we will get a fair and balanced debate with senator phil gramm. senator, i guess that is what troubles me. not so much that i love romance as much as the next guy. what is prompting this? what you say? >> well, first of all, you have to remember that everything that is doing now is going to have to reverse when the economy ultimately starts to grow. for example, this new action, one shilling and a half of government debt. it will monetize the debt ridden when it sells that trillion and a half dollars, interest rates will rise substantially. the federal deficit will go up. every 1% rise in interest rates will cost $100 billion. mortgage-backed securities, when they are sold as they have to be when the economy starts to recover, the mortgage-backed securities market is small by historic standards. these massive sales are going to end up driving up interest rates far more than they are driving them down now. neil: here is what really worries me. taking a look at the big board today. the fed today, ben bernanke was saying that he watches this. he watc

former senator phil gramm of carry u.s. policy metrics and joins us from san antonio, texas.ou wrote an op-ed comparing president reagan and president obama's response to a recession saying among other things jobs and incomes rose under reagan and fell under obama and the number of americans on food stamps and unemployment fell under reagan and rose under obama. what did president reagan do that president obama is not? >> first of all we had two big-time recession in -- 1981 where the unemployment rate went to 10.8%. at the same time we had double digit inflation and 21% interest rates. a hard time. we had the current recession which has been a deep and bitter recession. the two presidents had very different policies. ronald reagan cut taxes, reduced discretionary spending and reduced regulatory burden and the economy responded 55 months after the recession started. reagan's recovery created 7.8 million more jobs than when the recession started. president obama massively increase discretionary spending, proposed and implemented tax increases and implemented the most rapid reg

he's senator phil gramm from the great state of texas but born in the state of fwea and got his ph.d. from the university of georgia, a ph.d. in economics and he had an article in the "wall street journal" just this past week and i want to tell -- i want to tell you what it said. senator graham writes this, since mid september, 2008, the federal reserve balance sheet has grown to $2.8 trillion from $924 billion as it purchased massive amounts of u.s. treasuries and mortgage-backed securities. to finance these purchases, the fed increased currency and prank reserves, base money, that kind of monetary expansion would normally be a hashing of inflation -- hashinger of inflation. however, the inflation rate has stayed close to the fed's 2% target. now, mr. speaker, i work hard. i study hard. i get through paragraph 1 of dr. graham's editorial, i'm already getting confused. because we don't spend enough time talking about velocity of the money supply. we don't spend enough time talking about what the federal reserve's doing in terms of purchasing of bonds and we don't spend enough time tal

i recommend this article to you, september 11, 2012, again, written by senator phil gramm, our last serious effort. this is a gentleman who is concerned about american debt for a generation, for a generation and served here in the house and united states senate and moss progressive to try to change the fiscal direction of the country for the better. writing on september 11 about our fiscal future and what is happening at the federal reserve. i'll close with the same way that he closed, he said some day, hopefully next year, the american economy will come back to life. the money will expand and velocity will rise. unless the fed responds by reducing its balance sheet, at that point the cost of our current monetary policy will be all too clear. like mr. obama's monetary policy will ultimately have to be paid for. the fed softened the recession by decisive actions, but the marginal benefits have almost certainly been small. we may find the policies that have little positive impact on the recovery today and have high costs indeed when they must be reversed in a full-blown expansion. not a man o

phil graham, who constructed the original mechanism back in 1985. he testified after the budget control act was passed, and he his was the objective of gramm-grudman was-- what we just heard shows we've got a gap in terms of the two sides. but in the past our predecessors, started in 1985 through 1992 kind of, you know, grinded away in terms of getting proposals which were very hard for both sides to get to, but nonetheless, did what was right for the country. and, general dunford, your description of, you know, the folks that serve under you who responded to the call a few weeks ago and did their job and how they, frankly, are counting on us to do our job, you know, to me was probably the most powerful statement this morning in terms of, you know, what the real issue is here about whether or not, um, the people of this country have any confidence in this institution to do its job. and i would just say, you know, i don't have a question, i just, you know, the decision on friday by the leadership of the house to basically cancel all the session days that were scheduled in october to basically leave town for seven weeks, um, you know, that does not comp