comments and story of feedback meghan underscore lopez for now have a great night. download to keep up with creation so choose your life stream quality and enjoy your favorite . if you're away from your television on the phone with just awesome but not with your mobile device you can watch your t.v. anytime anywhere. good afternoon and welcome to prime interest i'm parian boring broadcasting out of washington d.c. and here's the prime stories for today. the fed is getting it wrong that's the charge the leveled by john hilson wrath of the wall street journal he korea

correctly states that the fed has overestimated how fast the economy would grow and every year since the financial crisis the implication is that the fed might not wind down q.e. estimates thought and that's not the only indictment from the deaf you jay they surveyed surveyed forty economist on why wong term interest rates recently spiked twenty six of them said as chairman bernanke and cohen is tapering to og the survey also found that recent hands of scaling down at the eighty five billion dollars per month q.e. program has kept a few market participants the average survey grade for communication on a scale of one to one hundred sixty two nearly half a by most academic standards and the latest housing data released this morning by the national association of home builders was the strongest print sense two thousand and two and the first time it's been positive it says two thousand and six

that's when the last housing bubble was in a bowl effect the bottom line home prices are getting more expensive. and so are mortgages thanks to rising interest rates in this wednesday when the fed attempts to reconcile all of that. and here is what your prime interest. austerity oftentimes has a negative connotation and scaring many about underfunded government programs and calls for higher taxes we are starting to see harsh debate over bloated government budgets across the debt running countries including the u.s.

and europe i spoke earlier with dan mitchell from the cato institute who embraces austerity and doesn't think we should be afraid of it i first asked him what forms does austerity common. there's a big debate because austerity means different things to different people to the i.m.f. and some of the european countries austerity is simply a buzzword for higher taxes oh we have to deal with our deficits and debt so let's raise taxes because of course none of those politicians want to control their budgets on the other hand you have these keynesians out there the paul types who say austerity is bad and they think you stimulate an economy by having even more spending even though of course countries like greece and spain italy got the fiscal crisis because they were spending too much already so this debate to me is like the iran iraq war i want both sides to lose because i want lower spending and lower taxes so i don't want to choose to keynesians who want bigger government and i don't want to choose the i.m.f.

who simply wants higher taxes and senator patty murray a she said that our he said our she said that the case for. stary and time of economic weakness is simply wrong and then the i.m.f. further stated that immediate spending cuts would likely slow the economy you know can we just talk about what is the difference between short term and long term effects on the economy as it seems like some of these people are taking into effect or consequence is that keynesian economic theory is very much fixated on what's happening in the economy in the short run and they think that the government by spending money or to be fair sometimes they say by cutting taxes but the whole thing is they want the government somehow to put money in people's pockets so that those people who then go out and spend the money but what they conveniently overlook is where does the government get the money in the first place if it's going to send everybody a check for five hundred dollars obviously it has to borrow that money from the private sector so anything that they came the answer putting in the economy's left pocket they first have to take out of the economy's right pocket so that's the

short run problem with keynesian economics the long run problem is when do they actually impose the fiscal discipline themselves thought that the government should run deficits when the economy is weak but then run surpluses when the economy is strong so in theory you could be a small government keynesian in reality though keynesianism simply tells politicians that their advice is a virtue you like overspending well here's a theory that tells you that you're doing the right thing and that's why whenever we look at so-called keynesian stimulus throughout history the politicians love the part about spending more money but they never get around to the part about being frugal and restraining the growth of spending when times are good which is why of course all these countries all around the world are getting into very deep trouble begins they never get to the long run. and it seems as though that the i.m.f. is backing up its support for austerity i mean why is that significant. and why it

. and what examples have they shown the international monetary fund in theory is supposed. to be the cop who monitors everybody's finances and make sure that they don't get out of whack somehow and one countries wind up getting into trouble it's the i.m.f. that has to come in and write a check figuratively speaking to put them back on the straight and narrow but if the i.m.f. is in effect bailing countries out and does want to make sure they get their finances in good shape now in my mind they do that the wrong way because they say ok go ahead raise taxes i think the real problem is that these countries are spending too much and the deficits and debt are just a symptom the i.m.f. thinks the deficits and debt are the problem i think they have symptom and disease backwards but the point is that at least they sort of understand in the long run two plus two has to equal four. and unfortunately in recent months the i.m.f. has now backed away from that position and what that does is it sends

a signal to some of these profit governments around the world hey maybe we can still get i.m.f. money or european central bank money or european commission money we can continue to spend so it's like you're bailing out your friend but you're telling your friend you can't go out drinking every night and all this and you tell your friend ok i'm going to continue to bail you out but you can go out drinking five nights of the week that doesn't make sense and so i think what the i.m.f. is doing is a mistake not that i think they were on the right side in the first place ok. where are most of the european countries what are they adapting as their austerity measures i mean we've talked about tax high reducing government spending it's a combination of both that there is there one down strategy that we're seeing in europe there are some what thirty something countries in europe we're seeing thirty different examples but if you were to sort of put them into broad categories most countries in europe all during the first decade of the century they were increasing spending they were increasing spending before the financial crisis hit just because

they thought they had plenty of money to spend and then once the financial crisis head then they said ok we have to be good keynesian so they increased government spending on that basis but then the financial crisis morphed into a fiscal crisis meaning that investors no longer trusted the greek government the italian government the spanish were not going to lend the money because we don't trust that they can pay us back and so as a result with initially some help from the i.m.f. these countries start raising taxes for dry think was a mistake but they also slow down the growth of government spending so that describes a lot of southern europe the baltic countries a stonie a lithuania lot the i think there are the star pupil of the class way back in two thousand and eight they saw themselves getting into trouble and what did they do they cut spending and i don't mean cut spending in the dishonest way they do it in washington oh we increase spending six percent instead of eight percent so that's a two percent cut no and estonia latvia lithuania they spent less in two thousand

and nine that they did in two thousand and eight than again in two thousand and ten they cut spending and now these countries are growing again they did the right thing they cut spending yeah they had a few tax increases but very small so i think the baltic countries are my success story of course the real success story is switzerland because they had this thing called the debt break which was really a spending cap and they never got the problem the first place where we have a graphic to get from your blog but it was also from your stats and it shows that the pair eggs. they have not addressed spending cuts can you just address what makes up the bulk of the budgets of these countries who are completely debt ridden . the problem the pigs of course portugal italy ireland greece and spain the pigs they got in trouble because government spending rose very rapidly during the last decade and then they hit the fiscal crisis and they have actually slowed spending down compared to how fast they were increasing spending and greece has actually cut

spending over the last couple of years and of course they also raise taxes hand-over fist and that sort of their private economy because it kept getting hit by taxes it's very hard for them to grow even though they finally have begun to control government spending but the real problem in the pegs and also it's the exact same problem in northern europe is the size of government you ask what are they spending money on the overwhelming share of the budgets in european countries and also i'm afraid to say the united states is what's called transfer and consumption spending and what does that mean it basically means things like entitlements and just do the run of the mill government programs the things that actually contribute to a better functioning economy that the government does rule of law property rights and honest court system physical and human capital highways and education if it's done correctly can be productive for an economy so i'm not making some sort of anarchist case that all government spending is bad the problem is in europe this

much of their spending is for the things that are clearly unproductive and this much of their spending is for things that could be productive and that's what europe has to address is all that transfer and consumption spending the welfare state to put it simply over evenings back to the united states there's a lot of debate around bass. saying it's. a committee the senate budget committee hearing or senator whitehouse he challenge the testimony of a heritage employee about where he had came to on measures we have a video from that. doctor i'm concerned that your testimony this committee has been meretricious. and i want an explanation i want you to sit down and do it in writing so that we have plenty of time that there is no question about any short cut that you might have taken or there wasn't time for this discussion and i want you to explain how this all we see that shows they're not the majority by o.e.c.d.

terms over and over again of their austerity plan with spending cuts and senator whitehouse they have using misleading data. the heritage employee he used once at a set of. data that showed projections while the senator was looking at a different set of data but you stated that they didn't even address the underlying are you mad and so what is the most important argument they should be addressing if they just figure pointing at each other well i suppose first of all we have to give senator whitehouse credit for using a fancy word like meretricious that's a very very guess rhode island way of accusing someone of lying but i think heritage was right on this and senator whitehouse was wrong why biggest senator whitehouse was using o.e.c.d. data that was based on what politicians said they were going to do in the future whereas the heritage economist was looking at the actual we see data from two thousand and seven through two thousand and thirteen so i think on that little

fight we saw up on capitol hill yes there were two different sets of data but if you have a choice hard numbers based on real actual what's taken place versus what politicians say they're going to do between now and two thousand and fifteen which is what the senator was relying on well maybe the o.e.c.d. countries will do what they said in this survey that the o.e.c.d. did but i don't trust that i mean does anybody out there in the audience trust the politicians are going to control spending in the future the way they always say it's like you know what was that famous line with the oh good lord make me chaste but not yet that's what these politicians are like they always promise fiscal discipline in the future but in the present they love to spend money and it was the actual real world historical data that the heritage foundation guy was using and senator whitehouse was then looking at this a future projection. and that was senior fellow at the cato institute dan mitchell and stay tuned to find out who was named as the best senator by economic policy

journal dot com and you can't vote then bob inglis and i will head to the daily duel it's revealed the latest beta projects from google that delivers the internet to the away end of the board of the rain be raped. i would rather as questions for people in positions of power instead of speak on their behalf and that's why you can find my show larry king now right here on r.g.p. question more. let

me let me or someone will let me ask you a question. here on this network it's we're right in the bay we have our nights out. to give you the straight to the space thing there again here it is the story where the united states talked about the surveillance we. told.

and the best senator and the united states. and according to economic policy journal dot com it is paul strauss as the nine of voting united states senator from the district of columbia he can do no harm so who is paul strauss he is the u.s. shadow senator from d.c. he does not have voting rights in congress he does not have a coveted office in one of the three thousand in office bill. no word if they serve on any committees instead he spends his time lobbying congress to admit the district to the union as the fifty first state and here she refute these claims that he is the best senator because he can't vote the man himself shadow senator strauss. now mr strauss you said that you were flattered to be named the best

senator in the united states even if it was kind of a joke by you p.j. what was your reaction when you found out well as excited as i was to find an economist with a sense of humor i had to demand an immediate. very very hard to find so it was i did get a kick out of it especially because when i clicked on the link i had no idea that i was actually even being considered let alone going to win such a coveted title what a wonderful war and and we also saw that you were not the best senator but colette said you were the most handsome. coat what do you is that your blogger profile name it is not my blogger profile name you know what are the couple rules you live by you try to wear seatbelts you don't salt and if you don't read internet comments and the section you're going to live a longer happier life so i haven't really focused on that i think that's probably as wacky a title as being the best senator based on my voting record but in this business

when politicians are subject to so many attacks and barbs you take the love where you can find it so you know i totally understand that we get some interesting comments on our pages as well but we welcome them because we enjoy the fear of viewer feedback but you also said that if you were a voting member that would be unlikely that you p.j. would give you this award you'd be willing to give all that up if the for the district could have full federal representation so as d.c. saddo senator tell me a little bit about what you've done to get statehood for d.c. well working hard to get statehood for the district of columbia it's really a moral outraged. it over six hundred thousand american citizens are denied the equal rights that their fellow citizens washington d.c. residents are serving in every branch of the military they're working serving their country in various civilian capacities we contribute we pay full federal taxes over four billion dollars pumped into our national economy and we are denied the basic

rights of american citizens so i spend my days trying to change that it's in our age it's unjust it's really un-american and we look forward to the day when we can get not extra rights not special rights but equal rights for a fellow citizens it's quite interesting that in the heartbeat of the country the people here don't even have representation and in the senate and in congress but on the other side the district of columbia their counsel has been just riddled with corruption unfortunately you know former council member michael brown he just pled guilty for bribery and you know admitted to setting tens and thousands of dollars in bribes he's now possibly facing years in prison and this is just one example we three of the thirteen council members are currently under investigation and i mean how has the district leadership proven that they're ready to be have the responsibility to come along being and say well public corruption is a horrible thing when it happens when an elected official betrays the public trust

they should face the most severe consequences michael brown but the district of columbia down as so many elected leaders from around the country have i mean in the state of illinois for example they talk about building a governor's wing in the penitentiary because of all of the issues that have affected that state but nobody ever talks about taking away the state of illinois right to be represented in the union. there's been an instance where an entire elected legislature from in a spot in california was indicted and that wasn't for taking bribes that was for acts committed in the official course of their duties nobody's talking. disenfranchising the state of california or any of those communities so it's sad when it happens at the same time there is a system to hold these people accountable and the district of columbia shouldn't be treated any differently i think on the whole we do a good job of running the city and i think we have a lot to contribute as americans right and that's a very good point d.c.

haven't necessarily had the best track record when it comes to managing their finances either less than a decade ago the district was in so much data they asked congress to help out which was to be congressionally appointed financial control board which took almost all the power away from the district by chair and put it in congress what does the district budget look like today and just because the city haven't necessarily always been in the best place financially should we deny the district statehood for that well the first answer is no we shouldn't but one of the reasons why the district has financial challenges is the structural imbalances that come from not being a state we can't tax revenue it at source like every other state in the union we did have a control board it was a lot like the control board that was based in new york in the early days of new york's financial crisis there's a board right now in detroit that is handling the affairs of that city so again financial control boards are new to the district of columbia or any other place but

i would tell you that when i first got. elected in one thousand nine hundred seven we had a federal government under the leadership of president clinton that had a huge budget surplus two wars and disastrous economic policies later we are basically broke as a nation the district of columbia on the other hand is in some of the best financial shape compared to just about any other state the union we have huge budget surpluses we have a robust economic growth despite some of the most challenging economic times so in actuality while cities and states have had various degrees of financial management none of them have ever impacted adversely their right to participate in a democratic society if you were going to judge the district of columbia by its economic barometer it's been a very very positive trend and that's despite having a very very arcane budget process where congress actually has to take not just the federally paid tax dollars but our locally raised money and can overrule any time

the wishes of district of columbia left to the leaders it makes budgeting difficult it makes forecasting economic policy difficult and i think our district leaders despite all the challenges have done a very good job so much for joining us this is the d.c.'s status and our pasta. and it is time for the day when. you feeling ontological existential i don't even know that we're. getting hot. it's been a day of hot air here of prime interest but let's not jump the gun let's talk about goldman sachs all right well it does too big to fail this all only five years since

the financial crisis began goldman sachs. says yes it does and that's according to author simon johnson's read of the latest squid report on bond market pricing don't worry we won't go into to report that's what i said vampire squid right vampire squid right. will there's no reason to mention question i think yes it does ok all of the big banks and their lawyers davis polk and some other groups are pushing back against this idea that too big to fail enables the banks to make more money but they're not even acknowledging that too big to fail exist because and that's ridiculous right because a lot of these firms have been named systemically important financial institutions subsidies and goldman itself in this report finally acknowledges that too big to fail exists so well i've asked david stockman he says it's all made up well you know david stockman says a lot of things a lot of with with which i agree but i would say on the goldman front it's pretty interesting because in two thousand and eight they weren't even the banks they

converted to a bank holding company and they were broker right they were they were broker and they converted to a bank holding company at the end of the year and that was to be able to take advantage of said liquidity and they even got to change their fiscal year from i think it was in november to december and they skip reporting an entire financial my entire monday to senate report so anything having during that time a lot of shady stuff i don't know we can only speculate so maybe it was just you know something something crags who knows well moving on is called project alumina and it's a little loony a division of google titled google x. project which is google's high risk research arm has started this project project alone about two years ago now what they're doing is they're launching solar powered balloons into the stratosphere sixty thousand feet above sea level to bring internet to many of the under internet connected population what is this kind of

remind us of maybe it's like. bring in the under benton the unbanked into the financial system which is something that we've been talking about recently and most of last week we had a profile on the center for financial services information and these are guys that are funded by shore bank the ford foundation and they're trying to be bring this into a cashless society. and that is what's so bad about that well i mean in a casual society everything can be tracked it's not that cash is bad per se but it just gives the government heavy handed ability approach to you know monitoring our payments and what's going on that's a very green of you you still want all the paper trail you know it's not in terms of a paper trail all i'm saying is that sometimes using cash isn't necessarily a bad thing well we'll see how it all unfolds so. thank you so much for joining us today if you want to leave some comments on facebook we're at facebook dot com slash prime interest you can follow bob on twitter at english p.-i and you can

follow me at perry and r.t. bob thanks for the one i do. and it was a day full of hot air at prime interest but not from us we promise first the fed minders were in full damage control mode blowing smoke through that w. as they apparently when you gave at the face of the most transparent fed chairman history do you think is a bearded visit and up up and away her housing and it's the norm housing bubble to point out but this time is different the fed promising. never mind the talking heads of the i.m.f. austerity work at least for those who and jose and. carlos' of what you think of

congress shadow senator strauss isn't going to filibuster anything any time soon finally as the loons of the known hot air varieties that are carrying the internet to the land out mutiny even farmers they get their pay for god come on thanks for watching come back tomorrow from everyone at prime interest i'm perry and boring have a great night. more

news today violence is once again flared up. these are the images the world has been seeing from the streets of canada. showing corporations to rule the day.

jesse ventura the outspoken paul the governor doesn't hold back we are fascist already we are the fascist states of america mussolini and be proud of us today on the political parties they are identical to a street gang only i like to say they were brooks brothers suits conspiracy theories the real defining moment of the country was when the murder of john kennedy because if you can kill the president and get away with it what can't you do and why he never flies won't fly larry because on tired of being treated like a criminal at the airport next on larry king now.