the reverse of the. well i'm tom hartman in washington d.c. and here's what's coming up tonight on the big picture the clock continues to tick closer to august seconds debt ceiling deadline and the g.o.p. is holding firm on their way or the highway approach to tax hikes so if a bipartisan budget deal is not reached in time how severe will the recall repercussions be for you and me meanwhile another former power nation prepares for possible economic collapse italy with that country's bronze now under attack what's

to become of the euro and while congress prepares to cut seniors' medical care the leader of the anti and medicare hack is caught second back problems a line priced at three hundred fifty dollars a pop i'll talk to economists and feinberg who caught paul ryan in the act. you need to know this high stakes talks between republican leadership and the white house fell apart again last night when both sides announced they were gridlocked on a deal that has the administration pushing for four trillion dollars for the deficit cuts over the coming decade and the republicans are refusing to budge on tax hikes speaker john boehner pulled his support for a large scale deal over the weekend at a press conference a sporting reiterated if the republicans will not pass

a bill that includes tax hikes on billionaires or corporate jets and if they really all they really care about is cutting entitlements programs. can you control government spending without fundamentally reforming entitlements. i think the answer is no but the american people will not accept and the house cannot pass a bill that raises taxes on job creators this is just hours after the president went on the record to say that he would not support any type of short term increase in the debt limit and that the only viable solution is for the republicans to compromise on taxes. i do not see a path to drew to a deal if they don't budge period i mean if the basic proposition is it's my way or the highway then we're probably not going to get something done because we've got divided government. i'm happy to consider all options all alternatives that they're

looking at the things that i will not answer are a thirty day or a sixty day or a ninety day or one hundred eighty day. temporary stopgap resolution to this problem this is the united states of america and we don't manage our affairs in three month increments while the president and speaker boehner digging their heels in the august second deadline of when the united states will hit its debt limit is fast approaching and once that happens there will be some very real consequences for americans who depend on any type of government benefits to live their daily lives and the situation may be more dire than anyone realizes right now a new study from the analytics shows that nearly two out of every ten dollars that went into americans bank accounts last year came directly from the government in the form of payments like jobless benefits food stamps social security and disability benefits no matter what the republicans want you to believe this type of

government spending has not been the cause of our nation's deficit let's just lay it out what's happening right now first of all republicans are replaying the one nine hundred seventy nine jimmy carter playbook will get more of that in just a second but to lay out you know where is this deficit coming from and how is it organized here is the the graphic with the tax cuts that would be your basic this is the big this is the deficit projected out the twenty nine hundred years two thousand and eleven right here the yellow card here is the bush tax cuts this is this is where we be without the bush tax cuts the wars in iraq and afghanistan the impact of the great recession. and the recovery building things like that ok so you we could basically there would be no increase in the debt if we ended the wars but most importantly if we got rid of the bush tax cuts but there is republicans now say they're not going to rid of the bush

tax cuts and b. what they've been trying to do is destroy in tallinn programs from the get go nine hundred thirty five f.d.r. gets social security passed but if the republicans want to do take it down they've been fighting it ever since in the one nine hundred seventy eight or nine hundred sixty s. when when l.b.j. passed medicare they've been fighting that ever since is socialism you know ok but we do so we do not have a spending problem our debt has been fueled by the bush era tax tax cuts and war spending the impact of government spending our deficits it has pretty minuscule here's the here's current job deficit projections are begin the yellow is the wars in iraq and afghanistan the goal here is the bush era tax cuts look at this the biggest part the blue here is the economic turndown which you know basically if you get rid of these and then this is where we'd be without these factors and there's a there's tarp in the recovery measures and here it's

a loop this little slice now without these things we basically would have no increase in the debt or the deficit or both so what's going on why is the g.o.p. insisting on cutting government spending and not compromising on tax hikes there is an objective here they actually are trying to crash the u.s. economy this is you know back in one hundred seventy nine and their sole objective they're making sure obama's not reelected in fact i mean this is not even something radical and new this idea of making making sure that obama's not elected here's mitch mcconnell talking about it yesterday morning. one of your quotes from last year where you said quote the single most important thing we want to achieve is for president obama to be a one term president so how do you respond to those democratic lines of attack well that is true that's my single most important political go along with every

republican in the country that's. now oh and you know they tried the same thing in one nine hundred seventy nine jimmy carter was president and the republicans were hysterical but our national debt was a little over eight hundred billion dollars that's point eight trillion we have not yet hit one trillion ronald reagan took us to one trillion blew through that two trillion blew through that almost a three trillion and then george herbert walker bush blew through that took us up to about five trillion but we had not yet hit one trillion dollars but in seventy nine the republicans wanted to weaken jimmy carter and so they did the exact same thing they're doing with with obama right now they fought and fought and fought and fought and fought said no no no no no until the day of the default. and in fact we actually did default to the tune for one day to the tune of as i recall about one hundred twenty million dollars in bonds it hurt the economy it and carter's weak response of the republicans led ted kennedy to primary and ted kennedy came out and

so you know you know he's not strong enough and he's not progressive enough and try to push him to the left and try to make him stand up and and you know conventional wisdom is that when a president is primaried then they're going to lose because that weakens them but it could be the other way around we could we can keep confusing cause with effect it could be that a president who's so weak that they get primaried is not going to win and therefore that creates a vacuum that people step into so anyhow it's unlikely that obama's going to face a primary challenge but he's got to realize that these republicans are playing war and he's playing neville chamberlain right now meanwhile we need to do some you know you and i we need to be joining movements movement politics is where this thing is going to come from rebuild the dream dot com for example the van jones one great get over there get active and in our daily take i'll show you the speech that president obama should have given to.

it's time for our daily call your chance to tell us what you think here's today's question if the debt ceiling gets raised with a deal that is moving forward it will cause more inequality in america your choices are yes the seventy five percent spending cuts that include social safety nets in the deal will further the divide or no raising taxes on the wealthy two thousand and thirteen will make up for spending cuts that are going to target an icon and let us know what you think will be open until tomorrow morning. crazy alert a slippery criminal ohio police are looking for a banana accused of assaulting a gorilla that's right a man dressed up in a gorilla costume for a promotional stunt was standing outside a cell phone store in strongsville ohio where not to know where another man this one dressed in a banana suit ran up and attacked the gorilla knocking him to the ground but manager of the wireless store described the attack on their mascot for reporters

made a terrifying like this like something like a spartan from three hundred except he was a banana after the altercation of an animal and fled the scene unclear what the motive of the takedown was beyond the ironic retribution of a banana getting the best of a monkey which means anyone dressed as a rabbit today should be on the lookout for menacing carrots. cut it out while our nation tour is going to actual hardship paul ryan is spotted on capitol hill enjoying a few bottles align with the weekly minimum wage of a chewing gum family details of the big spending after the break.

let's not forget that we had an apartheid regime right here. i think bombing even one well. we have the government says they're going to keep you safe get ready because you give them their freedom. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realize that everything you saw you don't i'm sorry this is the.

european investors were screwed today is the markets are going nosedive amid fears that italy with third largest market the eurozone may be the next european nation to succumb to an economic collapse traders fear italy's banks will take heavy

losses on the debt of bailed out greece ireland and portugal and that the italian governments and debt will ultimately prove too big to manage without international help last week ended with a heavy selloff of italian assets and european markets on friday an apparent falling out between prime minister silvio berlusconi as finance minister mr g. treatment as tensions grew in italy for the eurozone officials met to figure out how to get banks to participate in the next round of bailouts for greece these negotiations have been undermined by threats from ratings agencies and say that they're going to consider a bank roll over of greek debt as a default so how serious are these threats of collapse in europe and what could it mean for the global economy and for even i. prospects here at home how would affect us and joining us now to offer more insight on today's news from the euro zone is max prague wolf economist and professor of economics at the new school university graduate program in international affairs max welcome back to the program always

a pleasure to join you thanks for having me thank you how serious is the threat of collapse of your of the euro zone's third largest economy of italy i think that the italian economy is in much better shape in the perception of the italian economy or than the trade in the italian markets would suggest from the last few days that being said the situation in the euro zone and in to a lesser extent in italy is fairly severe as we see continued downgrades of portugal last week major fights between the european union and the three large rating agencies donna styles near where i'm sitting actually in new york city new york and continued pressure on ireland and spain and exciter out so we do see a lot of real serious issues here even if they are slightly overblown and so in the stock trade in my day by day basis. you know there's a bit a whole spectrum of economists from the. kind of fringe to correct me if i'm wrong paul krugman who have been suggesting for some time that the euro the whole euro

zone that this idea of taking all these very disparate economies and having them all run of the same currency the same central bank is just basically nuts and unsustainable is what's going on right now with greece and italy and portugal and spain proving that or is this just a bump in the road toward you know some something coherent that actually is viable for the long term. well i think the verdict on that still out i do think that the european union involves having a monetary union which the monetary policies are united under the european central bank and there's a single currency the euro but they never have a common fiscal policy and so the differences between the countries are kind of a lighted are ignored for a while and they're now coming out in an exaggerated form one of the ways we would test that in the marketplace is to look at what it cost the different governments to borrow for ten years or to issue what's called the ten year sovereign a government issued cards and the germans can borrow money for ten years for three

percent and the greeks are asked for sixteen percent and the italians are asked for five and a half percent and rising and having that much difference of financial situation inside the single monetary policy of the single european central bank is quite a serious strain and everything that people had ignored and hope for the best about the euro and hope would not assert itself is asserting itself rapidly in a herky jerky fashion since two thousand is there any kind of parallel between what's going on there with the different countries and what's going on here with the different states you know minnesota shut down right now and you've got other states we have i believe that we have twenty four states the actually raised revenue raised taxes spent more money over the last twelve or eighteen months and saw a decrease in unemployment and an improvement in their economy then we had twenty five states correct me if i'm wrong on the head backwards that did the opposite they cut government spending that in some cases cut taxes and as

a result their economy saying their unemployment went up. is you know do we have that kind of a european problem here or do they i mean is there are there are there any parallels. yeah there's a lot of parallels i mean the biggest parallel and it's a very good question is that it's actually the same story part of what we've seen from the united states is a lot of activism from the monetary authority in our case that's the federal reserve which has cut interest rates to between zero one point two five percent for prime brokers and is about to break the record for not just cutting interest rates as low as they've ever been before but keeping them low as long as they've ever been before but we have a fiscal authority that's our tax and spend decision in washington which is on a crass you know blog a second crash course with destiny that doesn't look too good and the other reason that it's very similar is that the basic underlying problem in the western european context or the american context is the same which is we have a structurally broken economy in other words the government here is being asked to

do more than it can do with the revenues that it has because of its tax policy likewise the story is very similar throughout western europe and we have to figure out how to structurally fix that but instead we're trying to do cyclical responses or act like it's just another recession and it isn't the basic structure of the economy that's broken so the master narrative for the two predictive predicaments are about identical very much similar and the manifestations are culturally and nationally inflected in different ways but are very much similar so the story is yes very much so more well max who we're out of time but i hope we can continue this conversation fascinating to get into you know should america break up into six or eight states or something like that it's but you know we don't have the time for the banks thanks so much for being with us again. my pleasure thank you the irony here is the erupt may just be embarking on the road that we've been on the for the past three years according to industry watchers italy is simply too big to fail just like our bank stores and

a credit crisis in italy could put the future of the european monetary union in jeopardy unlike the greek financial crisis which could be compared to the two thousand a collapse of lehman brothers for example here in the us italy is too big for the market the overall european market to absorb absorb any kind of a default or even a bailout without major losses and these european banks and policymakers will need to find another solution and you can be sure that whatever plan they come up with it's going to have a hefty price tag and it's not going to be paid for by the banks who caused this mess. but. what can seven hundred dollars buy in washington these days well if you're a couple making minimum wage that's one week's harder and wages the republican congressman paul ryan that's two bottles of wine that you and your two buddies can share over dinner at one of the swank is restaurants on capitol hill here in d.c. while you're busy discussing how to screw your people and privatized medicare coniston rutgers university professor susan feinberg watched ryan and ins sit two

bottles of outrageously priced paint on a while after a much fanfare from the restaurant's waitstaff the irony of ryan joins us luxuries where he spends his days on the hill promoting cuts to programs that support seniors in the poor simply too much for so she did something about it joining me now to share the details of the event that unfolded during that what was supposed to be a quiet birthday dinner with her husband is economics professor susan feinberg professor welcome thanks so much for having me thank you for joining us would you call yourself it well actually even before we get to that tell us what happened just give us the the the snapshot of what happened when you were there. well we were sitting at a table and after i guess where the minutes or so congressman ryan came in with two companions who we didn't recognize and one of the companions very loudly ordered a wine and he ordered it by number from the wine really so you know i kind of hope

that my husband said oh handy the ryan let's let's it was in order to you know it turns out it was a three hundred and fifty dollars bottle of wine and i think either the most or second most expensive bottle of wine on the menu at an expensive restaurant and. about ninety minutes later they ordered a second bottle of wine which you know came to seven hundred dollars total for the two bottles and i was just doing some calculations of well how much time would it take a two income earning couple earning minimum wage working full time to be able to buy that bottle of wine could be buy it in a week what salary would you have to make in order to be able to clear enough in a week just to be able to buy that bottle of you know those two bottles of seven hundred dollars winds and when you look at it in the context of the fact that congressman ryan is the architect of

a budget plan that will usher in some of the most draconian. budget cuts to america's most vulnerable citizens to our seniors to our low income families. in terms of privatizing medicare and taking health care benefits away from low income families than reducing government subsidies for health care and many many other different kinds of budget cuts it's just me it's really beery ironic in theory hypocritical that they were sitting there enjoying that bottle of wine that is just stood up and walked over to their tables whatever are on the way out drop by a sweet finish. their dinner and paid and i walked over to their table and i said excuse me congressman ryan i was just wondering how you can live with yourself drinking seven hundred dollars worth of the wine which is called an issue so i thought of it as she so when if you know

a full time american working family couldn't even earn enough to buy that wine in one week and i just wanted to know how you can leave yourself while pursuing policies that will hurt those and they're disproportionately and and he responded on really he she had no idea how much they're going to cost but with clear his response was kind of he looked down and said it cost that much you know like i don't know what if you really hadn't looked at the line that it was somebody else at the table and that needed to be i guess cliff assonance that looked at the wind in the ordering of the wind is this is this is a fair guy who manages the twenty six billion dollar hedge fund yes it is it is and and is it true that he dropped the f. bomb on you basically told you to he did well when so i asked her i approach after i said my piece to congressman ryan clift asness basically sort

of shouted back at me. well i ordered this wine and i'm drinking this wine and i'm paying for this wine and i just looked at him and said what are you some kind of lobbyist or something and we proceeded to argue a little more but it soon as i brought up the l. word he got really really angry and confrontational and within i would say about fifteen seconds he was standing up and yelling at her remark. professor just very quickly we'll we just have fifteen twenty seconds left what what as an economist what's your opinion upon ryan's plan. i think they're absolutely terrible and i think. you know to pain that health care expenditures by the government don't reap a lot of money back to the population we get a lot of productivity dollars back from here of people are making sure that they

have help here and then trading that off war tax to corporations and lowering the top marginal tax bracket to twenty five percent those are things that we're really not going to get very much out of but providing health care to america's workers and america's seniors are things that will benefit all of america for years thanks so much for being with us tonight and he had a mature and for having the courage to speak out thank you but this is pretty crass there's a bigger picture here about how the republicans including paul ryan are using the disaster that they created with thirty years or reaganomics and starve the beast and sanity to frankly try to unseat president obama in two thousand and twelve here's here's the real simple way that works and economy runs on consumer spending but seventy percent of our economy is consumer spending about twenty percent of his government spending about ten fifteen percent of it is business to business spending so basically it's consumers driving the economy and consumers are people

who have money in their pocket and during a time of serious unemployment right now are consumers are broke and they're unemployed and they're spending their unemployment checks which is why we know that if you if you give somebody a dollar an unemployment check they're going to go to the local restaurant and spend them and local restaurant going to buy food in the local farmers and local farmers going to go to the local store and on and on and on their dollars going to come two dollars or three dollars or four dollars it's going to come substantial until they finally go to wal-mart the dollar goes to china so. or vietnam or whatever and so bottom line here is that unemployment stimulates the economy. so if the republicans are serious in mitch mcconnell's we're going to make obama one term president what are they want to do they want to crash the economy just like when they ran jimmy carter up against the debt limit nine hundred seventy nine and we defaulted for one day and it jacked up interest rates which damage the economy

as we went into the one nine hundred eighty election i mean already weakened economy and even worse this is a perfect is an absolute replay so you know right now the republicans this is this is why the republicans negotiated with obama that they wanted two years of the bush tax cuts right through the elections of two thousand and twelve keep the economy on the edge and no more revenues but the only one year of unemployment benefits which will run out at the end of this year which means that another four or five six million people are going to lose their unemployment benefits as we go forward in fact in florida it's going to be four hundred seventy six thousand people in michigan two hundred sixty seven thousand and arizona forty five thousand or one out of every ten unemployed be or ever for every job that's being offered this town employing white people looking for that job these people are going to stop having money in their pocket they're going to stop stimulating the economy and that's going to be a disaster. coming up rupert murdoch's news corp stock suffers

a massive drop in the light of recent in allegations that the demise of news of the world in the first major crack in india moguls empire building a wall street journal and five so-called. let's not forget that we had an apartheid regime right. i think mummy feeding on the well. whatever government says there can feel safe get ready because their freedom.

you know sometimes you see a story and it seems so for langley you think you understand it and then he lives something else and you hear sees some other part of it and realize that everything is all you know no i'm sorry welcome to the big picture. the first. few.