g.d.p. numbers are cooked they're fake you can't get growth by increasing the debt you could fake it for decades for every dollar and debt they created a dollar g.d.p. after world war two that has been going downhill ever since then it takes six seven eight dollars of debt to create one dollars of g.d.p. but at some point it becomes like blood transfusions you could say technically the patient has a pulse but that's completely due to the transfusion of the blood you're not really alive there on the table there's blood circulating but the patient is in fact dead but here's the i.m.f. warning america that they've got to get their debt situation in under control and remember only a few years ago two thousand and six two thousand and seven the i.m.f. was bankrupt itself and they were out of business so. stop right there let's tigress a bit about the sign left situation they are completely bankrupt that's why they go into a country like greece they take greece's assets they use that as cholestero

it was a bit you put the wages up not to actually get them much larger a share of g.d.p. because you expecting inflation to come along and eroded but by running the by the inflation eroding the value of the dead you will drive down the bankers share and that's the section that should be reduced why do people who rely on a wages for a sub subsistence don't seem to be arguing this case and then america for example is a wage earner is out there demanding higher wages because we don't see a complex systems that cause the real economic behavior and we tend to think about things in a household fashion and this is actually when the a classical economics has been marvelously useful to people who want to screw up the economy actually really wants to do that but that's the impact of the theory because what it tries to get you to believe is that what applause for you as an individual can be extrapolated to the social level so if you're in a household and you're running a deficit you've got to cut back the spending which made the kids can't buy the nintendo games anymore you know tha

but g.d.p. is another one of these economic statistics the point out in your work debunking economics one and the sequel coming out i believe this fall economics debunking economics part two which is the available soon but professor if i came to you in your class i said well would it be an interesting idea if let's say cops and firemen and teachers negotiated wage increases not tied to g.d.p. growth but tied to money supply growth. that's an interesting one i hadn't thought of what i got to i got a grade on this that we get a grade on that's a good idea that would this is so that would stop me in my tracks in my class you say because the money supply growth is how bankers pay themselves get paid by the how much money they inject into the system of they get a fee based on that the mean i can see here is what i actually back far no that's why actually what happened back in one chain in england which caused the depression in the beginning of the twentieth not that we're not in twenty's there was th

and as a share of g.d.p. so when we use the words draconian or deep, i think about, for example, the 2011 budget which you agreed to recently, that did reduce spending in terms of budget authority from what was originally asked for, but the outlays are only down by less than $1 billion. less than $1 billion in 2011 compared to 2010. so the focus should be on how do you get a game changer, get enough spending down so that it's credible? the problem isn't trying to find ways to spend more, the problem is trying to find ways to spend less. the more that you can go in that direction, the more you will demonstrate to the country that we can get our house in order and that will be definitely be beneficial to people who are worried about the debt, who are worried about inflation, who are worried about higher interest rates down the road. so i think i would emphasize so much just taking the efforts now to get started because if you don't, if you just promise us the future, it will not be viewed as credible and won't

understating its g.d.p. growth for trade secret service so the the idea that your panel has been in a recession or depression for the last decade or two is actually not true and b it's a misconception that the japanese have either allowed or promoted because it allows them to be. continued to be protectionist with regard to trade policies is that yourself. basically the japanese top europe bureaucracy. an agenda to keep markets closed it knows that if. the americans think that the japanese economy is feeling washington will be less likely to press for looking over for instance the car market here and so on. but i'd like to bring you back to answer the figures on for instance electricity growth in the last twenty years and japan between zero and two thousand and seven japan's electricity generation growth was forty two percent versus to thirty eight percent in the united states and if you adjust for population per capita the growth in japan was thirty seven percent versus fourteen percent in the united states

is tied to consumption you know seventy percent of the g.d.p.is consumption people wave their wealth by how much they consume they never take into consideration that one hundred percent or i should say five hundred percent of their consumption is driven by debt accumulation it's a one dollar of debt to generate one dollar of g.d.p. thirty years ago then it got to six or seven dollars of debt to generate one dollar g.d.p. just a few years ago and then it hit the debt saturation point and we've been having this colossal total global screw up ever since and in response the federal reserve has simply injected more fear of currency or debt into the system and that's causing ultimately the final solution people are just dying on the reservations and ghettos created by the federal reserve to get rid of this problem now the final two have lines. here you go to our group see here everybody says everything is going to be fine and china boy regrets selling his kidney to buy an i pad a seventeen year old student in providence sold one of his kidneys for twe

thirty years ago then it got to six or seven dollars a day to generate one dollar g.d.p. just a few years ago and then it hit the debt saturation point and we've been having this colossal total global screw up ever since and in response the federal reserve has simply injected more fear of currency or debt into the system and that's causing ultimately the final solution but people are just dying on the reservations and ghettos created by the federal reserve to get rid of this problem now the final two headlines. here go to our group see here everybody says everything is going to be fine and china boy regrets selling his kidney to buy i pad i seventeen year old student in province sold one of his kidneys for twenty thousand yuan which is about three thousand dollars only to buy an i pad two now with his health getting worse the boy is feeling regret but it is too late. develop a dialysis app for the i pad to help the poor kid he sounds crazy right to sell his kidney for three thousand dollars to buy an i pad but why does he need to sell his kidney because somebody else prob

is meaningless what we do g.d.p. goes down the track goes up ok that's a measure of what you can do and you can't buy perfect security back in the eisenhower administration we spent my percentage of g.d.p. on defense but watch your tax rate the highest tax rate was ninety percent you want to go back to that ok you know and if you want to spend more on that you're going to have to we're taxed more but you know a lot of folks don't want to you know they say if you increase taxes that's going to slow down the economic economic recovery ok if you can look at what your competitors do you know during the cold war we spent you know eight or nine percent of soviet us up to forty percent of their g.d.p. and that's what led to they were doing they overspent on defense if you put in constant dollars where we're spending right now it's higher than on average in the cold war and as your you know lead in show you know we account for almost half of the world's military expenditures and so i mean this is what you've got to look at w

finds that a tax base consolidation would reduce g.d.p.y around 1.6% three years following implementation, they find that the negative effects of spending base consolidation would be insignificant. there's little to dissuade us from pursuing consolidation today. moreover, them find that consolidation focused on transfer cuts could produce positive, near-term growth effects, although those are statistically insignificant. the latter points is interesting, since the author studied entitlements. one might expect these would have a large effect on consumption behavior. the fact that expectational effects dominate even when entitlements are cut immediately suggest that spending has has a profoundly sentiment on business and consumer confidence. this would also suggest the policy opportunity. given the mass of imbalances that exist today, it's like that will consumers have very little faith that current programs will remain in place throughout their lifetime. cuts to entitlement that is phase in gradually over time will likely have little impact

our debt is about ninety percent of g.d.p. japan's of course two hundred eighty percent of g.d.p. we were one hundred twenty six percent of g.d.p. after world war two we get out of that in five years how do we get out of that good old fashioned republican to eisenhower poured money into a high national highway system into employment into the g.i. bill giving people free college giving people free government subsidized home loans and boom we grew our way out of that economy we want that you want to play these risky games i mean there's the risk of here's the senators that are working in turn called black swans when we don't know these type of financial crises arise and if you want to get up to that border thinking that you know we always want head around cut and then you have another crisis and we're you know we're we're greece or we're ireland read michael lewis's recent accounts from greece and ireland and you travel he's probably the best financial probably best nonfiction writer there is out there it's scary we should be taking proactive steps to reduce our debt now thank god w

we've also propped up a pool a corrupt political regime and turned their two billion dollar a year g.d.p. economy into a massive fourteen billion dollar a year war bubble it's about to burst. so when should they think it's now or later here offer his take on the issue as well as the big picture of what our military involvement has meant to al qaeda and our nation's perpetual war on terror is here with porter vest a journalist and policy analyst at u.s. foreign and military policy as well as the author of four books including perils of dominance in balance of power and the road to war in vietnam gareth welcome thanks tom great to have you with us based on this new senate report if we leave afghanistan's economy will crash and if we stay we're screwed but we do what i think we have to start phasing it out that's the only way that you can prepare the afghan people in their economy for the crash that you're talking about as it is what this aid is doing is essentially corrupting the entire society and there's no question about that this is been well reported i should say it's been reported we

memory here as much as anything else but my recollection is before we invaded afghanistan the g.d.p. of the country was around two billion dollars a year sounds about right ok. my recollection is that the first year that george bush was president like a couple of months into his presidency there was a major problem with afghan opium getting as heroin hitting the streets in europe and the united states price was really low action was going up in russia as were all these countries and george bush went to mullah omar and said we'll give you forty million dollars my recollection would be forty million dollars you pass it along to the opium farmers and ask them are in their fields moammar took the money actually did distribute most of it to the opium farmers and if you look at the spike of opium production from afghanistan there's this huge drop bush's plan actually worked this little tiny bit forty million dollars point zero four of one billion was enough to shut down the opium and still people had a living that's night or so as well so if that's the case if that small amount of money gi

currently federal spending accounts for about thirty eight percent of g.d.p. so we're talking drastic cuts and finally here's the kicker publicans want to pass a balanced budget amendment that handcuffs our government from spending in the future and. acquires a supermajority for any new tax increases a move that was of effectively in trying the bush tax cuts a new american law indefinitely as the letter reads the fast approaching debt ceiling vote gives us an opportunity to make a bold statement to the american people but what direction we want our country to go seems the direction republicans want to take us toward is the libertarian paradise of somalia so why is it that as the clock nears midnight to reach a deal on the debt limit republicans here are coming out with a new list of demands that sabotage any hopes of bipartisan negotiations could it be that they don't want the debt ceiling raised but they want the economy to tank to make president obama look bad in next year's elections after all isn't that exactly what senate minority leader mitch mcconnell s

germany spent forty six billion dollars on defense and twenty ten just one point four percent of its g.d.p. meanwhile here in the u.s. despite the stagnating economy we continue to beat the rest of the globe combined when it comes to military spending shelling out a staggering six hundred eighty seven billion bucks last year nearly five percent of our g.d.p. now germany managed. find some way to thrive and survive despite high taxes lots of social welfare benefits and high wages now these are things but here in the us many folks would scorn us business killers you know those lazy europeans they work less than we do and and get paid more than we do and have the social safety nets i mean a lot of politicians here in the us accuse that of socialism they say that it would destroy our economy they say that americans can't learn from their economies but we ask whether in fact germany has some lessons to offer and that's in fact the question i posed to the big picture tom hartman if you had to say. well with regard to trade germany has some very very colorful carefully calibrated trade policies p

shelling out a staggering six hundred eighty seven billion bucks last year nearly five percent of our g.d.p. now germany managed to find some way to thrive and survive despite high taxes lots of social welfare benefits and high wages now these are things that here in the u.s. many folks would scorn of business killers you know those lazy europeans they work less than we do and and get paid more than than we do and have the social safety nets i mean a lot of politicians here in the u.s. accused of socialism they say that it would destroy our economy they say that americans can't learn from their economies but we ask whether in fact germany has some lessons to offer that's in fact a question that i posed to the big picture of tom hartman first he had to say. well we've got to trade germany has some very very colorful carefully calibrated trade policies particularly if you're a taxation that effectively work like tariffs so they're protecting their trade economy but with regard to the short workweek in the unemployment which i think is you know to the more the point of what you're talking abou

our nation's current debt, the g.d.p. ratio, is 95%. countries with debt of 90% above g.d.p. have countries 1% below normal. our debt is a lead weight around the neck of the economy. but in the current negotiations over the debt limit, the administration insists that it is republicans who by refusing to pass an increase of the debt limit that does not include meaningful efforts to address our fiscal situation are holding back the economic recovery and undercutting the stock and bond markets. this has things exactly backward. the markets understand that our long-term deficit projections are moving toward a full-blown debt crisis. the markets understand that we are currently on the glide path to greece. and the markets would respond like gangbusters to spending cuts, spending caps and a balanced budget amendment that brings our long-term fiscal problems under control. i am more convinced than ever that a balanced budget amendment to the constitution is essential if we are to right our fiscal ship. this is not the first time that we've been down this road, but the stakes could n

back in the eighty's or in the rate of inspiration or five percent of g.d.p. because the interest rates are so much higher shouldn't we be looking to go ahead. i will say we can afford this right now we can afford to borrow more money because the interest rates are in the basement and we ought to we have to have we have to be having a huge infrastructure bill. in order to put people to work in order to use the opportunity to modernize our infrastructure roads highways bridges broadband penetration so that our economy will be more competitive in the future we ought to be giving money to the states and telling them don't cut your budgets and don't increase taxes because every time a state cuts its budget or increases taxes that takes money out of the economy throws people out of work. and we have to be preventing them from doing that we need a huge i hate to use this terrible word a huge stimulus. approach such as we had two years ago the problem with that was that it was too small and that it's ending it did save about three million jobs and it worked in the th

he's expects g.d.p. to average 3.5%. >> i would have liked to see something much more robust and the reason is because on a 3.5% type growth rate, we're still going to be seeing an unemployment rate that probably going to be above 8% at the end of 2012. so, 3.5% is just not fast enough. >> reporter: experts say another problem for the recovery is that americans are depressed. consumer confidence is still low. and, when that's weak, people don't spend or invest. suzanne pratt, "nightly business report," new york. >> tom: here are the stories in tonight's n.b.r. newswheel: wall street ends a rough week in the red: the dow fell 115 points, the nasdaq was off 33 and the s&p 500 lost 15. as for trading volume, it was the heaviest of the week. russell investments rebalanced its benchmark indicies leading to an increase in trading as fund managers moved to match the new weightings. 1.7 billion shares moved on the big board over three billion on the nasdaq. for the week, the dow was up in just two sessions. but

and obama's budget would have us spend about 24.3% of g.d.p. and so if you look at what we need -- where we need to focus on, i would say to my colleague, it is clearly in the area of getting spend and debt under control and dealing with that issue as opposed to the issue of revenues. so i look forward to working with him on these issues, and i hope that we can get some policies put in place that will grow the economy and get people in this country back to woncht. the presiding officer: the senator's time has expired. mr. isakson: mr. president? the presiding officer: the senior senator from georgia is recognized. mr. isakson: how much time remains? the presiding officer: two and a half minutes. mr. isakson: could i ask unanimous consent that that be extend by three minutes. the presiding officer: without objection, so ordered. mr. isakson: thank you, mr. president. i come to the floor to talk about the number-one issue in the united states of america, and that's jobs. also to talk about an admonition i got from my father. he said, always judge

if you consider over 10% of g.d.p. from one federal program alone, that's roughly twice as much as any federal program to this point has ever absorbed. it would be over half relative to g.d.p., over half the size of the entire federal government, relative to the economy, as recently as 2008. so to have over half of our historic norms in terms of the federal size of government to one program would be an unprecedented strain. >> my comment on this is long before those numbers would be realized, this nation is going to have to address its deficit and debt problem. in my view medicare will be one contributor to a solution and so those numbers are horrific. long before we face them, we are going to have to make some much more fundamental changes in our revenues and exmendy tures -- expenditures across the board. >> the gentleman's time has expired. the gentleman from new jersey, mr. pascrell, is recognized. >> thank you, mr. chairman. how are you today? what is a logical, we learn in logic 101, may not be true. it's our pre

of overall not five percent of g.d.p. . greek government is also working with the european commission with the european central bank and we did i.m.f. on a new program for the upcoming treaty is so stunning fiscal consolidation and to implement all the targets set forward a year ago so we are correcting the slippage and we are working on a new program in greece we also working. some form of private sector involvement creating no default or no credit event and we all working additional european financial means for greece so we are working on all these this is not an easy exercise let's ask india pos. we would have a positive outcome and we would reach agreement by and of the nuns if you ask me if your comfort of my own for peace yes i'm confident because you go work on it and of course you mentions something sions that's completely normal you such a delicate and difficult exercise but the outcome will be positive by the end of the. book just wanted to add two words. slowish our you're in common as to be as successful as poss

and i g a g.d.p. to thirty nine percent g.d.p. which is a huge increase in one year time it is very harsh for the greek is very difficult for the greeks but it is unavoidable and i think that's a tax on the banks which would make the burden the business a bit later for the greeks a tax on the banks in europe would be an important step a financial transaction tax with which we could we could do something for the greeks and other countries in difficulties. well there are still ahead this hour hostage to conflict the number of civilian casualties used to rise of libya some believe the american government is now stuck in the conflict and. drop in the country. and wonder how the missing russian writer use of instigating the massive riots you hear from jail. tens of thousands of candles here in the former soviet republics today to commemorate the twenty seven million people who died fighting against hitler's army on this day seventy years ago not some troops invaded the soviet union but at least in the great wall of bloodiest in the reg

are right now it went down almost to ten percent of the g.d.p. keep it in let's say hyperinflation which then. was taking on enormous proportions. change softening to more. real consumption by the russian. during a very short historical period in russia instituted reforms that very few can compare in terms of the scale from the governor prices we came to a standard market pricing mechanism from strict control with a currency.

and i g a g.d.p. to thirty nine percent g.d.p. which is a huge increase in one year time it is very harsh for the greek it is very difficult for the greeks but it is unavoidable and i think that's a tax on the banks which would make the burden the business a bit lighter for the greeks a tax on the banks in europe would be an important step a financial transaction tax with which we could we could do something for the greeks and other countries in difficulties. the u.s. is tightening financial sanctions on the libyan government as some members of congress call for a one year extension of america's military role in the country meanwhile the intervention has been hit by continuing criticism of the number of civilian deaths historian lawrence davidson says the u.s. and nato have made themselves hostages to conflict. with this cause into question the original justification for american intervention which was humanitarian my own personal opinion is that that was. just the media story for our domestic consumption you can either enter bein

the population of united states as they as they modernize it in advance what it would have greater g.d.p. growth that's just a natural consequence of a country rising of course and china and india they're adopting free market principles even though it's not nearly what it should be and that's why their economies have grown over the last thirty years while sub-saharan africa has not why is it that we're no longer making things about the thing as president obama has talked about and he's right i mean we have to get serious about the fact that we don't make a lot of things in this country and we don't make enough of the things that clearly these emerging markets want and need so if if we're going to actually deal with these trade gaps make a couple things one we've got three trade agreements languishing on the hill thanks to our republican friends have decided they're going to block it but in addition to that we've got any of a lot. again this is a long term prospect not a short term prospect we've got to really focus on in terms of manufacturing are we making the things that people in othe

and right now it went down almost to ten percent of the g.d.p. keep it and that's a hyperinflation which then. was taking on enormous proportions that change it's often promote really. real consumption by the russians. during its likely short historical period when russia instituted reforms that very few can compare in terms of the scale from the governor crisis we came to. market pricing mechanism from strict control of a currency market to one of the most liberal models of its regulation in the world from. a closed country to foreign capital to three hundred billion you can believe it foreign investment. just we were creating our tax system from scratch and i shall remind us that in russia right now that is not a cause and individual income taxes are first of incentivizing long term investment starting from the ca we freed from taxation and the against the state issues one can hear a lot of things that is always pleasant to one about things that have been done but the most important thing is that consistently and in this is stemming way as i co