joining us now, kenneth rogoff, professor of economics at harvard university and co-author of "this time is different: eight centuries of financial folly." hi, ken, nice to you have back. >> thank you. >> susie: all right, so a lot going on with the whole supercommittee announcement of no deal. was's your read on this situation and what does it mean potentially forth u.s. economy? >> well, it certainly shows the continuing paralysis in policy. yeah, it was expected. but it was worse than expected. i mean there might have been something at the last minute. there is really nothing on the horizon that seems like it could happen before the election e september perhaps some short term patches, perhaps the payroll tax, perhaps not. and there's a risk. there's a risk with the u.s. economy very weak that will actually have substantial tightening next year if congress isn't able to extend the payroll tax and some of these other short term fiscal stimulus. >> susie: what about those payroll taxes? a lot of people were counting on the supercommittee to come to some kind of an agreement to extend th

and so, kenneth rogoff at harvard recommends that since some people say well, if we lower mortgage rates, if we bring mortgage to the value of the house, then the people hold the mortgages will lose money. who's going to compensate them? and what is it going to be? will cost us adjusted the settings for the people who told the mortgages instead of writing them down just cut them in to take an ownership position in the house so when the house was ultimately sold to people who issued the mortgage will share in the profit and you get the same practical result. you no longer have a patent on the book and the homeowners got a mortgage that he or she can pay. i said in the book i know this'll work because when i was governor in the late 70s and early 80s and farmers got in trouble, we had hundreds of small state chartered banks who did not want to foreclose on the farmers. they knew they were just having a couple of bad years and they couldn't pay their final sauce and they didn't want to take possession of these farms, so we allowed the banks -- were changed a lot to take an ownership positio

and so kenneth ro rogoff at harvard recommends that since some people say, well, but if we lower the mortgage rates, if we bring the mortgage down to the value of the house, then the people who hold the mortgages will lose money. who's going to compensate 'em? and what's it going to be? rogoff has suggested that the banks are the people who ultimately hold the mortgages. instead of writing them down, just cut them in half by taking an ownership position in the house so that when the house is ultimately sold, the people who issued the mortgage will, or own the mortgage will share in the profit, and you get the same practical result. you no longer have a bad debt on the books, and the homeowner's got a mortgage that he or she can pay. and i said in the book, i know this'll work because in, when i was governor in the late '70s and early '80s and our farmers got in trouble, we had then hundreds of small state-chartered banks who did not want to foreclose on the farmers. they knew that they were just having a couple of bad years, and they couldn't pay their farm loans off, and they didn't

and so kenneth ro rogoff at harvard recommends that since some people say, well, but if we lower the mortgage rates, if we bring the mortgage down to the value of the house, then the people who hold the mortgages will lose money. who's going to compensate 'em? and what's it going to be? rogoff has suggested that the banks are the people who ultimately hold the mortgages. instead of writing them down, just cut them in half by taking an ownership position in the house so that when the house is ultimately sold, the people who issued the mortgage will, or own the mortgage will share in the profit, and you get the same practical result. you no longer have a bad debt on the books, and the homeowner's got a mortgage that he or she can pay. and i said in the book, i know this'll work because in, when i was governor in the late '70s and early '80s and our farmers got in trouble, we had then hundreds of small state-chartered banks who did not want to foreclose on the farmers. they knew that they were just having a couple of bad years, and they couldn't pay their farm loans off, and they didn't

and the carbon carmen reinhart and kenneth rogoff date, debuted that is the best available measure of the set of countries over the period of time they have done this analysis work. i don't want to put words in their mouth. we've discussed this issue with carmine. in our case, because we do these elaborate projection in a very detailed level of the budget, that combining those projections the debt held by the public is your colleagues the best sense of where this country's dance today. >> thank you peered >> representative camp. >> thank you very much. i decided to point out as part of the fiscal commission, i researched how often federal revenues exceeded 20% of gdp in the history of our country and we found that only 10 at 23 times in the history of our country in 1844 and 1945 and 2000. and in 2000, there were 20.6% of gdp revenues and i was largely due to the threefold increase in capital gains from 40 billion in 1999 to 12 billion -- 121 billion in 2000. so that was what drove that. >> i think that's right, congressman. we might thank you. and the 11 fiscal years since 1940, we h