hassett? >> and present values, maybe we can estimate all the things that we are short, something like 100 trillion. if businesses expect to have to pay their normal share of tax increases to cover that $100 billion? the we're talking a tax liability bigger than $10 trillion. that is closing in on the market cap for the u.s. firms. so the scale of the tax shortfall is humongous. it is really a larger relative to the scale of u.s. corporations. maybe they do not think it will record a cut the whole thing with tax increases, but if they think that even half would be covered with that, and that is a significant liability, implicit liability on their books. you could set of investment booms today. so the scale of the problem is such that there is and expectation of fact they could be large if it were credible, accompanied by new rules that made people believe that the spending rules are there to stay. >> which often appeared that people look to the clinton years as the golden years of the economy.

we're joined by robert greenstein and kevin hassett. then portia wu of the national partnership for women and families talks about workplace issues. and after that, a conversation on immigration with roy beck of membersusa -- numbersusa. host: good morning and welcome to "washington journal" the 11th of june. dr. anctil idea was to a reception for survivors of breast cancer. while it is relatively quiet at the white house and capitol hill, the race for the white house had dramatic news yesterday. ghannouchi rich survive as a political candidate after its staff -- can newt gingrich survive as a political candidates after its staff resigned in mass? we would like to know what you think. the numbers are on the screen. you can also e-mail us. and we are on twitter. let's take a look at "usa today" headlines. to give some information about this and shed some light on what is going on behind the scenes, we are joined by. wilson from "national journal." good morning. what have you found out about why his staff members left? guest: he had a roc

hassett. >> thank you. over the past several decades many developed countries have undertaken fiscal adjustments in attempt to reduce debt levels. these countries restructuring set varying degrees of success and failure, both in producing debt and stimulating growth. the economic literature is focused on answering two main questions in this area. what aspects of fiscal consolidations produce lasting reductions in debt and what aspects encourage macroeconomic expansion? the answer to the first question is clear. based on review of the economics literature and analysis of countries, two of my colleagues and i recently found that cugget expenditures is more likely to produce a laughter reduction in debt than increasing revenues. it's also typical that the more aggressively a country cuts expenditures, the more likely it is to successfully reduce debt in the long-term. averaging across a range of methodologies, the consolidation consisted of 53% tax increases and 47% spending cuts. in particular,

kevin hassett, and dr. stone. i no there are others who will be asking questions and making statements. i will be brief. i wanted to first of all make the following assertion. i don't think there is any disagreement on this committee and throughout most of the country about the need to reduce the deficit and have a strategy to do that. i think it is if shared in a bipartisan manner, and we are all of one minds to do that. the questions that we are trying to resolve year is about the timing of that and what policies yield the best results. on these questions i think there is honest disagreement but also significant disagreement. we are having a robust debate about it as we speak and throughout the next couple of weeks and months. today's hearing is part of that debate and is important we have this debate at this time. we have a lot of able economists across the country and several here today who offer their perspective. i want to provide a little bit of context in terms of the way i see this in terms of some of the

host: well, let's get a response from kevin hassett. talking about the idea of using a socialist label. what do you think? guest: thank you for those kind words. i hope my teenage son, who has a different opinion about how i speak is watching right now. [laughter] guest: i agree there are words out there that get abused. socialism is one of them. the expansion of government that's occurred under president obama is something i wouldn't have supported or didn't support. and i opposed it. i think he sort of set us up now that -- to have a big problem that if he fixes it, i will agree with his ideas retrospective. and i know he's not a socialist. i think that poisons the con very -- to do so in a gradual way so that we content have a gradual immediate big recession due government spending. bob maybe doesn't agree with that, but i don't think that makes him a socialist. or i don't know, maybe he used to be. [laughter] guest: i think the problem in washington is people, over time, i kind of have been operating in this game for more than a dec

host: kevin hassett? guest: i agree with bob on this. with the exception of mexican immigrants who are thattistically different from im -- immigrants from around the world. people join our society quickly and the second generation has about the median income and wage. just two generations in. so one of the strengths of america is we can take people from all over the world of all different colors and languages and assimilate them and give them a place where they can succeed. that, going forward, if there's hope for america, i still believe we're the best country on earth at that and that's one of our strong advantages, and we need to leverage it better. so i think a revised immigration policy has to have lots more legal immigration and do a much better job at slowing down illegal immigration. host: let's get to a comment from twitter. monty wants to know:what manufacturing can we bring back or initiate to absorb the army of unemployed? guest: i think that one of the duties of a free market economy is one of the guys like me or bob doesn't

kevin hassett knees this is a lot of interest in the republican side i think the problem is that youhave the leadership on this path of just being negative it want things to be bad i mean and maybe i'm inferring things here but you know that there's a rule that mitch mcconnell came out and said his job is to keep president obama from being reelected right and which is if they can crash the economy that's going to be bad for president obama that's right and that's that's that's really graham bell thank you again for the great work you're doing and promoting your work sharing programs for. thanks for being good on your four for the work throughout this debate on our debt republicans often cite what's happening on the other side of the planet in japan as a warning of what could happen if we don't get our debt under control currently our debt is about ninety five percent of g.d.p. japan's debt on the other hand is about two hundred twenty five percent of g.d.p. far worse than ours and republicans claim that because of their enormous debt japan is suffering from a lost decade of economic

hassett, separate questions.ou talked about a game changer to restore credibility in our financial order. but weir often -- but we're oftentimes told we can't do that, that introducing a fiscal consolidation program would mimic that of the great depression, where spending reductions, they claim, created the recession of 1937 and 1938, and they use that analogy to apply to today. what is your aacceptsment of that technology, and is it important for us to engage in a serious fiscal consolidation program now in order to spur the economy? >> i think it's essential to engage in a consolidation program now, and it will spur the economy since this recovery began, and it's hardly a recovery, growth has been only 2.8%, so the low growth is consistent with this pattern for the last two years since the recovery began. and then as i said before, if you compare that with the last time we had a big recession, the growth is less than half as much, 7% at that point. i think the low growth we have now is because of all this fisca