall of the third party candidacy and looks at how hard these hurdles can be to overcome. a strong independent candidate

from the center could have several outcomes. how could this actually happen? guest: well, i think that it's a misnomer right there. i read the piece and i think it pre-supposes that the republican and democratic parties are pre-ordained to have all the political power of the united states. we look back to our founding fathers and our founding documents we see nowhere are the republican and democratic parties mentioned. and what we're doing is trying to open up the space for great

republicans, democrats, and independents run. how many americans have gone and felt they have to choose between the lesser of two eevels? this is the opportunity for them not to feel that way. this is the tool to put the best americans forward. we're taking care of ballot access. >> looking again at their piece in the "washington post." host: let's go to the phones. liz from chicago on our democrat's line. good morning. caller: good morning.

i'm actually trying to figure out what your purpose is because rather than unifying the country, which is something that needs to be done, you seem to want to keep further spreading the people in the country out so that they can't ever come to a unified consensus that, as to who should be the president of the country. guest: i think our purpose there is exactly the opposite. the ticket that comes out of americans elect is going to be one that's not anchored in the special interests and ideologies of the two major parties which we're seeing as the root of so much deviciveness. the ticket that comes out is going to be a bipartisan tibet meaning the president will have to reach -- tirkt means the president will have to reach across and pick a vice president outside of their

party basically taking a first action in their administration, and so many others, as we move towards policies that can actually get support from both chambers of the house. host: joe, independent caller in pens, florida. caller: yes. with the current political process, if you're not one of the parties you can't get on the ballot and if you can't get on the ballot you can't get elected. so i don't understand how, unless we have a viable third party, that we can ever achieve any honesty in government. guest: i think a lot of folks share your sentiment. they feel frustrated that the two major parties have a complete monopoly and strangle hold. george washington and thomas madison both warned about what they called factions in our government warning that those factions would find it more advantageous to vex each other than to actually come to the

solutions of the day. what's going on in americans elect is we're not trying to form another party that has special interests we are trying to form a better way to put forward the best democrats, republicans, and independents. let's give every american more of a voice in how we select our leaders and let's leverage our newest technologies to get us back to our values which is nonpartisan politics. host: washington, d.c., terry. republican caller. caller: hi. all of the third parties agree we should stop the war. our murder rate would be cut in half, our taxes would be cut by over $400 billion a year. you shouldn't have a war on your own people. it costs $2,500 a year for outpatient drug treatment and costs $40,000 a year to put them in prison. what's better for our country,

especially at a time like this? host: is this issue so important to you that you would vote for a candidate based on this one issue? caller: yes, i would. host: let's go to our guest and ask about some of these issues based motivations. how do you marry them under one umbrella? guest: i think that's great. you've outlined an issue that's important to you and that's a drug war and i don't see any candidates talking about those issues. so what we're trying to do is invite everybody into the debate. let's have people discuss the issues that they feel are the most crucial not just the one that is are politically expedient and get to a higher form of political discourse. the political discourse we're having in a nation right now is the needs of the people. host: let's hear from abe abdell. independent caller santa rosa, california. caller: my question was you just mentioned inviting more voices into the debate. how would americans elect further access to third parties

-- third-party parties into debates? they seem frozen out. guest: that's just it. the first thing you do when you come to americans.org is you'll be able to help shape a platform of questions not a platform of issues. we don't have any specific policies. questions drive some delegates to the candidates and those candidates have to answer those questions. and to your question about debates. the cabbed dates all have to show support of at least 15% to qualify for those debates and all polling we see right now show that the american people would support a third ticket well above that 15%. so i think 2012 is going to be a three-horse race if the two major parties continue competing in such a way, it's going to shake things up. host: elliott acerman chief

operating officer. looking at a recent "l.a. times" article says one of the main financial backers is your father, a private investment executive who made tense of millions of dollars working p junk bond trader. he has given $1.55 million to americans elect. the articles gos on to say you changed your designation to a 501 c 4 social welfare group. do you have other big contributors? what is the money that it takes to push this effort through? guest: we have a group of c contributors who help pay the fee, legal fees and the website. so that's what's getting financed here right now. if you look at it like any business you have to get initial seed donors. that finance were put in place. this whole project is 1/60 the size of the two major parties. we don't have to advocate for

any candidate or issues and we give no money to the same. so let's talk about what's getting funded here. it's ballot access to the american people can have a choice. host: folks have come with their own bags of money like ross perot. do you have to look for a standard bearer who brings their own money? guest: no. that's the beauty is what's getting funded is the ballot access so you don't have to have an individual like ross perot or a mike bloomberg. those barriers are going to get taken care of so if you have a candidate that has 50 state ballot access thoots going to be named directly by the american people. host: looking at the website here. it says signatures so far, 1.7 million.

jacksonville, florida where hazel joins on the republican's line. caller: people just need to do the right thing. this is supposed to be the american dream and stuff they talk about the rich, poor, middle class. we don't like to be poor. if all the rich would help one family a year, take it off on their taxes or whatever, this world will be better off. it's about what people want. ain't nobody going to bring no peace but the good lord jesus christ and gee hovea god. that's the only person who is going to bring peace in this world. guest: i think your point right now our country is sitting here with some real problems and we need people to come together and to unite instead of the hyper partisanship we're seeing in our government isn't getting us any closer. host: ken with npr has a

political column. he talks about some of the hurdles as being things like the personal wealth it takes, the money involved and there hasn't been a successful effort

yet. guest: well, to your point it's not surprising. they've never seen it before. we call it pat earn recognition. if you look at larger trends as we've seen that the internet, social media, the tools we have at our disposal have flattened every other atmosphere of our life. the only place where americans are forced to choose between brand a and b is in our politics and that's not going to withstand the time. americans elect is an important first step to give the american people more voice will by allowing them to have a really meaningful say in nominating a president. so the barrier to entry here has been removed. a method for people to communicate is taken care of. all we need is for people to come to americans elect.org so we can have a third choice. host: looking at the blog on npr.org. running through some of the past presidential candidates. george wallace back in 1968 got

123395% of the vote but -- 13.5% of the vote. john anderson in 1980 was a u.s. representative from illinois. he did not carry any states but he did get 5.7 million votes at that time 6% of the vote. ross perot in 1992 and 1996. and then going on to ralph nader in the year 2000. he was running as a consumer activist and he got 2.7% of the vote. but people look at the influence it may have had on florida which of course ended up deciding the 2000 presidential election. do you have concerns about your efforts waying the election in a way that might not necessarily show the majority of americans' opinions? guest: i think the majority of americans show that the community of independents who don't feel well represented by the republicans and democrats is the largest constituency

that's emerging right now. so i am concerned that the majority of americans aren't being properly represented. i'm concerned that they aren't being represent bid the republican and democratic party. host: let's go to david calling in from utah. caller: hello. my concern is i would like to eliminate political parties altogether. explain to me how best i might do that. host: and why do you want to see them eliminated? guest: i think they are at the root of the disunity of the american electorate. if you watch c-span you see nothing but disunity from the two parties. they're the root of all dissention american the american populous. guest: i think there are a lot of americans who feel the same way as you do. that the two major parties, although they have served us well for hundreds of years they

don't necessarily do a good job of representing the american people as far as their special interests and the patronnage that they represent. additionally, if you look at the way we organize now as the people, we use many other tools to do so like social media and the internet and ultimately political parties are just a tool for political organizations. why don't we use these platforms maybe not to get rid of the parties altogether but to at least allow more americans to have a voice and the positions that the parties are taking and the leaders that they're choosing. host: one of our callers ask guest: sure. well one of the great things about this is yes they would receive matching funds in four years but in addition to that you'll see that the way the laws are set up right now is that in an election where we have campaign finance laws so that individuals can receive matching funds, you can only receive those matching funds based on the percentage you get in the last election. so you have to compete in an

election in order to get funds in the next election. so it becomes this scomb possible self--licking ice cream cone. host: sasha, democrat's line. good morning. caller: good morning. i'm so happy to have elliott acerman on tv today because i had a question about someone i saw on c-span that doesn't seem to be getting any more news coverage and that's buddy romer. i know he's trying to find money and special interests and politics. how can i help him get on the platform? he wasn't even on the debate included and he has some wonderful ideas. what can i do to get him on the ballot? guest: well, if he's a candidate that you feel strongly about you can go to americans elect.org and you'll be able to put forward him as a candidate and start a draft movement for him, organize people in your community both on line and off to get him to compete and compete on his

behalf. and if buddy romer becomes the individual who successfully competes for the american select ticket he'll be on the ballot in all 50 states. host: you've mentioned wanting to see a middle ground. you talk about the extremes to both right and left. but what if folks go on to americans elect and nominate a candidate, pick a candidate who is not in this centrist realm that you envision? guest: what canged date are you thinking about? host: maybe none at all. one of the candidates who doesn't make it through the nominating process. any number of politicses who still might appeal to people. guest: let's say your candidate from the far right or far left. the key is as a condition to run they have to reach across the political space and run with somebody from another party. so for those who are on the far far right or far far left that's too much of a bridge to gap. how can they run autsdzentically as a far right or far off left candidate when their running mate is somebody who espouses a complete

ideology. host: let's go to warren, michigan. republican caller. caller: under the present system third parties' a dream. people in the republican and democratic party tell you who you can vote for. i would suggest that we go to an old-fashioned primary type election where everybody runs in the top two or -- and if the top two don't get a certain perge of the vote get a third vote until somebody gets enough votes. guest: to your point, i have to say i disagree with you. i and i think many other americans don't accept a political system by which the

two major parties as you said tell us who we can vote for. i want more choice on the ballot. i think there's millions of other americans who want more choice on the ballot. all the polling shows us that. and we are a platform. so everyday americans can get put forward the best americans to run. and the two parties don't have to tell us who we can vote for. host: do you see another country that has a political system that has more opportunity for candidates who aren't part of a locked-in system to get involved? guest: not necessarily. i think what we're seeing here and what we're doing at americans elect is a real innovation, an innovation in democracy. we haven't seen anything like this emerge before. but everything you want to say about the state of the american economy, some of the challenges we're facing, the one thing the united states has never outsourced is innovation. and how suiting it is that a true innovation and democracy be something that emerge here in the united states. host: sam writes on twitter.

so what do you think? after there was some success by ross per oth in his first run that there was a movement by the parties to try to control things and keep things in the two-party system? guest: i don't believe there's any type of imspirtle movement. but i do think that as we saw that ross perot in the spring of 92 was winning in the poll. and then his candidacy went into some strange areas and he still competed very sexepttively at the end. but -- competitively but what happened is this is the first time 50 state ballot access has been acquired. so all of those hurdles are being taken care of now we need the american people to show up have their voices heard and have a more dynamic competition going on and what we're seeing go on. host: walter republican in butler, indiana. good morning. caller: thank you for taking my call. i do appreciate it.

i voted for ross perot and i was right there hoping for an independent voice. i believe the two major parties are basically the same. they just take turns wearing the mask. an independent voice comes from average americans, common sense folks, to just say i like this particular person. it seems like the media and the powers that be try to guide us or try to influence us. but like the gentleman said, your guest, it comes down to americans having accountability and having a voice and deciding to get up off the couch and make a difference. and that what you tolerate you cannot change. so we've tolerated it and if we continue nothing is going to change. but i believe that there's a new voice in america from young to old with the internet and people talking about the more you allow debates like i'm a republican dying for michelle buckman kind of constitutionalist but they

tried to shut her down and she made a great point. she says if you're going to vote for somebody, don't vote for somebody thinking they might have a better chance of winning. vote your heart. and i think that's what americans have to do. but they won't because they're comfortable with their tv and their little world and they listen to what the news says and they don't get up to do anything. so until americans just get up and have their voices heard we're going to have the same thing. thank you for taking my call. guest: to your point, i agree with all of that. i think that the american people want more choice and i think right now we as the people are greater than the level of governance that we're seeing and the level of political discourse. the only place where i would disagree is i think we as americans are a great people and when all politics gets dysfunctional and when our governance becomes unresponsive to the people, the people have the tools and the people have always shown the will to take things back.

so i would encourage you to get involved at americans elect.org. this initiative only works if folks get involved and if they the american people elevate the debate. host: chief operating officer of americans elect 2012. prior to doing this, you served in federal service for eight years in the marine corps as an infantry officer, and in the intelligence field, several tours of duty in both iraq and afghanistan. now, the group he's involved with is americans elect 2012. here's what matt miller, a senior fellow at the center for american progress 45d to say in the "washington post."

what do you think about his first point that your group won't succeed without a major advertising campaign which means wealthy contributors? or the other option that someone steps forward with his or her money? guest: i think you're picking from what you want to read from that column. there's some good things in that column. i think the field that ripe and the electorate wants more choice is what's going to allow this to come forward. ultimately none of this works if there's not an appetite for it. everything that we've seen and evidence that we have shows the american people want something like this. as to your point that this can only suck seize if we had a third billion dollar campaign, we are not the we heemyutsdz of the republican and democratic party. we have definitely the david against gol eye yatsdz. we're removing a significant barrier to entry with ballot

access and just like you look at the media entry right now. barriers have been removed. any american with a laptop can be a reporter. look at fields like online banking. you have great success because barriers to entry is being removed. americans elect is looking to flaten the political playing field and give every american more voice. host: in the piece, how billionaires could save the country. but he does go to the point it takes the money to have the ad

campaign. guest: i disagree on that point. i think the only way to become the president is to spend a billion dollars. let me ask you a question. in 2008 did you watch president obama's channel on direct tv? host: we can ask our viewers that. guest: i didn't watch it. i would imagine many viewers didn't watch it. but it cost a lot of money. host: and what does that mean to you? what do you get from that? guest: what i take away from that is a lot of that money is just burned up in smoke and big tv buys that don't do anything. it's very analog. it's the old way to run. people aren't engaged in the old ways any more. they're engaged on line, in their commupets. and that doesn't take a whole lot of money. so wouldn't it be great if there was a new way to run. host: call from carl in florida. caller: i would like to see a third party that is a parliamentry party. i see everything that he is talking about could be solved by a parliamentry party.

there were no problems in parliamentry countries about getting third and fourth parties. you have coalitions. they work. they work sometimes they work not sometimes. but i see no reason and i never heard it put on tv that we should have a parliamentry system. this doesn't work. they're all bought. host: have you checked out the website americans elect.org yet? caller: not yet but i will. host: what do you think? caller: i think it's a good idea but i think it's based on the same system. in other words, our congressional system, we say it works. it didn't work during the civil war. it hasn't worked now. if we had a parliamentry system you vote on a panel, you vote on a party system. they're elected, they input their system to the country. if you don't like it, you vote

them out. here, one senator holds the entire system in awe because he doesn't like a certain bill. host: let's get a response. guest: i think to your point what you're expressing is the frustration that many americans feel and that one senator holds everyone hostage because are they going to deesked to the other side or aren't that. what we're doing is by forcing that ticket to reach across the political space and pick a running mate from another party or political persuasion, we're incentivizing those types of defections where 10, 15, 20 senators or members of the house can basically defect on an issue, can vote with the other side. and by encouraging that and providing incentives there in the in between area of our political space, we're going to get more stable solutions as a people. right now we're an entire bill or piece of legislation hangs on whether or not one member of congress is going to defect

gives us incredibly unstable governance solution. host: robert, independent line. caller: good morning. i kind of disagree with you about the issue regarding the media. i still think most people are controlled by television as to how they get their information. and until people remember that the ave waves belong to us and not the corporate giants and you aren't going to get your message out. take debate. there were third party candidates in the last election since the -- we didn't get to hear from them because the two parties controlled the message. but this idea that it didn't work in the past so we should quit trying like the political junkie says, if we took his idea, well, treating cancer hasn't worked for the past thousands of years so i guess we should quit trying to cure that disease. no, we've got to do something to cure the disease that's corporate control of our government. so i think you guys are doing a

great thing and as far as ralph nader costing mr. gore the election, the supreme court stopped the count. so if it had gone to its conclusion al gore would have been our president. but the people aren't up in arms. we need to get -- most of the people don't vote. we need to get people up and off their butt. guest: to your point, i think the first one about the media, the landscape of the media has really changed in that we have 24/7 news cycles. i could be sitting here today talking about americans elect free of charges thanks to the people at c-span. and we see it around there's a huge amount of media that ultimately isn't paid for and a third ticket is going to be a compelling story and something people want to hear about and talk about. so the days you had to do these large commercial ad buys, it's a thing of the past. and i used the example before about the barack obama channel.

it's not used to the same effect that it once was. to your second point about the debates, again, there's a very clear threshhold and that's fortunately a nonpartisan entity that's 15% international pole. as we discussed previously, ross perot was winning the election in the spring of 92. so there's a huge appetite for a third ticket that isn't anchored to the ideologies of the far right or far left. and my strong belief is that that individual will have more than 15% and would be in the debates. and to your last point about the political junkies, listen, there's a lot of skepticism about the idea that this can work inside the political clouts of washington, d.c. but hearing from folks like you and the response we've seen thus far, is that same level of skepticism about the status of our politics doesn't exist amongst the american people at large. so instead of bemoaning our

politics and then bemoaning the idea about real change, why don't we do something to elevate the debate and try to get our country on a better political footing. . .

hyper-cess rewards' partisanship and deters folks working together. it has been basically to lose your seat because you did not go far enough to the right or left. it is absurd that a minority of citizens who could -- can determine who our elect doors -- select will be. americans elect is an effort to stop that kind of hyper- partisanship and get us closer to solutions.

host: take us through the timeline. you have the various steps. when is this going to happen? at what point is it too late to get involved? guest: it is never too late to get involved. the website is up and live. anyone can register and become a delegate. in the spring of 2012, we will have our convention. individuals will be able to draft candidates. this is going to be a true innovation in our political process. we're taking the functions of the political parties and making them the functions of the delegates to the americans he elect. you can draft candidates to compete in the election.

we will have them aimed at the end of june of 2012. that candidate will have a 50- state ballot access. host: do you think that is enough time to have a can of it get out there and get numb? guest: candidates will be emerging throughout the process. the parties did not formally announce their candidacy until august of 2012. host: elliot ackerman, thank you for being with us. coming up, we will talk about pensions and have a discussion about the european debt crisis and its impact on the united states. north carolina will be featured this weekend. our local content vehicles visited numerous locations to highlight the city that will host the 2012 democratic convention. here is where they are in the

planning process. >> we're here in beautiful charlotte, north carolina, the home of the 20's will democratic national convention. we are working hard with our partners in charlotte, with the mayor and others, to get everything lined up from construction management and construction components. we are about one year out of the president of accepting the nomination at the time warner cable areva. we're on track. we're having a great time. the hotels are booked. the construction process is in the works. that is the request for proposals to construction companies to build the stage you will see on tv the week of the convention. we're working with our partners in security and transportation. we are working with our community partners to launch a

robust vendor directory that will be a real platform from which to access a lot of business opportunities with the democratic national convention. host: for more information about the local content vehicles schedule, goend's online. we will talk about europe's fiscal troubles and the impact on the u.s. economy. there is. news this week as we look at what is going on. -- there is big news this week as we look at what is going on. the news cycles have been looking at how what is going on in europe is making a difference over here. take us through what is happening. guest: races had difficulties

for about 10 years in meeting its debt obligations. -- greece has had difficulties for about two years in meeting its debt obligations. ireland and portugal also had difficulties. these are results of the financial crisis went through in 2008. that slowed growth and caused the bills in bailing out the banks. that was manageable until doubts started to rise about whether european officials would continue to stand behind greece to keep in the eurozone. when the questions to the tune rise, people interested in greek debt -- when the questions began to rise, people invested in it greek debt started to withdraw and sell the stocks in banks that have investments in greece. they started looking at other eurozone countries that were heavily invested in said that

italy and spain also have debt to gdp ratios that were very high. they start withdrawing money from banks that also have heavy debt loads with those. that starts spilling over into the u.s. economy. when you start to have fears that europe is going to have a major recession, it goes back to the u.s.. the european reunion is our largest trading partner. 17% of our total trade comes from the european union. that would hit exports. that is one growth area that hans done relatively well. because there are a number of u.s. banks that lend to european banks and they themselves will some european debt, they are going to start contracting and lend less into the u.s. economy. it will be a two fold effect.

host: this says european leaders need to quiet the voices threatening to tip the region back into recession. that is what the international monetary fund warned on tuesday. take us through the move that creates versus what might actually be happening. guest: the imf has been saying this week that we are in the vicious cycle and have entered a dangerous new phase. when you have weak growth and then start to contract to a government trying to bring down your fiscal deficit, and when questions start to rise about

whether the banks will be hit because you cannot pay the debt, people withdraw even more money. the banks lend even less. growth weakens further and it gets harder for governments to pay their debt. they have lower tax revenues. it is a vicious cycle that starts. if you withdraw money from europe, the banks exposed to europe to find other ways -- the european banks have to find other ways to get funding. they withdraw their money from other parts of the world. we have seen korea and poland that had been receiving funding from: -- europe are now having money withdrawn from them. that is causing the problems to go global.

the message from the imf is that you have to take a political stand. you have got to make it clear to the financial markets that europe is committed to a monetary union. you have got to take the steps longer-term to make it work. you also put in place a plan to bring down your fiscal deficit. that has been the message from the imf. you have to convince the markets he will not allow greece to go down and with it the rest of the eurozone. host: stella dawson is the economics editor with reuters. we're looking at the european debt crisis impact on the u.s. economy. we have numbers for you to call. let's go to new york city where michael joins us on the independent line. caller: you look really lovely

today. i happen to be a super expert in bank accounting from the graduate school of business. greece has made the $200 billion. that is not your problem. the situation you have in northern europe with germany, sweden, switzerland, and the u.k. is that they are traitors. their losses are about $20 trillion. why they are not showing the losses is because they are bucking the accounting has cost accounting, what you pay for the contract.

worldwide, your book at market value. the loss will be over $10 trillion. the reason the banks are not alone in -- loaning to the banks is because of the trading losses. the stuff done in europe is 100% were false. here is why it is worthless. -- the stuff done in europe is 100% worthless. here is one. i started out with jay rockefeller at chase bay. that may be before you were born. he stated to me and i will never forget this. he said that traders die broke. the situation now is you have got to move in on the trading floors. the stores but greece, ireland, and spain -- the stories about

greece, ireland, and spain, that is all p.r. guest: i think he made an extremely important point. it is feeding on itself in this vicious cycle. the point is extremely important. one of the reasons this crisis has expanded is because there is little transparency about what the european banks in particular have on their books and how they price them. banks have to balance efforts and liabilities. if the liabilities go down in value, then you have to set aside more of the reserves. because there is not much transparency about what is on the books, the european officials found the banks were in pretty good shape.

what they have not done was price the items on the books, the market value, as they were currently being priced. apart from the derivatives and credit swaps, you take just the government debt that has been reserved at zero. it had been considered a risk free asset. if it is risk free, you did not have to set reserves against it. yet the market was pricing the debt as quite risky. if you then marched down the cost -- mark down the cost of the debt, it starts to raise questions about the capital level of the banks themselves. when you start to look at the other exposures through swaps, and derivatives, and other products, the problem gets much bigger. the imf made an estimate that if you look at the total risk exposure of the european banks,

it now has risen to somewhere in the realm of 300 billion euros. i agree that is a critical component. all the pieces into together. why it has accelerated in the last 30 days and why the stocks of fallen by 40% in some instances is because of the trading concerns that they do not have enough capital on the books to deal with the problem. host: the world bank had meetings in washington this past week. " talks about times the new imf chief seeking a common european business. -- vision. some of her former colleagues have been concerned. they say she is partly responsible for the collapse of confidence.

she has dared to stay with few of them would admit publicly -- european banks were not as sheldon from the storm as they might seem. talk about the work that is going on. guest: she played a very important role in saying that this is up to the european politicians to recognize the extent of their problem. they have to demonstrate the political will to do something about it. europe does have the capacity. it has put in place a european financial stability fund that has $440 billion euros available. this could cover all the debts of greece. the bigger issue is what the cost would be if other countries are also put under threat and walked out of the markets and cannot access government bonds.

that can be achieved if you take measures to leverage the european financial stability fund. what imf officials and to the geithner have been proposing is similar to what we have been doing in the nine states since 2008 with the tarp program. it gave back the ability to get government -- guarantees from the government. the european financial stability fund could be leveraged up five times and it would be enough to cover potential losses if italy and spain were to face problems. that is what she has been pressing for, european officials to consider more creative ways to use the resources at their disposal to stabilize the situation. host: we have a caller on the line from whales in the united

kingdom. caller: 5 would like to ask can make a comment to stella dawson. in relation to the united states deficit ceiling, by the time he finishes office, we're looking at a debt of $16 trillion. that radically affected the parlance of economic power in the world. there has not been balance for a couple of years. europe has been trying to take a lot of the slot -- slack because the u.s. is incapable of doing so. now europe is failing. do you think it is about time that we actually look at seriously seen a reduction of the u.s. currency in relation to

the other currencies so that if anything fails again, we can see the rest of the world's currencies being able to balance things out. at the moment, having won currency as the world leader means there is no checks and balances system. thank you very much for having me today on c-span. guest: you raised a number of interesting points with that question. let's look at the u.s. deficit. it is large. it is growing. there are significant political problems that president obama is facing in working with the congressional leadership in agreeing on a program to bring it down. the u.s. debt to gdp ratio is headed towards the 98% level. that is nothing compared to greece. that is expected to rise to 190% on some trajectories.

japan has about two under% debt to gdp. it is large and growing -- japan has about 200% debt to gdp. it is large and growing but not unmanageable. because the u.s. markets are deemed highly liquid, there is a preference to go into u.s. assets. that has made it much cheaper for the united states to fund the deficit it does cause of global imbalances. there is discussion going on since china has been rising as a world power and is now number two or three in terms of total gdp output of switching to a multi-polar currency system.

it would take away from the united states what has been called the exorbitant privilege where it can fund its debt at lower levels. how it would happen is difficult to say. the euro currencies have become a significant player in the currency reserves, the holdings of countries, what they have in their savings accounts. it accounts for about 20% of world reserves. it has been growing. if it were to be dismantled, that removes one of the currencies that could be in the system. then there is the chinese currency that the officials would like to become a bigger player in the world. the difficulty there is they control the value of their currency.

they intervened to keep it very weak to remain strong exporting country. they have allowed it to rise about 7%. the u.s. is putting pressure on them to have appreciate further. if it were to move to a more flexible currency where it was freely traded on the open market that requires a significant amount of technical measures to be taken, you could slowly moved to a situation where you have the dollar, the euro, the yuan, the yen that you could settle your trade accounts in. that is probably where the world is headed. it takes time for changes to happen. the u.s. dollar has only been the predominant world currency since world war ii. changes can happen. there is a lot of discussion

going on about the ways in which that's which might occur. host: this is at a news conference on thursday ahead of the world bank meeting. >> the current economic situation is entering a dangerous phase. there is a situation where the growth has slowed down. you will see that we have reduced our forecast on a global basis we see a downside risks on the horizon. the recovery that one was expecting has weakened. it is clearly a risk that we see from an economic and social perspective. because we have less growth, we see less jobs. if we turn to the various

categories of economies and look first at the advanced economies, we know there is this , heavy debt of sovereign's households, and bank risks that could have serious repercussions from an economic and social perspective. host: that is the imf managing director speaking on thursday. stella dawson is our guest. did she say anything surprising questi? guest: i think it was expected the imf would lower its growth forecast. we had seen a slowing in the united states and globally. that accelerated when the row over the deficit reduction plan

erupted. the expectation had been earlier this year that the u.s. and world economy was going through a rough patch after the japan earthquake. that caused supply disruptions and depressed growth unexpectedly. in addition, oil prices rose significantly. that withdraws spending power from the u.s. consumer. that caused a second shot. the third shock was the concern that the u.s. might default on its debt. three factors led from growth going down from about 2% down to 1%. the expectations from wall street economists had been that we would have a slowing. globally, because the world is

so integrated, because asia has been growing quite strongly but is so dependent on exporting to the eurozone and the united states, as soon as they see slowdowns in those economies it feeds back into china, indonesia, the philippines. what needs to be done to solve that is that the eurozone needs to put in place a clear program to stabilize the financial markets and the abilities of countries to pay their sovereign debts and put itself on an even path. in the united states, there is a need for a medium-term deficit reduction plan to be put in place so there is confidence that the u.s. knows how it will deal with its debt. in asia, they are working on developing their domestic economies.

the countries are growing so fast that they are developing a middle class that will have house, furniture, and shopping malls. the faster they can build their own middle class, they will be less dependent on exports. then you can start rebalancing the economies. it takes time. peg on the hear from democrats' line from arizona. caller: i am an average u.s. citizen and not very knowledgeable about international economics. she briefly touched on it before with your. i have seen a few things that suggest it appears to me that italy and spain are facing perhaps more serious economic

problems in the future. are the countries like italy and spain, if they get into greater difficulty, is that a problem that is too big to bail out white grease -- likeone is the d cannot be addressed? guest: that is the basic fear driving markets downward at the moment. if italy or spain were to fail, you talk about 2.3 trillion euros. that is a lot of money. italy has just put in place a new budget plan. it is projected to bring the country back into a primary

surplus -- or balance accurately, by 2013. if they can stick to that plan, which the difficult politics and on certain -- uncertain leadership, berle as tony being under investigation for various sex scandals, it has questions on its ability to stick to its deficit reduction plan. but its debt to gdp ratio is not out of bounds or unmanageable. there is more a question of italy sticking to plans to bring down the budget deficit and keep that on track. the numbers are not to huge such that it is unrealistic to do that. unlike greece, where you see a contraction of gdp in the range of 7% and that is caused rioting on the streets. they could bring their fiscal

house in order. what happens is that the same thing called market confidence. as market confidence. -- deteriorates, that the european leaders -- are they absolutely committed to keeping the eurozone together? there are basically two approaches on how to deal with this problem. the one led by the germans is that you have to have fiscal contraction, if you have to take the paint, and you have to it take the medicine, whatever of the cost to do it. the other is that you cannot force too much fiscal discipline down those countries if it slows growth to such an extent that it causes political upheaval.

moreover, you have to stabilize market confidence. you can not only do it by fiscal discipline. which is the best way to go? some of the germans have been saying, let greece go out of the eurozone. that has spread the fear even more around the eurozone and into the financial markets. each factor feeds on the other. getting back to the point i made earlier, you have to find a way to break this vicious cycle of fear. the more that the price of the dead in italy and spain falls in value, but costly at -- the costlier it is for them to go to market to fund their debt. higher interest will throw their budget plans half of black.

what the discussions going on is to break the cycle, let's put a safety net under all the eurozone countries and say, we have enough money to bail everybody else. 2.3 trillion sounds like a lot, but the federal reserve holds that level of debt on its battle -- balance sheet to keep the u.s. economy on track. there are resources to do it. you can do it through this special fund that they have set up. it needs to have some additional proposal -- approval in the next couple of weeks in the european parliament. but this could be very clear that europe stands behind the eurozone and they will use all their financial resources to ensure that italy and spain did not default. then it will probably not have to use that money. that according to the economic projections of wall street investment houses is a lot

cheaper than allowing the eurozone to break out, which could cause contract ends -- contraction about to 60% in some countries. i do not think anyone wants to go there. europe went there in the 1930's and you know the consequences of that one. host: stella dawson of reuters, you have served as a global editor for economics with reuters. you served in a central bank and also in an equities corresponded. some headlines from the reset newspapers, global economy pushed to the brain. talks aimed to boost rescue funds. from the "baltimore sun" a few days ago.

and going on to reuters, looking at the message that timothy geithner it delivered. he bluntly told european governments on saturday to eliminate the threat of catastrophic crisis by teaming up with the european central bank. making sure that they have access to affordable financing. how were timothy died near -- geithner's words, where he says how blunt comment and it tends message, was this same as a reprimand? guest: europe does not like to be lectured to. the united states does not like it either. he had gone to poland and that

they were saying, he has problems back home, thank you very much. it's an interesting option in a way to tackle the situation. their two elements to it. he is trying to separate the two. what he is suggesting by saying the european central bank should work with the european financial-services fund is that the european central bank could buy up at and deny them ad -- ad infinitum many countries' debts. they are saying that that would monetize the debt. and that would be inflationary down the road. germany has a history of

hyperinflation, which led to the last rise of national socialism. that is deeply embedded in germany that they should not do that again. the counter argument is that the european central bank has the power to be able to provide this eventual -- the essential funds to stabilize the situation. into it quickly, and given that inflation is not coming up, currently 1% in the euro zone, it would not cause inflationary problems. and you can withdraw the policy once the situation stabilized. geithner is suggesting that they should work together to find ways to fight that in the market for which there is little investor demand, which would

require interest rates, which would cause more economic problems for the country. they can work together, they could bring rates down and stabilize markets. and they restore confidence. but it takes leadership. host: we are taking a call from england. do we still have you, graham? caller: i take issue with what you say when you say that the greek debt crisis started in 2007. i would argue it stoddard when the track must -- it started when the drachma joined the bureau. what you had as well was a case of all of these countries receiving match funding and

inflating the projects as well that they were receiving the match funding for. that read on -- let on to audits. -- that led on to audits. guest: i think you are some right. there have been some nasty revelations about the measures the great toe -- greece took to enter the eurozone. around 1985, it was not initially included because it did not meet certain measures. it had to bring its budget down further. it turned out that by the early 2000's, there is revelations that it got into tricky accounting, that it had messed around with allen accounted for its defense spending, for instance. so they have not brought their budget deficit down to the level that they had reported and snuck into the euro under false pretences.

it had interest rates up at 25%, and inflation said several levels. so it did bring down inflation and lowered its budget deficit, and it did start to do some of the social reforms that would make its economy more productive. it did not do enough. it is now reaping the rewards of not having done enough and coming in under false pretences. what does it have to do? there are huge amounts of the greek economy essentially and publications. one example is the railway system. these massive -- in needs massive investment in order to become efficient, in need significant numbers of airports. someone who is a railway conductor is earning a salary that might exceed that of a doctor, for instance. but to bring -- to change the

system, you have to lay off all of these people, invest hugely and upgrading the railways system, and lay off as people when you have riots on the streets? when they have elected you into office, it has proved to be an intractable problem. a second issue increase is that the tax collection -- let's be fair, doctors and lawyers, those electing the government are not paying taxes. they have not yet found a way to break through how to restructure of public sector that is bloated, that many people depend upon for their livelihood, and how to collect more taxes. it will take more time. might mean that the current government fails. it has taken a number of steps already coming you do not shrink your economy by 12% every year without taking painful medicine, but there is more to be done.

and this is a problem that may -- that they have been grappling with since the early 1990's. i hate to say, they got into the eurozone under false pretences. host: this is a profile of a family that does not want to pay some of the property tax as part of the package. they are planning not to pay them, one family in particular. robert asks us on twitter. is there regret over not just the details, but using the bureau -- " would be so bad about letting a country like greece to leave? guest: the million-dollar question. greece default -- it may well the fall. there is a 98% chance in the

markets that it will. one banker said, just get on with it. i am sick and tired of all of these problems. greece could default and have its debt restructured and brought down to a level that is more manageable. how much might that mean? they might have to write off 50% of the value of their debt. before that happens, why they are working so hard right now at the international air -- international monetary fund meetings with their leaders, can the banks survive? the expectation is because they have so much of the greek government debt in it, the greek banks would collapse. you cannot run an economy without a banking system, simple as that. will it cost to recapitalize the bags? maybe about 50 billion euros. that is manageable within the eurozone, you could do that. what about the bank's outside agrees that have significant investment in greek that?

-- in greek debt? they have started to write off and set aside more capital to protect themselves. but the bankers are trying to figure out and the officials, is whether greek restructured debt, is the banking system going to be able to cope with that shot? that is an important question that they are trying to figure out. it will take a couple of more weeks or months before they are certain that they have put enough capital into the banks to make sure that they can cope with that quite likely scenario. the second question is -- host: was that not this right strategy? guest: the eurozone itself, and you can increase out?

in the formulation of the hero, they went to monetary union without physical union, where you can transfer money easily, and you cannot cope with the varying cycles. countries that have their own currency could devalue their currencies and grow their way out of a recession. greece cannot because it is locked into a stable and strong currency. what if we take greece out? why not say that this is a disaster and we should never have done it in the first place? there is no political or legal mechanism to do that, first of all. the concern is that once you do that, talking about the market contagion to the other eurozone

countries, there would be an assault on the debt of ireland, portugal, italy, spain, and maybe these countries will be thrown out, too. and then you get back into the vicious cycle again, the value of their debt punches, banks have to be capitalized more, the banking system starts to freeze up, it spills into the u.s., it spills over into asia. what will the cost be? you could look at as i said earlier, a recession increase of up to 50%. if you are to form a new currency with germany at the court, or keep a euro corps currency of germany, france, probably austria and the netherlands and finland. if that became the new currency,

it would be a strong one. money would rush into it. germany would find that its export sector collapses because it cannot export with such a high-value currency. they're coming you could be facing a deep recession. estimates of the cost of that potentially could be $3 trillion, one estimate from ubs. it far exceeds what it would cost. so it seems to be damned if you do, damned if you do not. and the cost of failure have become much greater than fixing the problem with in the system. ultimately you have to come to closer fiscal union. host: stella dawson, thank you for being here this morning.

coming up next, we'll talk about ways to protect your pension with rick rodgers there you can get updates about all three c- span networks by following @cspannow. do not forget that follow us at @cspanwj. >> we will hear more news at noon eastern when c-span radio careerist five tv talk shows. topics on the programs include a possible government shutdown, presidential politics, and the middle east peace. we begin at noon with meet the press, with david gregory welcoming michael bloomberg talking about education policy. also, israeli prime minister benjamin netanyahu. at 1:00 p.m. eastern, here abc's this week, talking with david

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>> rick rodgers is our guest. he is looking at how to protect your money, a retirement counselor, and lancaster, pa., and good morning. how important is it for americans to have a pension plan these days? guest: not very common. private pensions, there are only 16% of americans who work for a company that have a private pension. of those, 30% of the fortune 1000 companies, their pensions are frozen and mackenzie is saying that in the next couple of years, it will be 75% that have frozen pensions. they are on their way out. host: what you mean by a frozen

pension? guest: meaning that they stop pensions. it is essentially replacing your in come at some point when you retire. each year, they have to actually figure out how much money needs to be in there and they make a deposit. if the freeze a pension, whatever benefits you earned are now frozen, so you will not accrue any more. therefore they are not required to meet the funding requirement. host: is the basics of a pension plan. -- give us the basics of a pension plan. who might have them, a private company versus of public-sector job. guest: public sectors are very common, probably 90% who work for federal, state, or local governments have some kind of a pension plan. the private sectors were many -- were very common many years ago. the concept of the new three legged school, and your pension,

social security, and private savings. now what pensions on the way out, companies are trying to get rid of them as quickly as possible. they are very expensive. i think that a lot of that is because people are living longer. if you go back 40 years when pensions were fairly common, people commonly lived maybe 10 years in retirement. your target 65, life expectancy only 70, so pensions did not lead to last that long. with life expectancy closed at age 80, a retiring couple expected to live 25 years in retirement, adding enough money in the pensions is very expensive. that is why private companies are trying to get rid of them in my state and local governments have such a funding problem. host: it is a type of plan that is usually tax-exempt.

reviewing of what he just told us, rick rodgers, and you mentioned that there is a shift right now happening away from this, employers trying to be less on the help fund pensions cared what if you work for a company that had a plan knowing that that was set up, how can companies change the rules on u.s. time goes on? guest: they cannot actually change the rules, but in freezing the pigeons, what ever you ever earned cannot be produced. a common formula is based on years of service. let's say you earn 1% for every year of service. if you worked 30 years, 30% of

your average salary. at a certain point, the company decides to freeze the plan. so what of your benefits that have been turned up to that point bank are yours, you probably can i get to them and to your age 65. so they change it from the standpoint of is not going to be the last 10 years salary when you would make the most amount of money, but it least you know what you have at this point. so they switch over to whether it is considered to be a defined contribution, but the 401(k). you have to make of the difference with zero personal savings through a 401(k) or some kind of employer match. host: if you like to talk about rick rodgers pensions rick, here are the telephone numbers. tell us about your pension plan, what you have one or not, if

that has been frozen, and how that has turned out for you. let's talk about the pension protection act signed in august 2006 under the presidency of george duffy bush. take us through the basics. guest: it was concerned about underfunded pensions. an actuary will go through a company since the seven boys and let it what benefits are expected to pay out, and compute how much money needs to be in the pension right now in the poll in order to meet these future benefits. companies are required to make up the difference. that is what the funding requirement is each year. you can imagine that in good years, they may not have to put any money in. maybe overfunded. in a bad year with the stock market, it might be underfunded. if they're making bad sales, they cannot make a contribution. many were falling behind from

the weak stock market and the weak economy. so the government passed the pension protection act, which if the pension is underfunded by 80%, adding only 80% of less than what is required, then they cannot make lump-sum distributions. employees could take money out of the pension which would not leave enough for those who are younger. if it is under 60%, they cannot make any lump-sum distributions at all. if your company has 80% funding or better, and you are retiring and they offer a loan some, if you could take all of your money out of the pension as a lump sum. less than 80%, you might only be able to take half. host: boston on the independent line. guest: i wanted asked his

thoughts on how the underfunding of the public union pension system will play out in the future. the numbers are quite staggering as not being able to fund it. there is massive and equality between the two systems. people who are beneficiaries of the public pension system are going to fight for it because they want to retire, who would not? but their employers, the taxpayers, they should not have the funded. they deny that that benefit. there needs to be some kind of understanding, but in massachusetts, i do not see that understanding happening. all the politicians are completely in bed with these people. guest: i do not see that pensions are actually going to go away. it will become more scarce.

but what needs to happen is that retirement ages need to be raised because people are living longer. the formulas will have to be modified and there are lots of ways that these can be fixed and addressed the underfunding problem is going forward. but it is not an easy decision to make three the same thing applies to social security. the original retirement age was 65, now is 67, but when it was passed in 1935, life expectancy was only 62. they were not expecting many people to even draw social security. now life expectancy is at age 80, and it is very expensive. social security is very underfunded, and other pension plans are underfunded by of 2 $3 trillion according to the chamber of commerce. people need to retire later, and it would not be fair for someone 60, to start with

younger workers or new workers, and it will be a different formula. your formula will be based on a lower benefit and it will be later. that is not popular for younger people but you have a longer time to plan for it. and you have a longer life expectancy. and that is what needs to be done. host: from twitter. guest: in the case of private pensions, the pension guaranty benefit corporation kicks in. that was part of the security act back in 1974. it is a government-run insurance program much like the fdic, but for pensions. if this agency takes over, then they pick up the liability of

paying the pension benefits. there is an insurance amount like with your savings amount, there is a limit to what the pbgc will cover. as long as your pension is expected to be $4,500 a month or less, the pbgc picks it up and tell. if it is more, you stand to lose some of your benefits. for those pensions taken over by the pbgc of only a portion of the retirees have been affected. host: a caller in las vegas, tom is a democrat. caller: thank you for a great, informative program. this is something we should show all of our new employees. the question that you may have just touched on with your prior answer, what if you have a city manager who is retired and

making over $100,000 in retirement and retired in his early 50's? is the pension guarantee, but that protect him from the city reducing his pension? guest: how can you change pensions of people who are really overpaid? right. actually, they do not cover any public pensions. your state and local government and federal art continued to be covered by the wrong tax base. that is a great question and i do not have an answer to that. i do not know if they can vote in order to reduce it. i would think that that would be extremely remote that that what happened. and i do not have the courts would look at that. i do not have an answer on whether they could do that. i would think it would be extremely unlikely. host: from "usa today," at age

55, one representative started collecting his pension without leaving his office. thomas u. stay one-sentence law that he and his colleagues pas sed -- guest: that goes back to that last caller's question. can we change it? i do not know that it can be changed, but we certainly need to change the law to close those

loopholes. we cannot afford the pension system as it is right now. host: jim asks this on twitter. guest: i do not know specifically of cases that i can quote, but some of them have been prosecuted. there is a fiduciary requirement. the department of labour who enforces the law takes this very seriously. as long as you are doing what you're supposed to do, and not miss managing your funds, if you are ok, but if you're supposed to be working on behalf of the retirees, the future retirees, and in the cases where they are not, they can be held personally liable for shortcomings. host: evans, ga., sammy, a republican. caller: the guy in the white house, do they droppage and when

they require? -- do they draw a pension when they retire? for existence, i am retired. i'm 65 years old. my question is, if something happened to me that my pension could be shut off and i cannot have anything? guest: is it a public pension or a private pension? caller: public pension. guest: theoretically it is possible, but it would be highly unlikely that they would affect existing retirees. the first part of your question, when you talk about the white house, the president does have a pension after he served one term. i do not remember exactly what is. most of the public servants have a pretty generous pension. best and's look at the worst funded state pensions.

what do youtube if you live in one of these states that has the record for one of the worst funded public pensions? guest: make sure that you know what your pension benefits are and keep track of them. keep the pension by all, because whatever happens with these pensions, what ever you ever learn, make sure you have a claim against. you should be getting a summary plan statement telling you what your pension benefits are.

you should be keeping copies of which tells you what your final salaries are. a lot of states have been taking steps to shore up their pensions. most recently, nev., which had one of the worst funded pensions, has raised retirement age from 60 to 62. they also raise the amount of contributions in order to shore it up. host: rick rodgers is our guest, the author of "the new three- legged stool." in your book, you talk a lot about the personal responsibility and educating yourself. how to keep track of your own pensions, and how often do you encounter americans to lose out on the system because it did not have the time or the wherewithal to collect facts and

find out what they were entitled to? guest: in our personal experience, we have found mistakes in about 10%. i did not know if that is a good national average, but just in our practice. when we have someone who is becoming a client, if they have retired or not, we make sure that the pension is calculated correctly and that they are getting all the benefits that they were promised. where we find these mistakes mainly is in a situation where the company, you start out working, and it is acquired by another company, so it changes the benefits, or you're entitled under the old company with frozen benefits, and then you have the new company and new benefits. it is a complicated situation and it is a good time to make sure that as your company is changing, you get all of your pension information into a file which you can keep track of it.

so the time your age 65 for whatever your retirement age, you get all the pensions from prior companies as well as current companies that you are entitled to. host: the independent line, good morning. caller: 90% of the public sector police have pensions, and only 60% of profit. like that the government followed the private sector and either eliminate pigeon benefits or raise the contribution levels? guest: that is a good political question. i am not sure that i am qualified to answer it. my guess would be that it is much more difficult. if you're the chairman of ibm and you are looking at what the pension is costing you, it is really easy to get it to to your board -- get it through to your

board that the pension contributions must be raised. if you are the mayor of new york city tried to get something through that affects all the public workers, and they do not want any changes made, it is much more difficult. but that is the way that it needs to go. we just cannot afford the pensions as generous as they are. i think it can be done fairly, but that the new hires and younger workers and changing the benefit formulas, making your full retirement age -- like nobody's going from 60 to 62, or social security going from 65 to 67, but for newly hired or younger. host: let's hear from douglas honored democratic line -- on our democratic line.

caller: i have two issues, but now i have three. the fact that people are living longer -- i have read the report, and that is true -- but not true for people who are simply working in the steel mills are working and driving trucks. the last caller brought up public people. my wife is a teacher. i think people get the idea that teachers just teach a class and they go home. no, they have class preparation spirit she spends all weekends grating that tests from the previous week review reduce pensions and funding for teachers, who is going to go into those jobs, and they will not be qualified because they simply will not have the education behind them. the third one is this -- the way that the pensions are set up right now, if you have so many people unemployed, they have been tapping into them.

i am sure that they're getting the penalty. when someone is employed and they have to tap into their 401(k), why is there still a penalty on this? it seems to me that the penalty should be lifted. in the future, these people without primary employment because this is so difficult to find employment for people over 50, they will of spent all of their money, and they will have nothing to rely on. i think we're looking at older people going in to the days prior to social security, prior to bismarck, or the older literally left out in the street. host: a lot of questions lined up for you, rick rodgers. guest: i don't know what happened to eliminating the penalties from withdrawing for 401(k)'s. that was talked about in the

1990's, and i know was also talked about for the victims of hurricane katrina. that those people would be allowed to take money up to a certain amount out of their 401(k) or their ira without penalty and it never got anywhere. that is probably a political answer. addressing the first two issues, i was like to stress that we do not have to reduce pensions. we do not have to take out benefits and make them lower. we just need to stretch out when they can actually start to draw those. that is looking at it as being a reduction, but if retirement age is raised or the benefit formula is recalculated, so that it is taking 15 years average instead of 10 years, we are not looking at reducing the pension, just making it the shorter period than what was originally

planned. host: let's go to the independent line. columbus, ohiom and i am retired union 536. when i became disabled back in august of 1983, i contacted the department of labor because my pension masters said that i was not entitled to anything. i pressed on and they gave me $25. i tried to litigate my claim, and according to the pensions administrator, they use my union constitution, they used some

plan description, but i asked to see those documents, they said that they no longer existed. i contacted the ebsa, and the last time i contacted them, they said that my pension plan was not under the erisa laws. and this is the first time since august 11, 1983 that i have ever heard that. if you could comment on that. guest: i would suggest if you have access to the internet, pensionrights.org is a group that will assist you with that. they are a nonprofit. host: a personal story coming to us from twitter.

is it likely to be paid? guest: yes, i think so. pbgc is currently under funded right now. it has been fairly steady, not increasing significantly. last year, they to cover 147 pension plans, and their final number was a $23 billion deficit. they have been addressing it by raising the amount of contributions that pension plans must make to it. i believe that u.s. treasury is pledged behind 1%. host: antioch, california, mark on the republican line. caller: for social security, i

was told from a whole lot that i was not going to get it. and clinton balance the budget with that. is he going to collect his pension? guest: i do not know. back to you on that one. host: it does raise the question on what penalties are on members of congress. is it easy to lose your pension? guest: i do not know if that is true. i remember dan rostenkowski, he actually serve jail time, but my understanding is that he was entitled to draw his pension when he got out of jail. i do not know what the details of that work. i remember thinking at that time, i think that's to be one of the reasons that you should not be -- you should not be able

to get your pension, if you end up going to jail. host: chairman issa was saying that congressman rangel should lose his pension. let's go to missouri, on our independent line. caller: i had a question for you. i am a retired -- and i have not taken any disbursement. the question that i have is, does that money belongs to me or does it belong to the government if i have not taken any of it? the reason i asked, the government will use that money to offset the deficit, the money

that they owe at the end of the year. can you give me some help on that? guest: your savings plan? that money i believe is all deferred. was all your contribution. so that is your money, just like for private-sector employee. that is their money. i believe you are correct that they do not separate the money, like a 401(k), a company cannot come in all that with their own funds, but i do not know -- there are five different investment selections, i think, and one is government bonds, common stocks, international stocks, and there is a small stocks fund, a beleaguered in the last one, i believe, is treasuries, which would be, if your money is there, they use that offset whatever their budget deficit is. caller: i am in the government

guaranteed securities. when the government runs out of money at the end of the fiscal year, it is very normal for them to post that money and put it into the the other pot, if you will. to help the government get over that short period. guest: the only entity allowed to use that accounting formula, and i do not agree with it, but there it is. host: and i am reading again from "the hill" story. the law went into effect in september 2007 in the wake of ethics scandals.

as the denver, colorado, david on the democrats' line. caller: i am allowed to take along some from a private sector defined benefit plan. how can i determine the percentage of funding and a more timely matter, since reporting tends to lag by 12 to 18 months? and on taxes, doing that lump- sum, will those taxes be impacted by the possible changes that seem to be coming due to the changes in the possible tax extension and the actions of the deficit committee? guest: answering your second question first, yes, if you took that money as a lump sum and did not roll it over into a test qualified plan like an ira, it would be subject to taxes and subject to 20% withholding,

which may not be the entire tax bill at the end. my suggestion would be to roll it over into an irate first, and then if you want to take the money out, pay taxes a whatever amount you want to take it out over some period of time. to calculate whether or not the amount is correct, i would suggest a free service from the american academy of actuaries. if you go to actuary.org/pal -- the pension assistance line, you would get four hours of service from an actuary who can go through and calculate what your pension lump sum should be and whether or not it is correct. host: a recent story on salon.com.

thomas rogers talks with ellen schultz, and says it was not the direct comment that led the company's to plunder their own employees' earnings, it was agreed. -- it was greed. one company said they cannot afford to pay out pensions and took part of it away. they save $400 million and at the same time, they awarded more than $400 million in bonuses to executives. rick rodgers, talk us through how companies justify when they do have to freeze engines or change them for future employees? guest: the look at future expenses and whether or not they cannot afford that and keep the profit margin up and afford to manufacture their products, and

they come up with an expensing. they determine that they cannot afford to do this anymore or they do not want the liability of it. the biggest problem with the pension, the defined benefit pension, is that you lose some of your flexibility or a significant portion of it. at the time that you probably do not want to be making a big pension contribution, if the economy is weak or the stock market has been weak, and the investment performance is down, you're stuck in an underfunding situation and you have to come up with a large amount of money. without 401(k) or the fine contribution, -- or the defined contribution plan, if you commit to make a matching contribution, profit sharing, putting them in with the employees money. each year you have a lot more control over how much the pension plan, or in this case the 401(k) plan, will cost to

each year. host: when someone is coming on the job market, a college graduate or someone getting back into the market, what should they look for in the pension plan? is there a possibility of having one? or is it going to be a defined contribution system? guest: in the private sector, the trend is toward defined contribution. 401(k)'s are much more popular. many more -- it will probably be even less for defined benefit plans. is there a 401(k) and will they match? the common match is something like 50% of the first six% that you put in. look for a match on a 401(k). host: rick rodgers, joining us

from pennsylvania. thank you so much. that is also "washington journal" to date. we will be back tomorrow with the reporter from "far and policy," talking about the views of political candidates. innovations in start-ups, and a look that the federal government's plan for job training programs. had a good day. -- have a good day. hos[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] ♪ ♪