>> john: that's the national debt. it keeps rising so the politicians are fighting about raising the debt limit. do you know what that is? do you understand the fight? lots of people don't. >> there you see the national debt clock over there? you know what the national debt is? >> 121 -- >> that's how much it is. but do you know what it is? >> no. >> the debt ceiling crisis? no. [ laughter ] >> what's the next step in the debt battle? >> it's odd that people don't know. the battle is all over television. >> this balanced approach. >> john: people know the president, but do they know his

opponent? >> if you are spending more money than you are taking in, you need to spend less of it. >> who is this guy. >> looks like some politician to me. >> john bonei,. >> do you know who this guy. >> gay actor on 30 rock. >> boehner. john boehner. >> john: right. but lots of people didn't know him. >> i don't know who that is. >> or anything about the debt problem. >> what's the debt limit? what are the politicians fighting about? >> i don't know what they are fighting about. >> okay. well, tonight we'll explain it. and, we'll solve it. cut the debt. it's not that hard. the debt and the stossel solution. that's our show. tonight. >> and now john stossel. >> the poor politicians. they just don't have enough of your money. so they need to borrow more.

put america deeper into debt. this year you taxpayers are so cheap you are only giving them $2,200,000,000,000. look at that. it's not enough they need more? yes, as assess the president. if they don't get more money, they won't be able to send out social security checks. pay the benefits our veterans deserve. really? 2 trillion isn't enough? i don't get it. with 2 trillion they could pay social security and medicare and the interest on the debt and still have hundreds of billions left over. 2 trillion is plenty. it's billions more that our entire government spent when president bush took office. what's the problem? the problem is that republicans and democrats under presidents bush and obama doubled spending. doubled it. this year the government plans to spend $3,800,000,000,000. look at that number. that's the reason we have a growing debt.

president obama says we need to raise taxes to cover that? i don't think so. it's the spending that's the problem. this chart shows how much different administrations have spent ajusted for inflation. spending rose during every administration and then exploded under presidents bush and obama. so, because of those increases, the president says, we need to increase revenue. no way, says grover nor quest, who heads americans for tax reform. some say the reason there isn't a debt deal on the table yet is because of you and your pledge. >> well, i think the reason there isn't a tax increase on the table is that 235 members of the house of representatives signed a pledge never to raise taxes, a pledge to their voters and 41 senators did. so we have got quite a number of members of the house and senate, many of them elected by tea party activists over the last election cycle. they came to washington and said we are not going to raise taxes,

end of conversation. we will cut spending. >> john: you went to them don't you want to sign this? what do you say. >> we share it with them. often political activists and tea party activists share the pledge with candidates, if you are going to run for office will you commit in writing, not in a speech, north an aside but in writing with two witnesses, not that we don't trust anybody but we have two witnesses and it's dated and then we make many copies and share them with everybody. we want to make sure that people take the pledge that voters know they intend to keep it. >> well, at the start of the show i played clips of people outside the studios saying debt ceiling? what's that? i don't know. but, in fairness, a majority of people at least have some idea. and some, like this young woman were pretty well informed. >> what are they fighting about? >> they are fighting about the debt limit and the republicans want to not have any taxes because grover norquist made them sign all this stuff and they can't look like idiots.

[ laughter ] >> john: so, randomly this young woman on the street you are the guy they are paying -- they want -- republicans want no taxes. >> no tax increases. >> john: that's what she meant. but i think the message is republicans want no taxes. >> well, we ought to go with lower taxes to start with. we can work on pushing the envelope. we will start with reduce not increasing the tax burden. look, step one, don't raise taxes. step two, bring taxes down. only if you take tax increases off the table do you even begin to have a conversation about spending restraint. there have been some good proposals. the ryan plan dropped spending by $6 trillion. >> john: essentially. >> nice step in the right direction. over 10 years. the most recent plan is a 2.5 trillion-dollar spending reduction from obama's higher levels. but, we wouldn't. >> john: none of these are real cuts, right? they are all cuts in the projected increase. >> things are getting bad and get bad, worser, sooner, morer.

what we need to do is reduce the damage that's being inflicted. but, unless you say no to tax increases, you don't even begin to focus on spending and that's what obama wants to keep our focus off of. he wants us to talk about the deficit, not spending. >> john: but he kind of, i think, won against you in some way, and that a lot of these things you call tax increases were kind of loopholes that went to private jet makers, the oil gleetion allowance. it doesn't sound like a tax. it sounds like a special break for rich business. >> two reasons we want to eliminate a lot of deductions and credits and reduce rates. one is you want to simplify the code. you want to take a lot of goodies that politician have laced into that code. particularly the green lobby. the so-called environmental lobby gives tax credits topicsy dust. >> john: wind mill and solar. >> they call them alternative energy because they don't create

energy. >> john: you are fine with getting rid of all these things as long as it's balanced. >> as long as reduce tax rates and it's not a hidden tax, yes. >> john: constant increase in spending makes thee think of a cocaine user who always needs more coke to get high. somebody like this guy. >> america can learn a lot from a drug addict. even though this country is 14 trillion in debt, washington raised the debt ceiling 10 times in the last 10 years. each time another hit, spending hit. you are the junky. to borrow less you need to spend less. >> this is a fox news alert, that senate majority leader harry reid talking on the floor of the senate about negotiations over raising the debt ceiling. let's take a listen. >> before any arrangement can be completed. but i believe we should give everyone as much room as possible to do their work. i have spoken to the white house quite a few times this evening. they have asked me to give everyone as much time as possible to reach an agreement, if one can be reached.

for that reason we will hold over the vote until tomorrow at noon to give them more time to talk. in fact, we will come in at noon and have the vote at 1:00. i'm glad to see this move toward cooperation and compromise. i hope it bears fruit. i'm confident that a long-term approach rather that the the short-term band dated in the house of representatives will move forward. there can be no short-term agreement and i'm optimistic that there will be no short-term arrangement whatsoever. i'm also confident that reasonable people from both parties should be able to reach an agreement. i believe we should give them time to do so. mr. president, i ask unanimous consent that the cloture vote on the reid motion concur with 627 amendment 589 occur tomorrow, sunday, july 31st, at 1:00 p.m. further, that the rule 22 be waived. >> is there objection? hearing none, it is so ordered.

>> noted. the clerk will call the role. -- roll. >> so, what we were just listening to is senate majority leader harry reid announcing rather than have a vote tonight on his bill to raise the debt limit, he says that he is optimistic that there is progress being made. so he is going to delay the vote and instead of having it tonight or actually the early morning hours of sunday, it was scheduled for 1:00 a.m. eastern time, he is now saying that that vote will not take place. that, instead, will take place tomorrow afternoon at 1:00 eastern time. that the senate will reconvene at 12 noon. again, he says the progress is being made enough so that they are not going to hold that vote at 1:00 a.m. and, instead, they are continue working and hold the vote tomorrow afternoon. there are two different versions of bills that are working their

way through washington. one that was passed earlier today in the house of representatives, the so-called boehner bill. that raises the debt ceiling, but only for about six months or so. and then washington would need to look at the matter once more. the senate version attempts to stretch this out a little bit more and to create a situation where the -- enough money would be raised so that they don't need to have another vote until after the 2012 presidential elections. you have heard the majority leader saying that there will not be a short-term agreement. there can be no short-term agreement. and so there is negotiations taking place right now, again. we'll continue to follow all the latest for you right here on fox news channel. i'm rick folbaum in new york. as we take a last look at the floor of the u.s. senate where they are doing the "roll call" right there. we will keep you posted but for now let's go back to stossel already in progress. >> john: calls you the high priest of the star of the beast church. first a democratic congressman

has an interesting proposal for reducing our debt. smoke' em if you have got them. he will explain that next. [ barks ] ♪ [ cat meows ] ♪ [ whistles ] ♪ [ cat meows ] ♪

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>> politicians can't agree on what to do about the debt problem. most republicans now finally want to cut spending, democrats are more eager to raise revenues which usually means taxes.

as i said i'm with the spending cutters on this. and later on the show i will cut the budget all the bay to surplus. for now let's consider the democrats' point of view raising revenues. one congressman has a proposal to do that without raising taxes. i kind of like his idea. he wants to legalize stuff. like marijuana and online gambling. by legalizing those things, you free them from the black market and that then brings in taxes that congressman is jared, let's go through your plan. you also want to grab amnesty for illegal immigrants so they will pay taxes fergs of all, john, i have got to see the second part of your show. it sounds like have you solved it. >> we will. >> with regard to immigration there is a large illegal workforce in this country. we don't know how large. 10 to 15 million. pay some taxes not all.

sales tax. get right with the law. create a process whereby they get a provisionary work permit. responsible for back taxes and taxes going forward. with regard to marijuana, by the way, we are not saying it's going to be legal everywhere. 15 states it's legal. colorado is one of them. legal in the state. tax it like any other business. instead of 100% tax which is what it it is now the federal government will con if confiscaf they find it enlarge the tax base. >> back to immigration illegals say okay i will pay taxes and then i'm legal. >> yeah, there would be a fine associated with it too, john. up for negotiation. i think in our projection of how much money we saved we estimated it would be 2,000 or $3,000 fine in addition to the back taxes. >> you also propose we give some kind of amnesty or forgiveness to tax cheaters. >> yeah. this is something you can do once a generation. john, what basically people who have been evading taxes, not paying taxes, haven't filed. we are saying come forward, you are responsible for your taxes

but there will be no criminal penalties against you. you are not going to be put in jail anything like that. you can't do this every five years or 10 years. there is an exmtion you are going to do it. increase evasion. do it once every 15 years. absolutely. the state of colorado did it recently. state of california. this should be a huge revenue raiser for the federal government. enlarge the tax base going forward. >> john: bring in a trillion dollars over a decade. let's bring in into legalizing online gambling. this one below blows me away that republicans and people in the kay men islands making a lot of money. >> of all of them, john, this is the biggest no brainer. gambling is a click away for anybody with a computer and who knows how to go to a web site with a search engine. people do it, americans do it every day. we force the businesses to domicile offshore. we force them to pay taxes to foreign governments. the jobs would come here and the

taxes would come here if we just treated it like any other ordinary american business. >> john: it always pustles me that puzzles me that the states, the politicians have said we don't want to encourage this. gambling hurts people but they run lotteries which offer terrible odds. >> that is definitely an example of sort of cognitive dissidents. they are the biggest perpetuators of gambling. the states don't want competition to gambling monopolies. on "the wall street journal" you said these should be on the table along with spending cuts if we are to break free of the rhetorical shackles that prevent cutting the deficit. so, he did say along with spending cuts so what would you cut? >> you are going to tell me in the second part of your program. >> john: that's what i would cut. what would you cut. >> the reid proposal, the boehner proposal, everything obama talked about, we are

talking about trillions of dollars of cuts. we are talking about it -- not no defining which agency would be cut. i have a number of pieces that will contribute to that. i have a bill that would reduce the minting of unnecessary -- some of these presidential dollar coins we don't make. many in our party agree we should cut our military expenditures. there is a lot of areas for cuts. probably agree and disagree with some of your recommendations, that's a given that we have a spending problem and we need to cut our government spending. >> john: i'm glad that you have specific cuts in mind and we look forward to hearing those at another time. thank you congressman jared poulis. next guest says cutting spending isn't just a smart thing to do. it's the moral thing to do. that's next. [ male announcer ] to the 5:00 a.m. scholar. the two trains and a bus rider. the "i'll sleep when it's done" academic.

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>> look at that number. that's what congress says it needs to spend this year. give me a break. $3,800,000,000,000 twice what they spent just 10 years ago? president obama talked about taking a scalpel to the budget. we need something like, this something bigger. all that overspending maybe that -- no, we need something even bigger than that. we need to make huge cuts and

later in the show i will cut the deficit down to surplus. but when i or others talk about making significant cuts, i hear scathing criticism like this. >> don't watch stossel. he is nothing but the hack. a corporate shill. he wants to throw granny over a cliff. this ad has been approved by the mainstream media. >> john: okay, my producer made that as a joke. the point is serious. everyone who proposes cuts is branded as cool. one who says cutting that down isn't just economically smart, it's the moral thing to do. arthur brooks says that what do you mean it's the moral thing to do? >> hi, john. well, you know, when the other side talks about doing the moral thing, they usually say that it's only fair for rich people to pay more. that it's only fair that we take from people who have more in

society and unfair to take to actually cut programs especially if they would effect anybody that has average incomes. >> that resonates with people that there is a lot of money and redistribution is the moral thing to do. >> sure. and in truth, that sounds really good. until you start thinking about what most americans think fair is. redistribution is not the definition of fairness to most americans. most americans think that fairness has to do with keeping what you earn. now, that doesn't mean you have to penalize poor people or take money away from those who don't have enough. more people just because we can. especially when we are robbing our people because we have a spending disorder in our government. it's really immoral to be stealing from future generations and taking away their opportunity. their pursuit of happiness if you will, simply because we can do that.

the government is treating the american citizens like atm machines. most americans would say that's not fair and fairness is really a moral thing. >> john: you said in your op. ed in the "wall street journal," when you withdraw money from citizens against their will, you make them less free. what do you mean? >> yeah, sure. i mean, well, no, the state needs to function. we need to have taxes to pay for a government. we all know that the question is how much do we need for how much government that we actually want as a society. the government goes way beyond to fix certain market failures. way beyond creating a minimum basic safety net for the economically vulnerable vulnerable. it has all kinds of middle class welfare. people that sounds like a good idea. why not? a few bucks here or few bucks there that's what hayek was talking about. economists say little

abridgements to the freedom of the people, pretty soon we have a different kind of society. we have a different sort of economy. we have something where we are less -- you work hard they take it away changes the culture when people become dependent. immoral to take it to people. but people also say what's moral about taking money government gives to poorer people and limiting that. religious advisor to obama says the debt debate is a clash between two competing moral visions between those who believe in the common good that's him, i guess and those who believe in individual good is the only way. the bible says we should be weary of the rich and defend the poor. >> yeah. and, you know, i agree that it is definitely a clash of moral visions. one side says it's moral for the government to be bigger and taking more away because it can and redistributing wealth between people other moral

vision says should be freely. founders of the united states and their concept what a moral society was. if you go back to 1776, the declaration of independence originally was going to say we have unalienable rights like life, liberty, and the possession of property. thomas jefferson and ben franklin reconsidered that language and put in the language pursuit of happiness. possession of property is too materialistic. not moral enough for the freest nation on earth. the left which talks about redistribution basically says if you want to stop cultural problems you want to solve problems with of poverty do you it with a welfare check and call it social justice. it has nothing to do with individual opportunity. i love the phrase social justice that they argue. if i resist, does that mean i'm for social injustice? it's very hard to fight that i

still don't quite get how i answer these people when think say you can't pursue happiness if you are poor sick. we need government to help those people. that's the moral thing to do. hayek once again we talked about a minute ago. economists through the ages including adam smith knew we needed a safety net. we need a basic safety net from the government crazy not paying attention to what we need. it goes beyond, however, help for the vulnerable. i want to help the vulnerable, too. but i don't want middle class wall fair. above the level of basic when people help each other voluntarily. doesn't happen when the government is redistributing too much income. we know that from the social democracies of western europe. we know that have the former soviet states.

the united states is the most charitable country on the face of the earth. a lot of it has to do with the fact that we believe that individuals need to make these choices. so we have to get away from this dichotomy this idea if you believe in limited government, if you believe the moral thing is rewarding merit, rewarding entrepreneurship that you think it's unfair for the state to force people to pay more than the state needs to function, which is the current case, that you somehow hate the poor. no, i want to help the poor with a minimum basic standard of living. beyond that i want to create an opportunity society where everybody can rise and, in fact, that's actually, of course, why your ancestors came here for that. not for forced income lee distribution. >> john: thank you arthur brooks. i would like to add the pure libertarian point if you remove the government safety net it's okay with me because i think a private safety net would come in and do it much better. but, next, what if we do keep piling on the debt? can't pay our bills? what happens? well, that has already happened on a smaller scale here in

america. we will show you where and what happened next. for dentists, the choice is clear. fact is, more dental professionals brush with aal-b toothbrush than any other brush. trt the brush more dentists and hyenists use, oral-b.

>> a press conference is not a plan. >> so i hope republicans will wake up. >> the president wants us to help pay for his spending binge. >> many republicans in the house refuse to consider this kind of balanced approach. >> i think the president should apologize. >> the debt ceiling is being held hostage. >> john: what if they don't work it out, congress runs out of money to spend. they promised to pay your social security and medicare and pay the military and help the poor. they will just stop? well, no, because the federal government is unique. it can just print more money. but when they do, each bill then decreases in value. eventually this becomes nearly worthless. equivalent to government going

bankrupt. being unable to pay your social security check. and what would that look like? well, it has already happened in pritchard, alabama. >> why are we not in the budget? >> this woman is angry because her husband worked for the city in alabama for 30 years. he held up his end of the bargain but the city didn't it didn't send him a pension check for more than a year. city council says we don't have the money. in 2003 an accountant warned the town you will run out of money by 2009. the politicians then did nothing. as they admit today. >> never changed. >> right on schedule in 2009, the town went broke. so politicians declared bankruptcy and just stopped sending pension checks to retired city employees. more than 100 of them. [chanting] >> we want our money. >> they didn't do anything they

was supposed to do. they will didn't pay us like they was supposed to. >> alfred arnold recently retired from the pritchard fire department after working 35 years for the city. he had hoped to relax and travel. when the pension checks stopped coming, he had to get another job. now at age 66, is he a security guard at the local mall. and alfred arnold joins us now along with steve, who studies governments and their budgets. he had to get a job as a security guard. >> oh, yes. >> you thought you were going to get your pension for working for years for the city and it wasn't there. >> it wasn't there. i have to go to work. 40 hours a week. like starting all over again. >> i know another person, ginn williams, 77 years old felt lucky to get a job at a school teacher. >> yes. now, it's not like the town has no money. they are paying the mayor almost $100,000. >> exactly. >> john: they have a housing authority with 40 government

workers. they knew this was going to happen. had you known this was going to happen, you would have saved money. you would have been prepared for this? made your own plans? >> left the city. >> john: steve, you study cities. this is going to happen to more places. >> happened to a few places and a lot of places are approaching this. whether they get bailed out by their states or not is an open question. but you have a vallejo california filing for bankruptcy. central falls rhode island pension problems. asking for 60% cut in pensions for retirees. we are seeing this absolutely. >> cities and states unlike the federal government can't print money. >> that's for sure. and they can't run deficits, technically. >> john: if a way it's a good discipline except it's people like you who suffer. >> here is the problem is that these pension funds and the way they are structured is just another form of borrowing. it's just like debt. so even though technically cities and states can't run deficits, they are running

deficits. they choose to run them in their pension funds. politicians make promises. they don't fund them it would be like me saying i'm going to fund my ira by borrowing money from my credit card. now i fund my ira. i owe this money in my credit card. that's not really funding my ira. so it's another form of debt. it's hidden debt. and that's what they are relyin. >> john: in pritchard his town. city council funding you are going to broke broke in exnumber of years. they do nothing? supposed to be the responsible party. >> what happens is that when you get to the point where someone says you are going to go broke in five years in a pension fund, the cost of getting out of it is so high people just ignore it state like new jersey, 10 years they bear live made a payment into the pension system. unfunded liabilities get bigger and bigger. illinois don't make payment into pension, they borrow the money. that joke i just made, that's what they do.

it keeps getting bigger and bigger the problem. >> john: they know it's going to blow up and they figure they will be out of office or they will stick their heads in the sand. >> pension fund is a long-term problem. the account something very, very complex. way too complex. like wall street accounting. so what happens is they basically ride it out. all of these people who made all these states like new jersey and new york and connecticut who made pension promises in the 1990s, big promises they can't pay for, most of those politicians are gone now. the current politicians are stuck with the problems. so, it's a dysfunctional system because you make promises now that have to be paid for 10, 20 years in advance. >> john: what's going to happen? some cases they are saying okay, new employees we are going to pay you less. in order to stiff the older employees, as happened to you. >> right. >> john: they have to go bankrupt. declare bankruptcy and get reorganized by some judge who says okay. doesn't seem fair that your city has a golf course they are

losing money on. they didn't get rid of that. >> they didn't sell that. >> john: they should sell that and now finally they are paying you a third of what they promised? >> exactly. >> john: are you happy with that? >> no, i'm not. not at all. >> part of the problem john basically is essentially what you have to do is do this in a way that fixes the system now for by reduces the costs now for those people who are currently working so that you can continue to pay your retirees. otherwise you still have the situation well we are going to save the system for the people working now at the expense of the retirees. >> john: is that happening? are they doing it? >> people are doing different things around the country. look, employees have to pay more. other states are saying let's raise taxes so we can put more money in our system. cities are taking different approaches. not just one approach. city of atlanta probably the most radical thing. they just instituted a kind of 401(k) defined contribution plan which basically ended long-term liability for the city. it's put the money in right now

for the employee. make sure everybody knows what's going in. make it transparent. cities are doing different things. >> john: good news. >> some responsible. not all of them are responsible. it's imlewis sorry fixes in some places. really case by case basis. you can't make a generalization. >> john: a microcosm what's going on in the federal level with all the noise over the debt ceiling, in every town something similar. and you look at new york city, my town, you say that new york city the pension cross 10 -- costs were 1.5 billion it's 8.5 billion this year. >> 10 years 6% to the city's budget to 16% of the city's budget. that's happening around the country. basically, if you think about that something else has to be cut in order just to account for that. and new york city is a good case, really dysfunctional situation because it's the state, the state legislature that dictates what the city must

pay but the city has to pay it. and that is and you find this in states around the country, that is a really bad system because basically it's mandates coming down that the people at the state level don't have to pay. >> john: it's awful for people like you, alfred, and, yet, you seem pretty good natured about it. aren't you ticked off? they cheated? >> certainly i'm ticked off about it. as a matter of fact, what the gentleman was just saying, basically true in the city of pritchard. what they are doing now is starting a new program after they get rid of our pension like a 401(k) was called a 459. employees are going to invest money into it but the city is not. >> john: well, at least it will pay off, if it's the employee's old money thank you alfred arnold and steve. coming up, my solution to our horrible deficit. are you redding for some cutting? i'm gonna cut. [chainsaw]

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we'll give you $50 towards your next trip. diabetes testing? it's all the same. nothing changes. then try this. freestyle lite® blood glucose test strip. sure, but it's not gonna-- [beep] wow. yep, that's the patented freestyle zipwik™ design. did it just-- [both] target the blood? yeah, drew it right in. the test starts fast. you need just a third the blood of one touch.® that is different. so freestyle lite test strips make testing... easy? easy. great. call or click-- we'll send you strips and a meter, free. free is good. freestyle lite test strips. call or click today. >> john: we're back for your questions for grover norquist the taxpayer protection pledge and steve, manhattan institute. specialist on governments and how they squander tax money. first, from my facebook page,

eric treasure asks what's so horrible about default? why shouldn't government creditors who choose to invest in the fleecing of their fellow man pay the consequences? give them a hair cut. >> give them a hair cut. one of the problems is it creates complications down the road because if you have most foreign governments and also pension funds and so forth investing in treasury certificates you are asking them to take a hair cut. next time around they might not be so willing. the government that is going to over time reduce its debt but is going to have to rely on debt for some time before it does that. if you stiff creditors, you do risk the fact that they won't come to the well anymore. >> john: more than risk. they won't come to the well at the same price. might not come at all. >> it will get more expensive. but the real risk is that some people will step out of the market almost completely. then you can't finance all this debt that unfortunately we have. >> stephanie clark asks i understand the debt cristles has been raised before. many, many times. why does it all seem to be

coming to a head this time? what's differential? >> in past times when she have raised it, they have had some restraint on spending or some reform that they wanted to attach to it. so it's not unreasonable to ask for reform attached to debt ceiling increase. the size of this debt ceiling increase is larger than we have seen before. the repeatedly, this is coming so soon because spending increase has been so dramatic over the next three years. that's what is shocking to the system. >> john: would youwould youuseds had to approve every treasury bond. now we are borrowing so much we can't do that. they started setting these limits. >> pundits and politicians say it will be a disaster if congress doesn't vote to raise the debt ceiling. here is the president. >> we would risk sparking a deep economic cristles. >> he seems so certain. people forget that a similar crisis happened in the 1995. remember that one? president clinton and the republican congressman couldn't agree on a budget so the

government shut down twice. the second time for three weeks. almost a million government workers were told don't come to work. so did the economy grind to a halt? no. did you even notice that the labor department or commerce department wasn't busy doing the mostly useless stuff they do? i doubt it. this chart shows what happened to the stock market. the stock market went up during the second drop but then recovered. and today despite all the screaming, we must raise the ceiling no one will loan us money. they sure are loaning us money now, this year treasury bought treasury bonds and the government only had to promise to pay them back in 10 years a promise. 3.3% interest. people trust that they will get paid back, i guess. 1981, they had to pay 15% interest. so, are the investors all stupid? i mean, it's possible but i doubt it. they are betting their own money

and i think they are smarter than the politicians did think know that $2 trillion in tax dollars coming in. they will probably get paid or maybe take a small hair cut. not raising the debt ceiling is no crisis. i worry more about what will happen if congress just keeps spending the way it has. grover, you have said it is important for them to raise this ceiling my concern is you hand over to president what bills to pay and what bills not to pay. i'm not sure i like that power in the executive branch. i would like to see us not raise taxes and cut as much spending as possible while increasing the debt ceiling somewhat. i would keep the president on a short leash, do it for five or six months. come back and demand more spending cuts. >> john: what do you mean if we don't raise the cereal? i don't see how that gives these powers to the president. >> because then the president gets to decide what bills to pay and what bills not to pay. he doesn't have as much money to pay them all. something tells me acorn will still get paid. all of the things that you and i

would look like the irrelevant parts of the government would get paid first. >> john: he would only have two thirds of the money. >> he would blame everybody but himself. >> john: another question from facebook. scott asks: why is no one producing a plan that has immediate cuts. we need to cut spending next year not over 10 years. >> well, one of the reasons is because there is a constituency for every one of these programs. and essentially as you spend you buy into constituencies. constituencies will scream. no one wants to take that political heat. that's why it's hard to cut government. some are so awful. today's paper the essential air service to these little airports where wealthier people like me vacation and get cheap flights to keep the airport open.

the government pays more for the ticket than do you and they can't get rid of it in even in this time of so-called crisis. >> they are not trying to cut spending because the president is still trying to talk us into tax increases to continue the spending. once we have convinced them we are not raising taxes, then we focus on spending only then do we focus on spending. we have to have bifocal vision. focus on the stupid stuff now but the big savings coming from making small changes now that over the next 30 years makes significant savings in the entitlement programs. >> john: and you always have been an optimist about this stuff. while i'm a pessimist. >> i'm a long-term optimist. >> john: steve, i will give you the last word. >> well, i guess i would say i'm a long-term optimist because i believe that one of the ways out of this is by restraining spending to get the economy going again. because eventually we will grow our way out of this, not spend our way out of this. >> john: i hope you are right. >> we hope. >> john: we certainly need grote

to do it. thank you steve and grover. >> thank you. >> john: coming up, i will show you that i can cut the budget so there is no debt crisis. it can be done. [chainsaw] >> john: we are going to cut it. . the newest release with verizon 4g lte. the first phone pre-loaded with access to netflix's massive movie library. powered by verizon 4g lte for an unparalleled streaming experience. see how mobile entertainment was meant to be seen. only with verizon 4g lte. now get the revolution by lg for $199.99 and receive 3 months of netflix free.

>> john: we taxpayers must be suckers, we gave the politicians more than $2 trillion. and then they say that's not enough? they have to spend 3.8 trillion? give me a break. the end of the clinton administration, america spent half that. bush and obama doubled our spending. they should apologize instead of asking for more debt. that 3.8 trillion will get worse as my baby boom generation retires because the politicians have promised to pay our health care and social security and we keep living longer. it is just unsustainable. the only hope for the country is for us not to borrow more but to cut spending. and grow our way out of debt. we can do that because. the government does all sorts of things it doesn't need to do. can i balance the budget. i will.

i will do it right now. you just need the right tools. we should get rid of all earmarks. privatize air traffic control. canada did that and private workers better. we should sell amtrak, government can runs trains efficiently. end subsidies for public broadcasting for foreign aid, federal flood insurance. open anwr to drilling. so far, i have saved about $40 billion. oops, barely dents the deficit. we have to cut much more. i will do that. let's eliminate whole departments starting with the education department. they haven't improved education. children gain nothing when your money is shipped from your state to washington. laundered by bureaucrats and shipped back with strings attached. kill the agriculture subsidies which mostly go to rich farmers. keep welfare and food stamps but dump most of the department of agriculture. kill the commerce department.

the labor department, most of the energy department. privatize nasa. end the war on drugs. do that and cut all these other things and we have cut $1,700,000,000,000. but that's still not enough to balance the budget we have to cut the so-called untouchable parts like social security, kato's plan to raise the retirement age to actual inflation would save $73 billion. it's a start. let's go further. heritage would means test the program and i agree we richer people who are not going to expect to live until we are 80, we shouldn't get more money out of social security than we put in. and we should do the same for medicare. we should take the chainsaw to government handouts. did you know that the department of health and human services runs 400 separate subsidies programs? it's crazy. now defense, we currently spend more than $700 billion.

we must support our troops but we could do that and save money if the administration shrink the military's mission to its most important role. protecting us and our borders. today, we station 50,000 soldiers in germany. 9,000 in britain. troops all over the world. let those countries pay for their own defense. we should cut 470 some billion from defense. we would still spend more than twice what china spent or the next largest military. so, we're now $235 billion in surplus. hooray. and i left out some of the details tonight. full cuts are available for you to check out at john stossel.com. now, some of these cuts might seem painful, but what really is pain in this case? in the mid 1990s canada made similar cuts and prospered. they now have less unemployment and a stronger dollar than we do. pain brings gain for people.

and, actually, america does not even need to cut to the point of surplus if we just reduced the deficit. slow the growth of government to maybe 1% a year. we can grow our way out of this mess we have to cut now or we will end up like greece. let's cut now instead of increasing debt ceilings so we can borrow more. that's my solution to the budget. thank you for watching. have a good night. [ barks ] ♪ [ cat meows ] ♪ [ whistles ] ♪ [ cat meows ]

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