and you know it so it's a topic that hits close to home for a lot of people mike riggs associate editor at reason magazine thanks so much you all right guys that's going to do it for us for now i want to thank you so much for watching and you should follow me on twitter you can find me at christine for example have a good night. good afternoon welcome to capital account i'm lauren lyster here in washington d.c. these are your headlines for wednesday september nineteenth two thousand and twelve simpson bowles it was obama's bipartisan deficit commission in two thousand and ten but it keeps coming up mitt romney paul ryan joseph biden they've all flung it

around as a political football in recent speeches or interviews we will talk to a former republican senator a senator and he was the co-chair of the simpson bowles commission alan simpson about the facts and how he proposes to fix the deficit and the august u.s. housing starts number came in below analyst expectations today while mortgage lending declined to its lowest level in sixteen years for two thousand and eleven according to a report from federal regulators also fed ex which is an economic bellwether its global growth forecast i could go on the point is this is all more evidence the u.s. economy and any kind of recovery is slow going at best so how do you sell us deficit reduction as a top priority in this environment plus the u.k. city of bristol launches its own currency and it reportedly is off to a pretty solid start as the u.k.'s largest alternative to sterling will talk

alternative currencies and loose change let's get to today's capital account. so simpson bowles in two thousand and ten it was the bipartisan deficit commission president barack obama created whose moment of truth to report was a proposal to reduce the us budget deficits by close to four trillion dollars by twenty twenty stabilizing the u.s. debt and then reducing it over the next few decades sacred cows right and left were put on the chopping block included was an overhaul of the tax code so perhaps it's no wonder that it didn't get very far republican congressmen and now v.p.

hopeful paul ryan who was on the commission voted against it and president obama walked away from it as well and yet it keeps coming up here is paul ryan first talking about the president. he created a new bipartisan debt commission they came back with an urgent report. he thinks them sent them on their way and then did exactly nothing but. they talk with great urgency about the nation's debt and the need to act to act now but not once not one single time did they tell you that they rejected every plan put forward by us by the by part of simpson bowles commission they referenced. yeah that doesn't add up with the facts now they were speaking at the r. and c. and d. and c. respectively and then mitt romney and in august radio interview with sean hannity

said his plan is very similar to simpson bowles it's really not by the way simpson bowles proposes to treat capital gains like regular income and it cuts defense spending as two examples that are pretty much the opposite of what romney is calling for romney proposes to eliminate capital gains tax for the so-called middle class and increase military spending so let's get away from all this political rhetoric let's have a cold hard conversation about the u.s. national debt which is now above sixteen trillion dollars larger than the g.d.p. and let's talk about how some symbols in today especially as the hysteria at the moment it's all about this. i'm talking about the icy cold fiscal cliff so joining me now from wyoming is

former u.s. senator who was co-chair of president obama's simpson bowles fiscal commission alan simpson himself so first thank you so much for being on the show today senator it's a pleasure to the north of your wonderful we're on the border for. all right and we're happy that they hosted you to do this interview now let's talk simpson bowles because i have to say senator simpson after reading it i can understand why it didn't get very far in washington at least in this political climate there's literally something for every special interest to hate a sacred cow if you will defense spending is on the table in title meant an overhaul of the tax code do you think there was ever a time or a congress or a president when this plan would have been taken up. i have no idea but they'll kick the can down the road forever so you know what's new finally it's throw something out and then they play their little game last august a year ago and put together a sequester that was supposed to turf them that's

a six hundred billion dollars chop with no common sense to add on defense or security in a six hundred billion dollars charge on non-defense and they thought they think that was the trigger mechanism that would make them do something but they maybe maybe likely do nothing yet well and then they are scrambling where as they could have had some kind of a roadmap do you think just to stay on this for one more moment if a president did take up some seven balls or eight or congress did it do you think that there would be any way for him not to get completely hacked up by special interests and end up benefiting the most powerful while the little guy without representation in washington from a horde of lobbyists gets to bear the brunt of it. well we knew we would be savage because we did hit everybody and that was our intent you can't cut spending your way out of this hole you can't tax your way out of this hole and you can't grow

your way out of this hole we have testimony from groups all over america for seven or eight months and not one economist said you could grow your way out of this hole with double digit growth for twenty years so either if it people say oh you must be so her children let me tell you going it doesn't pay me at all now i can only tell you that young people like you and my children and grandchildren will be savage by the selfishness of these special interest groups and especially the a.a.r.p. we went to them said surely you can help i mean you know where we're are you well we'll help them down the lick and then we did do show security reform we didn't lose the budget on the backs of poor old cian years or take. ladies in their wheelchairs in room or foot building or break their patients in the hospital good grief the crap you have to go through to listen to these guys whine and so we said

we're going to raise the retirement age to sixty eight by the year twenty fifty in the a.a.r.p. how will people ever be able to prepare for that i said i don't know they have the figure it out i mean you've got that so that's certainly one example i a question on now because it's been a couple of years but the economy is growing even more slowly than when you presented this and unemployment is still high interest rates are at zero percent one of the plans for example with your social security was to push back the retirement age and encourage personal savings this is an environment there were people can't save there is no interest at zero percent interest rates courtesy of the fed so give us some of these developments also for example the long term unemployed which is a staggering number when that change some of your proposals for social security. let me tell you we've built into our plan we said we don't want to do anything that will injure a fragile recovery we didn't do

a lick with we didn't do anything with food stamps or workman's comp we didn't hear any of those precious little things and the irony of all this business by doing nothing let's just do nothing that's what the a.a.r.p. wants that's what the committee for the preservation of social security wants that's what the great panthers wanted she overheard legislators the pink panthers do nothing well let me tell you gang then in the year twenty thirty three twenty one years from now you're going to waddle up to the window and get a check for twenty five percent less and where the hell was the a.a.r.p. when they took the payroll tax and target from six to down to four to all my life i've listened to the a.a.r.p. babble about the precious blood stream osho security. which is what the payroll tax and they just sat mute and moot and stooped to let it go down to five six two for two it took about one hundred ten billion right out of the so sure kirti

accounts ashley a p about that baby ok so you are not a fan of that special interest and that's just one of a court of examples we could give let's talk about the politicians that are influenced by them because i want to know politicians keep bringing up some symbols but let's start with one of them who was on the commission voted against it he is considered a budget guy he's running with mitt romney paul ryan why do you think he didn't vote against it do you think it was about the tax increases or that the change the tax code or the defense cuts or anything it truly was about not being enough of a reform for health care well he said it was maybe not enough but we went over to see him hansard wing also voted against a very bright young congressman third in the leadership and then david camm wonderful guy head of the ways and means all three and voted against it we went over and saw them i said to them boys if you voted against this proposal because you're scared of grover norquist wandering the earth in this white rule saying that

anybody who raises one penny of revenue a tax increase without a commensurate cut in spending will be we don't know what the sinister result is before it can be due to you can't murder you can't burn down the house the only thing grover can do to use defeats you for reelection and if that means more to you than your country in extremity when it's looking for gutsy patriots you shouldn't even be in the congress do you think that is the case that these guys care more about their reelection than they care about the right of the country then they said here's the reason they did as i rant and it was a beautiful room time you've recorded somewhere just then i said i said well why did you then vote against it and they were very clear and they said we feel that if you get rid of the employer deduction of employee health care premiums the employer . yours are going to look around numb stunned thinking how to take this burden and they're just going to take all those employers into medicare obamacare whatever you

call it doesn't matter what you call it it can't exist it can't sustain itself it hadn't got any cost containment in it and tell down the road and nobody would touch it down the road because the seniors would tear your head off in the medical profession in the lawyers i mean you know it's called reality for me i think that's a fair point that you think i had a good reason to not sign on to this plan it was a good one for me i accept as i said that's an honest explanation that the employers will will in their panic get unstuck a heavy load will go drift all their employers and obamacare and bloat if they said they would just bloated further well so how does that impact your opinion of the plan because that is one of the elements of it if you get rid of tax expenditures are these deductions and one of the big is what you named which is the employer's a doctor for health care costs so you think that's a bad idea. well i tell you everything is a bad idea that's why we did it that way but if you got rid of all of those tax expenditures mellish look at tax expenditures just for

a second i won't get technical those are spending by any other name they are simply earmarks by any other name they are if they are they are taking money from the federal treasury and guess how much that is one trillion one hundred billion a year well what the hell is the deficit this year about one trillion two hundred billion a year who is fooling who we said get rid of all of and then give the people what they've been shrieking for for years a tax base with lower rates broaden the base take spending out of the code and we said we'll get rid of the law we'll give you something you will pay percent on any income between zero and seventy thousand to seventy thousand two hundred ten you pay fourteen everything over fourteen you pay twenty three and take the corporate rate to twenty six from thirty six. and go to a territorial system where you don't lose the ability to type this stuff here and overseas bring it back here and let the music here know that what we did and i understand your plan it would amount to people paying more for taxes for

a lot of folks so when we get back i want to talk about how that would impact things now given that the economy is still just kind of sputtering along so we'll have more in just a moment after this break with former u.s. senator alan simpson. and still ahead more with our gas and during lives change we'll tell you how one city in the u.k. sand scrawl this or taken a job in our own currency but first our closing market numbers.

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backing up to simpson bowles in two thousand and ten and reading that report today it's interesting because back when it was written there was an urgency in the report about addressing the debt it kicks off saying in some of the early parts of the report that the era of debt denial is over or that a fiscal crisis looms that interest on the debt could dramatically increase as interest rates rise and investors could lose confidence that our nation is able to or willing to repay its loans possibly triggering a debt crisis so these are all the concerns and i couldn't agree more these are all concerns of mine and ours at the show that we talk about every day however we have

had a weird two years since we're despite the u.s. losing its aaa credit rating continuing to rack up staggering debt treasury yields have been at record lows the ten year today is at a one point one percent yield it's a pretty low borrowing costs for good old uncle sam so i want to get ask our guest why he thinks this comes home to roost let's bring back in former senator alan simpson one part of bowles simpson he was a co-chair so senator after talking about the last couple of years where some bizarre things have happened where the u.s. can still borrow it really low rates and dismiss is despite the aaa credit rating being lost by least one major ratings agency how do you convince anybody that now is the time to tackle the debt and when you think this does come home to roost i don't have to convince anybody the markets will do that if you get all of the market report that you drew there's

a tipping point here. trillion bucks nobody knows what the whole a trillion bucks that is. we don't use charts or power point you just say if you spend a buck a second from right now you wouldn't hit a trillion for thirty two thousand five hundred years if you spent a million a day since the birth of christ she wouldn't be a trillion year and the big bang theory of the universe without getting into religion some folks the big bang theory of the universe happened certain billion six hundred million years ago all the planets stars that thirteen and that isn't even close to a trillion and we owe sixteen of those babies how stupid you have to get for every buck we spend we borrow forty one cents today your country borrowed three billion six hundred million we'll do it tomorrow and tomorrow i don't have to convince anybody because the markets will do it forget the rating agencies the guys that loan us the money will say you're dysfunctional you've got your head large somewhere somewhere and you're dysfunctional and we want more money for our money

we love you but we want our money and gifts and who gets hurt oh sure the little guy what a pathetic parkers it is a a parker see how much do you think the federal reserve is enabling this though right now this deficit spending by all in congress to sleep with record low interest rates congress is they have to make tough choices right now the interest rates are so low. i have no idea but i know you can't do q e two eternity kukui one and q e two and q e three who the hell is killing that she is calling pretty good money yet and it's one point in time it's going to catch up i mean it happens at your dinner table when you talk about the debt at your home i mean and then somebody said we need a stimulus hell you've got one it's called one trillion two hundred billion dollars in deficit that's a stimulus that's money you've borrowed it's just that is true in two years though after simpson bowles and given everything we're talking about that may view rolling

people to sleep what is your most compelling claim to the american people that you have to address the debt now that you can't keep kicking the can down the road at a time when people are concerned about jobs and economic growth and what do they say to you when you go out because you want to talk to people let me be as clear as i can do that we give to groups we should probably talk to for five hundred thousand people since we threw this baby into the harbor and december of two thousand tim we just say to him. pull up a chair we don't do bull or mush we will tell you where your country is and when we take questions of any kind we don't like unfiltered we get a standing ovation people are thirsting for truth instead of watching politicians stand on their hind legs and say we know we have a problem but we can get it done without touching precious medicare precious medicaid precious defense and precious so security those people are fake phony now that's you can't do any better than that i'm not here to defend it i'm proud of

what we did durst and i worked like dogs and we threw this baby in is like the stink bomb in a garden party they keep talking about it and once they talk they look in there and they say oh my god look what this did doyle and gas depletion allowance oh my god look what this did to life insurance what it did to municipal bonds what kind well america's most just keep keep kicking the can but now we finally have a young group of people called the can kicks back now we have a debt we have a group called fix the debt dot org well it will show now we've raised about thirty million bucks to help people defend themselves after they vote for it if they do but if they don't don't make a living they're pretty a bit of difference they're just going to stumble around in it and the markets will call the shots and you and i won't know when it comes it could be two years it could be two months it could be six weeks so yes so so you know it doesn't sound like you're hopeful that anything is going to get done in washington on that the

markets are going to be the ones that have the final word though i do want to ask you said you guys worked your butts up on this i can tell i read this whole report and there is a joke in washington that when you need to when the going gets tough just appoint a commission what do you say to criticism that all your hard work was just political theater. let me take those people are fakes and phony that one theater i bust at the odyssey my but there's nothing left of it it's that went off with way you've gone on now let me tell you political theater that is the phoniest excuse for anything we toughened that baby erskine i said well we listen to these guys moan there was no truss originally took history months to establish trust the republicans in the democrats fighting about who was the biggest spender and then they said well we can get this done by let's see we'll cut waste fraud and abuse and all earmarks all foreign aid nancy pelosi is aircraft air force one and congressional pensions great i'll get your four percent of the hole we're in i can

only tell you we worked and we worked hard we put a sixty seven page report in from the american people and you damn sure they don't like it because we punch a hole in every sacred cow in american polluting the ones we love and we got a vote from five democrats five democrats five republicans on a range of it illogical prowess from dick durbin yes democrat progressive and tom coburn so america there you go play around with it kick it around make fun of it denigrate it but let me take a gang the markets will call the shots and when they do those politicians who hid under the rug out of cowardice from grover norquist or the a.a.r.p. will be the ones who pay a dear price sales thrown out on their camp while we hope they politicians will pay for their actions really quickly before we go to something a little topical at your friend risk involved i've been reading reports as names getting thrown around for treasury secretary possibly if obama is reelected is that

a job you think you want. i would tell you that my personal side about this dear friend or scrambles who sreng ship i cherish and i love working with him he's the last guy the balance the budget in the not in the united states under bill clinton and to do that he had to work with newt gingrich and dick armey because he always says you're. anyone out let me tell you. this baby. is out there and your question specifically was about what he what did he want the job or treasury secretary to think you take it well that's a great i would say that five years ago if he were offered that he would take it but right now after he and i have observed close up for almost a year talking with legislators and cabinet people he wouldn't step into that morass for anything in the world it would be i think it would be a total embarrassment to him to come into a government system which is totally dysfunctional had it been some smoothness of

back when he was working or when i was working in senate i think you take it right now you just say look since somebody else into that swamp i'm not gone and i just have a clear seconds here but could you pinpoint one thing that's changed that is a limited any ability to compromise that's different from when you were in office. or i think it's just a people run on the basis that they hate washington or they get on the ballot or the they run for office they say i'm going to washington to clean up the mess and then you have eighty two guys in the house that didn't run to limit government the they were to stop government what do you do with people who run to stop government who then deal with grover norquist who said we're going to drown government in the bath tub yeah well let me tell you that every everybody in this country everybody has something that they're getting from a tax supported institution municipal federal state who is kidding who and then these guys around here you know all these sixty five year old guys with the big

signs government out of my wife are so great we'll get rid of medicare first of all sure that will. well leave it there are those final words i can't top you there thanks so much former u.s. senator alan simpson. carry on. all right let's wrap up with a real quick loose change although dimitri kovtun as i don't know if we can follow alan simpson i don't i don't have a choice harsh if you just keep going i don't want to see the rest out of it just keep going or said another hour to go no maze i mean he's going he really says like it is a straight talker i love listening to that side of the line i think we're going to

have to go back and wait a minute later sure i would like to me it was amazing all right real quickly before we go though we're talking about alternative things really changing the financial system the city of bristol in the u.k. is taking matters into its own hands announcing its own currency the difference between this and others i'll get to in a second but first here's what they're calling the bristol pound. yes they have thought about forgeries lots of security on this first of all the shine is a hologram only available to security cleared printers then in this gold foil here they fixed the serial number of each note just quietly cover up the logo and the heat of my thumb. makes them later disappear even so fun what's interesting is that over three hundred fifty firms in bristol have already signed up for it making it a very successful by other standards in terms of challenges to this sterling according to the b.b.c. report i was reading so what do you make of this i'm a big fan of computing currencies we've talked about this before

a lot of now don't realize how important it is and gold money is an example of. the biggest. difficult thing to get around a competing currencies behaver it's so it's important to have them because the same way the competition provides better products in the market the same thing happens with currencies and we used to have computers in the united states but not so much anymore it's everywhere are we know that the u.k. is pretty rebellious when it comes to the euro we'll see how the brits still does and will leave you with that that's all we have time for thank you so much for watching come back tomorrow and in the meantime you can follow me on twitter at lauren mr give us feedback at youtube dot com slash capital account watch as an on hulu thanks so much for watching and have a great night. more

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