night's conversations with great minds i'm very pleased to be joined in the studio tonight by david stockman former united states congressman representing the state of michigan was elected to three terms before stepping down to head up the office of management and budget under ronald reagan president ronald reagan in one thousand nine hundred one he is credited with writing the reagan budget and continued his work on federal budget in three one nine hundred eighty five after leaving politics david stockman pursued a career in investment banking and joined rockstone group as one of it's really his partners he's the author of the book triumph of politics of the reagan revolution failed and his new book tentatively titled the triumph of crony capitalism would spur crony capitalism reached a peak during the recent financial meltdown it's scheduled for release next spring as our nation deals with perilous financial problems and a weakening economy certainly his insights are worth hearings and i do woodstock and welcome thank you glad to be here have you with us here. just to the moments in time r

our next viewer comment is from the ramp line last night i was joined in the studio by david stockman economist former congressman and director of the reagan era office of management and budget and republican is credited with writing the reagan budget and continued his work on federal budgeting through nine hundred five for after a few years in the reagan administration stockman turned against the promise of reagan's fiscal policies even authored a book on why the reagan revolution failed last night in fact he explained why. once we got into the heat of politics it came unstuck the defense posture got way too big the pentagon got out of control and unfortunately ronald reagan was unwilling to discipline the pentagon and he hated big government but it stuck with the potomac river secondly when we passed the tax cut in order to pass it we had a pretty and every kind of ornament and special interest gimmick and tax break in loophole imaginable there was almost like a feeding frenzy on capitol hill and so the tax bill ended up being forty percent bigger than we had tended as the deficit b

one of the other men i interviewed was pretty stockman.d two month ago, really interesting side note that the men that i interviewed are really in the last chapter of their lives. but her be stockman explain to me what it was like to be the first man to fly over the soviet union in u2. he agitated nikita khrushchev greatly and there was a lot of fallout between the eisenhower administration and the soviets over this buying that was going on. but at the same time, what stockman brought back in the film canisters of his u2 was over 400,000 square feet of film of spy footage, about what was going on in the soviet union. as he said to me, the cia was able to learn and understand that in fact the soviets were not lining up for world war iii as many members of the air force wanted to believe. certainly general lemay who is a character in my book as well. you might call him the antagonist. when you consider that the cia's job is to present intelligence to the president based on facts, not fiction, not speculation, that is what the u2 spy plane ce

stockman just mentioned, i've looked at all those numbers in terms of where gkp is -- gdp is, but say short-term growth with medium and longer-term real deficit reduction. and one of the things that we built upon, for example, the very good work of the simpson-bowles was good enforcement mechanisms because one of the things that happens is nobody believes when congress acts that they're going to actually enforce what they say. we better put some real hooks into that. but i would argue that, well, we need everybody's ores in the water at this point -- oars in the water at this point. this will not happen unless the business community, the political community, the budget thinkers all kind of agree that we're going to help this supercommittee get to this bigger number. and candidly, at this point -- one last quick comment, i'm sure we'll get back around -- the margin's 10% on either side to my mind, and i feel very strongly about some things, but i'd be willing to move on those margins to get an agreement. i think one of the biggest single things, one of the things that was so self-infli

four balanced budget the, but at least i did three of them, and i'm proud of it, it was not with stockman. he had a magic asterisk. he balanced the budget with an asterisk. i think it was only $37 billion. now we wouldn't even bother with him now. we thought that was truly messing with the books back then. having said that, i want to tell you, there's no question in my mind that we must convince the american people that the future of this republic is dependent upon us fixing this problem. if we don't fix it, we don't fix it, so that we have a sustainable situation in terms of measuring the amount of our gross national product that we consume. if we don't do that, we will not be the type of country we are today in 25 to 30 years. we will be a lesser light in the horizon of countries in the world. we won't be much for ourselves and there won't be a vibrant future for our children. it's not that they're going to have to pay our bills, they're going to inherit a second-rate country instead of a first-rate country with dreams. if that isn't work, i don't know what is. so i'm getting old, but i

wow, john stockman, he and i were in charge of the pentagon. as the secretary and he was the comptroller. and as i think back on that, and careful here not to challenge my colleagues from that area because they think they all did good work. but my recollection of the close of the gulf war was that there was unanimity on the part of the president, his senior civilian and military appraisers, that we gathered around the desk in the oval office. we had the secure line open to riyadh, where our senior military commander general schwarzkopf was. and you could look back on it later and say well, we should ms or we should not let them have helicopters or there were things we didn't know at the time. but there was a general sense that we done what we set out to do. it's what the congress authorize call it the u.n. security council to find out. as we told the coalition and our troops were going to do and i promise when i got over there initially to get permission to put u.s. forces into saudi, it also promised them as soon as we completed the mission we

this is a pretty substantial margin to work with. >> david stockman, someone that we did on these issues you were pretty outspoken even earlier. the chairman told us five to 6 trillion should be the appropriate target for the deficit reduction over ten years. how do you get there? >> [inaudible] i want to say why but before i do that -- >> before i do that i want to thank you for recommending my book. the joint politics i wrote 1986. i don't know if it was any good but when i was run out i did write the book and my publisher gave me 800 copies to distribute to my friends and i still have 795 copies left. [laughter] so if anybody needs 1i have a lot of books. [laughter] >> i think that this ten year thing is really causing us to play a numbers game to get lost in the numbers that is resulting in her losing track of how serious this problem is because we talked about go big, no green or go sooner. but whether your during a 1.5 trillion or 4 trillion remember that is again the ten year baseline as you can see that far in the future which is $200 billion. so we are asking should we cut the d

. >> david stockman. i want to cause dissension. it's obvious when you spend 24%, taking in 15%, you need a massive new source of revenue. we're going to cut a little bit, but not much. that should be a consumption tax or tobin tax on wall street -- [inaudible] they are not doing anything that's very important or interesting for the economy right now, but what we hear instead is the great white hope is tax reform. i'd like to suggest to this group and see your reaction that tax reform at the end of tax reform is a massive swamp at the end of gulch that will lead to massive political conflict and result in even worse polarization than we have today. why? just quickly. there's supposedly a trillion tax expenditures. $200 billion is preference for capital gains and dividends. $180 billion of that is the reference for retirement. $170 billion is medical. $120 billion is homeowners and all the different visas. put that together, it's $700 billion and which part of that will you blast away? how much revenue are you going to get out of the

david stockman, and senator warner, the sitting senator and one of the gang of six, heavily involved are going to talk pretty much about anything that you want. this is one of those washington policy forums where you get to answer any question. we want to have a rich discussion. what we want to focus on is where the politics and economics of this issue are right now and where they are headed. i have to observe, it has been pretty remarkable. i saw people disagree. they were allowed to. across the board, it has been a fairly tough argument in urging and forcing the super committee to come up with a fix is a necessary endeavor. >> first of all, let me start with chairman greenspan with the economic argument. you have had a lot of discussions about going big. and from an economic standpoint, what is the right number and how quickly do we have to get there? >> it is not for dollar trillion. the reason, as everyone here is aware, there is a tendency in government to underestimate the size of the problem. indeed, if you look at the underlying economic decisions that have been made, forecas