- All right Steve, we'retalking about the national debt.
The national debt justcrossed $21 trillion,
at the same time interestrates are going up.
What kind of impact is that going to have
on paying down the debt?
- You know when I firstcame to Washington,
back in the early 1980s,the debt was two trillion,
and now we're at 21 trillion.
I mean, that's frightening, isn't it.
I haven't been there thatlong, I'm not that old.
We've seen a rocketing of our debt,
especially in the last 10 years,
where Obama took the debtfrom 10 to 20 trillion.
We've got to stop this borrowing
a trillion dollars every year.
And you asked the rightquestion, what is the threat
of having this gigantic national debt.
And as I see it, the biggestproblem is what happens
if these record lowinterest rates start to rise
because the government,the federal government,
is the biggest borrower in the world?
So it's gonna have to payhuge interest rate costs.
We would be paying more for our debt
than we would for our nationaldefense, for Medicare,
for Social Security, allof these other programs.
That is a big, big problem going forward,
if we see even interest ratesgoing to their normal level.
And incidentally as youknow, interest rates just
in the last year or so haverisen by a percentage point.
So if that continues, we'regonna be a whole lot of trouble.
- You brought up a good point there.
If the debt paymentscontinue to rise and rise,
do you see them gettingbigger than major programs,
like the military?
- Well here's the thing.
I mean, the most importantthing in controlling the debt
is to grow the economy.
That's the advice thatI gave to Donald Trump.
Get the economy bigger sothat if we have a bigger,
growing economy, then wecan afford to pay the debt.
And we're achieving that,so that's a good thing
that the economy is doing very well.
But at the same time, you needto control your expenditures.
And I hate to tell youthis, but neither party,
nor the Republicans or the Democrats
want to control expenditures.
It's a bipartisan spendingspree that's going on
in Washington, and until that stops,
we're gonna see trillion dollar deficits
for as far as the eye can see.
- Steve you're talkingabout the interest rates.
If the interest rate goesup a quarter of a point,
or let's say half apoint, what kind of impact
will that have on paying off the debt?
- So every one percentage point increase
in the interest rateincreases the debt payments
over a decade by a trillion dollars,
so we're talking aboutreally large numbers.
If you get the interest rates to rise,
look I'm hoping that's not gonna happen,
so I don't want to scare people,
but if we saw interest rates rise
by two or three percentage points,
then we're never gonna be able to keep up,
even if we start cuttingspending on other programs.
We're not gonna be able tokeep up with the debt payments.
And that's why it would bea very wise thing by way,
the federal government tosell 50 and 100 year bonds
to lock in these lower interestrates so we're protected
from the potential ofa interest rate shot.
The other thing iswe've known for 30 years
that the Titanic is headed to the iceberg
in Social Security and Medicare.
We know the American people are aging.
I'm a Baby Boomer,there's 80 million of us.
In the next 10 or 15 years,
we're gonna stop payingtaxes and we're gonna
start collecting allthese government benefits.
It's not gonna work.
There's just not enoughyoung people to pay
for the freight of allof these older people.
So we need to reform these programs,
maybe delay the retirementage a little bit
as people live longer.
We need to maybe look at ways that we can,
for with respect to Medicare,
maybe higher income seniorscould buy their own insurance.
I mean there's all sorts ofthings that could be done.
And there's slight changesthat over time will make
a big difference in terms ofthe cost of these programs.
- Now do you see the rising debt
to show a need for spending restraint?
- Of course.
- Will Congress get on boardwith doing something like that?
(exhale)
- I fear that it might takeanother financial crisis
before Congress acts, butthen it might be too late.
- [Host] Oh wow, so what do you recommend?
- I recommend we startmaking the changes right now.
The economy is booming right now.
It's time to just, for the president maybe
to make a speech to the American people.
Let's get serious about this.
Look, the American peopleknow this is happening.
American people are not stupid,
they know that we're facinga big, every speech I give,
how many of you are concernedabout the national debt,
every hand in the audience goes up.
Americans are very aware of this.
It's just that we keep electingpoliticians who don't want
to do anything about it.
Grow the economy, getspending under control,
put Washington on a diet,that's the prescription.
- Great, Steve Moore, thanks so much.
- Thank you.
