thanks a lot and thank you for watching. see you tomorrow. ♪ >> none of us should be negotiating on the debt ceiling. she just the listed. john: that is what the big spender say, and they get their way, but what if this were the budget of someone you knew. john: what do you think of these people, making 24,000, spending 35,000, almost 11,000 in debt. >> get there priorities straight on what they need to be spending and saving money on. john: this is the federal budget. i just took zeros of. suppose america were a person. >> i would like to raise my debt

limit. my debt limit, i would like to raise it. >> you are 140,000 to order and $70 in debt. >> right. i figure we should raise the limit to 170,000. i just bought a 60-inch flat screen. john: americans have bought plenty of -- plenty of flat screens. promising everyone many more things. is there no limit on what politicians in promised? who will pay for? case well. i have to take some of these. no, i am the old person. i need this. no, i've won't give it back. stealing from kids is not fair. so tonight the week after government barricaded veterans away from a memorial, i say what americans need is a barricade to keep congress away from our money because we are up almost 17 trillion. that is our show tonight. ♪

>> and now john stossel. ♪ john: okay. congress kick the can down the road again, but this does not address the irresponsible spending that is going to bankrupt us. tonight we will solve america's debt problems. really. it is not that hard once you stop assuming that what makes america work is government. our politicians did not always believe that government was so important. they used to spend billions less . this week and was trying to think about how i could illustrate this. so we build a big, goofy charge in ticket outside. this is federal spending per person since america began. started low, less than 5 percent of the economy. world war one, or to. it used to go down. now even in peacetime it only goes up. pretty san we are up here.

so what is going to happen? >> grandchildren and maybe my children. they will be burdened. >> it is unbelievable the amount of debt that we rack up. >> 20,000 per person. >> it is astronomical. john: this is where we are going >> well, you should stop. john: that there are some who just have faith that banks employ bill of -- brilliant politicians. the woman using the scooter believes that. john: that we pay for my generation who has been promised health care but now we are living 20 years longer? >> i think that there are definitely plans for that. the avoidable care act is in place. i think it covers a lot of people. john: that is going to take care of it. >> i think it will. john: the affordable care actual just solve the biggest problems. if only it were true.

the truth is that government solutions of the problem. government does too much and promises to much. dan mitchell spends his working days looking at the budget and allen has grown. they work for competing think tanks. dan is with the cato institute, and the is with the american enterprise institute. you say that the $17 trillion debt is just not the problem, aid is just a symptom. >> it is a symptom of the problem of government being to begin doing too much. as to an analogy. i say that you went to the doctor because you work off and then found out that you had lung cancer. that is really bad. what if the doctor said coming here is some robo testing. you want coffee more off. will you be happy? no, of course not. you want to deal with the underlying problem. might get rid of your calls, but it will get rid of the lung cancer. government hasn't exploded in size. and because of entitlements that are poorly designed the burden of government spending will

reach european levels in the future. something has to be done because no amount of tax increases is going to solve a problem. as a matter of fact that would probably make the problem worse. john: what is wrong with european levels. people say europe is doing okay. greece, italy, spain, portugal, and it is just a matter of time before france as their fiscal crisis. all of the western world, japan will blow up. same problems, politicians promising things that they cannot deliver an imposing tax burdens that are crippling private-sector. john: and get all week i heard, and we will hear from bob later, the problem is the debt ceiling. they should not have one. it is the uncertainty. john: the debt limit has been turned into the enemy as opposed to the actual federal debt. twenty-five years, everything in macon buy and consume in this economy will lobby the same size as the federal debt. we know from economic research seven accompany -- country has

that my stead you have slow growth, less jobs. people cannot retire and it is a real problem. john: today the president says stop treating government like an enemy. >> people stop treating government like the enemy when the government stop stealing from us. john: i will stop regarding it as in any when it stops spending three plus trillion dollars. it is hilarious to go back in time and look at a responsible senator obama was when he ran for president. he was upset about how the previous president increased their debt. >> the way bush has done it over the last eight years is to take out a credit card from the bank of china. we now have over $9 trillion of debt that we are going to have to pay back. that is irresponsible. that is unpatriotic. john: just five years later mr. obama is president and suddenly the debt is not the problem, the debt ceiling is the problem.

>> congress must authorize the treasury to pay america's bills. this is done with a simple and routine vote to raise what is called the debt ceiling. this is important. raising the debt ceiling is not the same as a proving more spending. john: it is not? i already gave one unfriendly analogy. let's do another one. that's a i am a drug addict, strung out on heroin. i will feel better in the short run if i inject more heroin. in the long run i will be better off whether i'm going cold turkey or methadone clinic or figuring out some way to get from my addiction to being short. likewise, we have to figure out how we go from this addiction to government spending, whether financed by borrowing more taxes, that is a problem we have to deal with. too many people in our country you are being trapped by the heroine of government dependency all these special interest groups, washington is one of the

most corrupt house we could imagine. john: about people -- i don't see people objecting to it. >> people objecting to the fact that the government was shut down and we were about to default on our debt, but it was shocking we did not hear more people talking about the 17 trillion. the debt limit is one of the few times during the congressional calendar that politicians have to come together and fess up and say this costs a lot of money. john: but we are damned if nobody cares. >> people care. we saw the tea party care and throw a wrench. john: the electric. >> a sliver of the electorate, but they have managed to capture the public debate. now, their efforts were far from successful. a lot of people are disappointed about the deal we reached, but at least for talking about the debt. john: in spending. over three and half trillion is the problem. i find it fascinating and many politicians will say government

does not have a spending problem. here is senator harkin from iowa. >> if we are so rich, why are we so broke? is a spending problem? no. >> it is almost a false argument to say we have a spending problem. we have a budget deficit problem that we have to address. john: we don't have a spending problem. >> last year president obama spent 45 percent more than a tax revenues we got in. that is not some minor budgetary issue. it is an entire mismanagement and resources. we have a spending problem. it would be great if we could figure out a way to cap spending the debt limit deal. john: good luck with that. i get angry listen to some of these congressman speak. it sounds as if they think the world revolves around them and government. listen to senator durbin talking to the press before this week's agreement. so arrogant. >> people have seen this movie several times.

the american damsel is tied to the tax. the engine is bearing down. the question is whether or not congress at the last minute will come to the rescue and say this country. john: government is going to say the country. >> i like his analogy, but what he did not tell us is that he is driving the train. all the cars attached to the train our medicaid, medicare, food stamps, the military budget , the department of transportation. that is what our problem is right now. we have gone so far afield from what our founding fathers wanted in terms of a limited, central government bound by the chains of the constitution. if you are one of the pressures upon capitol hill which is what durbin and harkin and the rest are, they think it is great because they get to buy votes with our money. >> i will build on the analogy. where is president obama with this train bearing toward the dams along the tracks.

instead of rising above the partisan bickering, the congressional gridlock and acting like the leader of the free world, he is urging the train to go faster. john: he likes to spend. >> it's nice when you don't have to be accountable to pay for it. john: i heard the not raising the debt ceiling will be a disaster from america. everyone knows that. >> philosophically opposed you might be the borrowing money. however distasteful it is you ideologically. everyone realizes that as long as we are borrowing money, not raising the debt ceiling, defaulting on our debt would be a very irresponsible thing to do it would be a disaster for the country. everyone realizes that. >> everyone realizes that. that is not what would happen if we did not increase the debt ceiling. the federal government this fiscal year is projected to collect 12 times as much revenue as is needed to pay interest on the debt. john: 300 billion.

they collect 300. >> it will be two under and $35 billion. tax revenues will be $3 trillion. i don't have great faith in the confidence of the federal government, but even i think that with $3 trillion a could somehow figure out how to prioritize spending said that they paid a $2,305,000,000,000 of interest on the debt so we did not default. would it be messy, hassle? yes, of course. this whole notion that we would default without an increase in the debt ceiling was either dishonest or ignorant. john: i want to point out that people in the street did not know. yes, we should cut. people had no idea what to cut. what would you cut? >> so when i get? >> so when i cut. >> that's a tough question. john: what would you cut? >> i don't know, to tell you the

truth. john: they just don't know. >> we need reforms to entitlements for this country to be sustainable, and i would recommend having some sort of cap on federal spending so that we can have a real conversation about what size the federal government should be. >> all we need to do is limit government so that it grows at the rate of inflation simply slowing down the growth of government will get as where we need to be over time. john: good luck with that. thank you. if you would like to keep this conversation , go to facebook or twitter and use this as a tagger over here. that people know what you think. coming up, there is nothing funny about our $17 trillion debt. some hollywood moviemakers did find a way to make me laugh about it. >> what can i get you today? >> i would like to raise my debt limit? >> excuse me? >> my debt lim

♪ john: it's hard to get your brain around how much our government spends. more than 3 trillion this year alone. on top of our $17 trillion debt. sometimes i like to lop eight zeros off of the budget numbers.

then you did a chart like this. it looks like a family budget. when i show this to people they understand. what do you think of these people? making 24,000, spending 305,000, also $11,000 in debt. >> they should get there priorities straight and what they need to be spending and saving money is on. john: this is the federal budget. adjusted zeros off. john: that is a lot. when they see this they get it. at that i was clever to come up with an idea. then i saw a video much more clever and a better way. a man does to a bank to get a loan. >> what can i do feel today? >> i would like to raise my debt limit. >> excuse me? >> my debt limit, i would like to raise it. >> you are in serious debt. >> is pretty bad. a figure we should raise that limit. >> 140,002 under and $70 in debt

>> right. a figure we should raise the limit to about 170,000. i just bought a 60-inch flat screen. john: politicians keep spending. i am happy that even in hollywood there are at least a few people would think that is ridiculous. to get together to make that video. put it on youtube or it has been much more than 2 million times. says meyer produce the film. the actor and director. >> well, we enjoyed making it. it was something that kind of -- we had talked about. at dawn of the idea and pasted to my brother. we were both laughing so hard that is sad that it was something of a shipper will move forward with the right script. john: did you say you are not political. >> we just thought it was a universal theme. if we couldn't lot of fall of the zeros, they cannot get it. it was amazing how quickly people picked this up.

remade this video two years ago and it seems like it is timeless. every time this topic comes up we get a surge of kayten views. people keep coming. of course you found it. appreciate the feedback. john: some of the numbers now are old, which you will see. says myra, and makes me think of that guy on saturday night live. you don't look like him. >> we are from the same area. i get penalized. john: you meiji agger to and sparse. >> just take the credit. >> yes. i am said myers. john: the bank officer has the kind of question that a loan officer when asked. >> to you have some new income that i don't know about? >> no, still make there about 21 grand a year. >> are you still spending 38,000 per year? >> that's what it says.

>> you're adding $17,000 a year to year debt. >> debt limit going up. thing. >> and you cut your expenses? >> yes. now live tonight at $380 at our annual budget. >> okay. here any 17 does not see a year $140,000 in debt and you cut $380. >> in use say it like that it makes it sound like a lot. i cut my budget by $380. john: the 380 refers to what we supposedly saved at the last budget deal. >> right. >> i just want to point out how brilliant that all the actor is. the guy is unbelievable. a little bit of a diva, but he is phenomenal. john: let's watch the end of year fell more of the

irresponsible consumer and banker find a solution still on problem. the same solution america's politicians used. borrowers bring in his daughter. she sighs the loan papers. >> a blessing. she has plenty of time to deal with all of this. i we all set? all right. let's go. we have to make money at the car store. john: thank you. i am glad millions of people watched that. i help you raise people's consciousness. >> thank you for getting it out there. john: next, we look more closely at what the end of their film really mean speed america does assume our kids will pay our debt. >> i'm sorry. and need this year. can i have -- we have to pay for my medicare. >> it was not nice of you test

john: i need this. i need this. i need to take this scooter. >> give that back. john: taking things from kids is nice for me, but the rest of you have to deal with the debt on. almost $17 trillion is bad enough. a real bomb is coming. it is coming biggest people my age really refuse to die, and we baby boomers have been trained to believe that we deserve not to social security but the real budget buster, medicare which includes all the cool this stuff, modern medicine. we paid into social security and medicare our whole lives and are entitled to get our money back. what my generation does not know is most of us will get back much more than we put in. this is unsustainable. and to try to pay for it we commit generational theft. older people basically steal

from young people. people like romansh. he writes about these issues for the national review. so you are not that young, but you are going to have to pay for me. >> that seems to be the plan. and you know, people young men they're going to have to pay for me. that is what this system amounts to come a generational change letter. john: that was what it was supposed to be when fdr set it up. what is wrong with that? >> the problem is that it is just fiscally unsustainable to keep promising each generation that they will get more and more money, especially at the length of the average life is getting longer and a number of kids people having is getting smaller so you have to support people for a longer time and try -- you are workers doing it. john: people forget that when fdr created social security, most people did not even live to age 65. >> that's right. it is one of those things that

is part of our welfare state that has not been modernized and updated to keep the account of changing times. john: some people's ages raise taxes. >> well, you know, if you raise taxes you are hurting the economy. that is just another kind of generational that because your leaving a smaller economy to a feature. you will also not be able to raise taxes enough to make up for the shortfall. it is a huge shortfall. john: so many people roughly my age, baby bonus. you can double tax us and it would not cover this. i keep hearing these numbers. $30 trillion unfunded liability. 90 trillion. we spend 3 trillion per year, which is enough. these future numbers are impossible. >> that is right. i mean, if you run as a good scare before halloween, go look at the projections on u.s. federal that.

those projections are driven overwhelmingly by medicare and social security. john: the 30 trillion is going out about how many years? >> you know, i forget which one -- which numbers go with which because the fact is no one really knows. we don't know what health care costs will be like. we don't know what miraculously, what expense of new medicines will be, but we do know that on the current system the federal government is supposed to pay for all. john: at least some people i talk to outside the studio were wedded to people after suffer to give money to people like me. >> how are we going to pay for that? >> i don't think we will be able to pay for it. leave it to the next generation again. >> i inflation, high prices, shortages. john: the real problem is entitlements. you and me paying for our health care. >> right. >> that's right. john: you want to give some of your manicure back? >> no, not really.

john: right now this is kind of generational theft. u.s. and uni try stealing from this case. can i have -- we have to pay for my medicare. >> it was not very nice of you to steal from my sister like that. john: they don't like it, but they don't vote, and even when they come to voting age we older people are much more likely to vote. i don't see how this will end well. >> that is right. the good news is that we can make adjustments that are modest starting now. the bad news -- for example, we could make social security benefits not rise over time. somebody who retires 20 years from now should get the same benefit level of some the retires today. that would be great if we could afford it. we cannot. that is the adjustment the chicken make nasa you don't have to make a sudden change when

you're out of money. the problem is exactly what you said. older voters, the republicans, democrats, something else, they don't want to make that sacrifice because they have been told they are just getting their own money back even though that is not true. they're getting back more than they put in. john: all the people are richer. the median net worth of someone over 65 is one under $70,000. median net worth of some 1305, three and half. >> warren buffett get social security and medicare benefits. part of the perversity of the system that so much of it is redistributing money. john: thank you. coming up, i will fight with a famous democrat who says what the singer says. >> raise the debt ceiling. of raise the debt ceiling. raise the debt ceiling.

.aise the debt ceiling. .

john: it's hard to give my brain around it. it helps to look at the debt over time. for 150 years america had almost no debt. it rose during world wars, came down after world war ii, but then starting around 1980 exploded. and is gone straight up in this is unsustainable. outside this building. i show people how much we spend per person every year. most agree that america has a spending problem. then ask a with a cat.

>> you can't get health care. >> what should we cut? price social security cards and not sure what else you can get. >> a great deal on the military, medical care. john: that should be cut? >> that's a hard question. john: you can't answer it. >> absolutely not. john: a few people have suggestions with tells me in the san the the point of all those democrats to say just raise the debt ceiling. one of those is the rilliant bob beckel. brilliant because you fight with people every day and often win all by yourself, but you are not worried about this 17 trillion. >> you know, i liked you a lot. every time i hear you talk about this and the fear and pain on your face, i worry about you. the answer to your question is no for the following reasons. has skyrocketed.

as simple reason was his defense spending and entitlement programs. you know, the rest of the budget is relatively insignificant. >> you have to take into account the interest on the national debt. john: the entitlements of the big ones. >> that's right. the interest on the national debt which is almost 300 billion. and at some point -- i say that that does not matter. what is it about the debt that bothered you personally? not bothered you philosophically , but bothered you in your life financially this morning when you woke up. what was it? john: i thought about that 300 billion, 300 million people in the country and fewer than half pay taxes. it is costing me a couple of thousand every year. my bracket probably 10,000.

>> she thought about the cost of your own personal tax. >> and how it will hurt my kids. fewer opportunities because there to pay for that. john: let me try to take you another way. this is assuming the projections on debt are always assuming the status quo, but nothing is going to change. is there reason to believe that is not a bad thing to think that there not going to change things? at some point the answer to the national debt will begin to intrude on programs where you cannot spend money to be democrats and republicans. where can you cut? these people you entered you did not mention. certainly the defense department peer review spend more money for defense and all of the catchers in the world combined. john: but that is not enough. >> well we ought to do is use medicare because it is out of control. john: in the democratic politicians?

>> i talked to them about this. i get to talk to the caucus. i . out that when you keep paying interest like this at some point weather is a farm program or headstart for meals on wheels, something has got to give because you're not going to have enough money. what will get you to finally get this through your head is when the interest on the national debt, forget the rest, we can pay the interest. 300, four under billion, but at a cost of something else. i would say medicare, you redo the formula on social security. social security was never meant to be retirement program. if you go back and let the debate. sure. john: few people who lived past 65. >> of course it has increased. john: raise the retirement age.

>> i would certainly raise the retirement age, i would raise -- what do we pay, 112,000 for social security. that should go 150 to 200. john: takes some money away from you. >> that's right. we can afford that. the medicare come i cannot for the life of me understand why we're spending this much money and people who are wealthy living in florida. we pay them these huge medical payments and to take care of them when 85 percent of the medical payments. john: i'm delighted to year and democrat talking about any catch these days. we're out of time, but thank you. another time. coming up, next time we run out of money with the faults, wouldn't you rather stiff the chinese to back what would defaulting on ojohn: before thet

down we were told a shutdown would be a catastrophe. what happens? >> how do you feel about the shutdown? >> i personally love it. life goes on. john: right. most people hardly notice the

partial shutdown. but, of course, defaults would be worse. default means a government cannot pay its debts in full. i am told that would be a real catastrophe. >> the pain would be felt across every sector of society. >> it plunged this country back into recession. >> this time we are playing with fire. john: defaulted not happen this time, what about next time? why not just default? when you read adjustive the chinese are those bankers that hold bonds rather than not pay social security or the military? i would. but no, america must not defaults. an economist at george mason university, and i assume you know more about this and i. where do i go wrong? >> part of it is that so many of us already have invested in america. pension funds, banks we old savings and and retirement accounts which are always that we have saved. the government breaks his

promise to debt holders it is breaking its promise to many of us. john: at the rate we are going we will not have the money. so they can inflate the currency into nothingness so they give us the money but it has no value. stiff the chinese or the bondholders or they don't pay the old people in need the money . >> those are the three of the options that face all of us. i think they are all of the choices. in real life will the rich countries to, especially the u.s.? we will do some mixture of raising taxes and cutting spending. politically and economically it is hard to stay fit to the bondholders. john: why? russia defaulted, argentina defaulted. a couple of years later they were doing well. relatively well. still argentina and pressure. >> those are middle income countries, not the richest in the world. there is something different about the average american

getting pulled over for a dui and the class valedictorian. when a country like the u.s. which has made every single bond payment since the constitution was written, when a country like the u.s. breaks a promise to its bondholders investors will be terrified for years to come. john: we break promises all the time. we said we were going to attack syria. the president said in 2008 that he would cut spending. why should this be so different. back to argentina, they suffered greatly. countries were way out of whack. within a couple of years there were growing at 8%. they got a new start. >> every once in awhile someone who has bad luck and a family that has had been financial like can go through bankruptcy and come right out soaring. the u.s., we have been a financial center of the world for quite some time. the u.s. has been able to borrow at super lows super cheap interest rates in the private sector builds on the stability of the government sector. people would be afraid to lend

money to big u.s. firms. john: i would think there would be afraid now because they can see the direction that things are going. merely by saying we will give you a 5% tariff cut, that then suddenly changes everything and interest rates shoot up? >> of 5% derek that might not scare international investors or american investors, but of 5% erica promising to pay 95 percent of what you know is not going to save us that much money either. john: me need much more. the stick a look at this video made by a group says it is a terrible thing that we rely so much of chinese money to cover our debt which shows a chinese teacher mocking as. [speaking in native tongue]

john: but what are they going to do? i don't see the problem. they want repossess the empire state building and apple and general motors. what can they do? >> it is always tempting for national governments to default on their debts were just that reason. there is no reposition agency in most cases. the reason why is because nations want to keep their reputations. there must be some reason why when rich countries go to the trouble of defaulting they end up only partially defaulting. they repaid about two-thirds of it because they really hate being kept out of the international credit markets. government and the private sector reliance on borrowing to keep the engines of capitalism running. john: thank you. coming gap, or $17 trillion debt is not an insurmountable problem. it just requires a few plug thi

this week, congress kicked the can down the road again. but in a few months we'll be up against the next so-called debt limit. congress created those limits because politicians thought it might put a ceiling on how much government spent but it didn't. or maybe it slowed things down a little bit. but now we're about to pass 17 trillion in debt and soon, according to promises made to my age group, handouts and debt payments will eat the whole economy. at this rate, disaster is coming.

if the attitude is many captured nicely by the performer in that recent tv video we've been playing. ♪ raise the debt ceiling >> none of us should be negotiating on the debt ceiling. it should just be lifted. >> so congress did, again. the only good news is that this time, thanks to some republican pushback, big government is finally part of the debate. lots of people i talked to said government needs to be cut. >> this idea of kicking the can again to february is just a terrible concept. >> tonight i poked fun at how many couldn't name any specific cut. >> that's really tough. >> but i should also point out that some could. in my experience, this is new. >> what would you cut? >> education, spending and social programs. >> really? what about the people who need them? >> that's what the states are for. >> you don't want to pay for my health care? >> no.

sorry. >> what would you cut? >> anything not authorized by the constitution. we eliminate. >> what would happen to the poor people? >> well, i'm a poor person. i would eat, find a way to eat. >> this woman borrowed $250,000 to pay for law school. >> would you like the government to stop giving loans like that so we don't go broke? >> i think the government makes it too easy for individuals to obtain loans. >> it was too easy for you to get the loan. >> it was way too easy. no questioned asked. here's 50k. enjoy it. >> government shouldn't dominate the student loan business. government spends an insane amount of money on harmful things. i nominate nancy pelosi for ridiculous politician of the month for saying this when asked why won't democrats negotiate cuts? >> why now? because the coverage is there. there's no more cuts to make. >> they spend almost 4 trillion and the cup board is bare? this is nuts.

central planners think without big government planes will crash, trains, parks and big bird will disappear. but none of it's true. there's so much we could cut and should cut like npr and pbs funding. there shouldn't be government television and big bird doesn't even need the money. foreign aid, it usually does more harm than good. on to bigger cuts, end the war on drugs when americans hurt only themselves, leave them kill fannie and freddie. eliminate cabinet departments like energy, agriculture, secretary. commerce happens. it doesn't need a department. education is a local responsibility, the fed spending $100 billion a year didn't raise test scores one bit. finally, the three biggest programs. first, defense.

we are not safer when we try to police the world. we could cut military spending by hundreds of billions if we limited the military's mission to its intended role, protecting americans. and finally, social security and medicare. we have to do things like raise the retirement age and turn medicare into an insurance plan that's self-sustaining. that means if i want the latest and fancy medicine, i have to pay for it myself. there's much more that could be cut, downsizinggovernment.org, analyst detail hundreds of ideas. they know they can't. there's a chapter i cut all the way to a fat budget surplus. but to save america from bankruptcy, we don't need to make all those cuts. we could grow our way out of debt if congress simply froze spending. it won't do that either. but even if they limited spending growth to 2% per year,

we'd balance the budget in just three years. so let's do it. and that's our show. see you next week. gyn kelly. welcome to "hannity." tonight we have a message for team obama care. we hope they are listening. it's time for kathleen sebelius, health and human services secretary to go. for the hour i'll be joined by a studio audience. some will disagree with that. before we hear from them it is important to point out how disastrous the obama care roll out has been from day one. the blame falls squarely at the feet of the secretary of the health and human services which is exactly why the republican national committee is calling for her to be held accountable. in addition launching a twitter