he wouldle we'll get kate davidson back on here momentarily. in the meantime we'll go to mike in richmond, virginia. mike, go ahead. you're on the air. caller: good morning. i've been very concerned about the deficit and the debt for a very long time. the reason is that there is a link, although a lot of people don't see it, there's a link between the purchasing power of the dollar and the amount of debt being carried by the federal government. the reason we've seen our purchasing power being eroded as fast as it has is strictly because the federal government doesn't know how to live within its means and it effects the value of dollar as it's been traded on the currency exchanges. really, if we want to see fiscal sanity, we have to do something that absolutely nobody is willing to face up to. host: which is what? caller: which is the fact that we're borrowing 40% of what we spend. in order to get our house in order, spending has to be cut by 40%, really more, across the board. or we will never, ever catch up. i look back at what i've read throu

this is incredible, in the wall street journal today it's an article that you co-wrote with kate davidsonand the headline reads how washington learned to love debt and deficits. here's part of what you wrote. moody's projects within a decade interest payments will consume more than 20% of federal revenue. well above most other developed nations. and exceeding u.s. levels in the 1980s and 1990s when debt worries consumed wall street and washington. alan simpson, retired in wyoming anticipates a reckoning. if you spend more than you earn, you lose your butt. again, this is also -- you write about this. you call it a mini revolution in academia where leading scholars are debating whether we can run these high debt levels and high deficits. >> we talked about this a lot on maria's show. the key factor here is what's going on with u.s. borrowing costs. 10 year treasury yields are now near 2%. this defies every prediction that every economic model has. when borrowing -- when government debt soars like this, the models say that interest costs should increase and that corporate borrowing should b

in the wall street journal, kate davidson joining us on the phone. we are talking about your story how washington learned to love , debts and deficits. tell us, first of all, this picture, one of the pictures that accompanies the story, of vice president al gore, president bill clinton in 1999, and zero federal budget deficit. why is that -- tell us why that's important to this story as a starting point. reporter: sure. thanks. so that was a really interesting moment in the u.s. economy. it had been at that point 30 years, 30 or 40 years, 30 years since there had been a surplus in the country. and there were a number of reasons why that happens. president clinton had worked with republicans and democrats in congress, there was a big bipartisan effort to bring deficits under control. host: you and john both right in this piece that the less concerned right now about budget deficits and debt is on both sides of the political aisle. right.r: that's what we've seen is in the past several years there have been agreements among, on the one hand republicans