- Moore is an economist withthe Heritage Foundation.

He joins us from our Washington Bureau.

Steve, why doesn't theCongress do something

about this deficit, instead of talking

about impeachment and guncontrol and all this stuff?

- Well, Pat you said it wellthat federal spending is out

of control, and that isa truism in Washington,

and I hate to tell you thisPat 'cause I know you ran

for Republican president,the Republicans are just

as responsible for these big deficits

as the Democrats are becauseit turns out politicians love

to play Santa Clause, and sowe now have a situation, Pat,

where the Democrats wanna spend more money

on social programs, theRepublicans wanna spend more money

on the military, so theyspend more and more on each.

Now I want to be clearon one point though.

I think this is really important, Pat.

It is not a revenue problem.

If you look at what happened,even after the Trump tax cuts,

which I think really rejuvenatedthe American economy,

in 2018 and 2019, asyou know the fiscal year

for 2019 ends on October 1st,

the federal tax revenueswere at an all-time high.

Never before in the history

of this country have wehad higher tax revenues

than 2018 and in 2019, so that tells me,

Pat, it is not a revenue problem.

It's not the tax cuts, it'sthat neither party wants

to do anything to cutout-of-control government spending.

- Steve, you wrote a column

in the Wall Street Journal recently saying

that the government should refinance debt

while those interest rates are so low.

Tell us more about that.

- First of all, Pat, you showedthose frightening numbers

on the screen a minute agoabout how big our debt is,

and that the debt is larger than our GDP.

I mean, that's a frighteningthing to think about.

I mean, I remember whenI first came to town,

we had $100 billion deficits.

Now, we have trillion dollar deficits.

I mean, it is an outrage.

Now, I will say this, though, think

of how big our debt would beif interest rates went back.

Do you remember, Pat, in the 1970's

when we had 15%, 16% interest rates?

Remember that under Jimmy Carter?

Imagine we moved towardsanywhere near interest rates

as they've been in the past,

even 6%, 7%, and 8% interest rates,

the burden of paying forthat debt would be enormous,

so what I'm saying iswhile we have these lowest

in history interestrates, the interest rate

on the 10 year Treasury bill is now 1.5%,

30 year Treasury bills's at 2%,

let's lock those low interest rates in,

and issue 30, even 50 year bonds

so that we're not susceptible

to a giant increase in interest rates

that would send our debt evenmore into the stratosphere.

- If we flood the market,can the market sustain

that kind of issue by the treasury?

- That's a good question,we don't know for sure.

Let's try it and see.

There's other countries, Ithink Austria is one of them.

Austria has a 100 year bond out there.

Pat, I don't know ifyou bought any of those,

100 year bonds, you know

what the interest rate on that is?

1% per year.

- Incredible.- There's

so much risk aversionout there by investors.

Yeah, I do think peoplewould buy up these bonds.

Look, the safest investmentin the world still is buying,

other than buying gold, isbuying a US Treasury Bill,

so yeah, I do think there'sthe demand out there.

You've got (chuckles) right now,

you're not gonna believe this, Pat,

you've got something like$10 trillion out there

in the world economy of bondsat negative interest rates.

You heard me right,negative interest rates.

- Unbelievable.- People are buying bonds

- Unbelievable.(laughing) at rates.

It's unbelievable, nowthat is why I think we,

the United States could do this.

I don't know if we'regonna get negative rates,

but I think we could get a lowinterest rate on those bonds,

and that would help over the next 20

or 30 years save acouple trillion dollars,

and even in Washington, that's real money.

- What's gonna movethe economy to do that?

I mean, you're close to those fellas,

don't you think the Presidentoughta take the lead on that?

- Thanks to my op edpiece that you mentioned

in the Wall Street Journal,the Treasury's getting on this,

and they're certainly gonnaissue more long-term debt,

which is a good thing.

People don't realize,just take a wild guess

at what the average turnoveris on that $22 trillion debt?

- Well, the economy is strong.- 5 1/2 years.

5 1/2 years, so let's increasethat debt 15 or 20 years,

and we lock in those low rates,

but that's only part of the solution

The big part of the solution,I'm gonna throw it out there

for you, Pat, is somethingDonald Trump has talked about.

Have you heard of the Penny Plan?

- Yeah, go ahead.- Let's do that.

It's so simple, for thosewho have not heard of it.

It's just for every dollarwe spend in Washington,

next year instead of thatagency spending a dollar,

they spend 99 cents,so they cut one penny.

The next year, they spend one penny less,

and the next year theyspend one penny less.

Now, this is Washington, that wastes

about 25 cents of every dollar they spend.

Don't you think, maybe, theycould suck in their stomach,

tighten their belts andsave a penny every year

on they spend, and by theway, that may not seem

like a lot of savings,but, Pat, if you do that

for five years, you'vecut the deficit in half,

just by cutting that penny a year.

Why not do that?- Incredible.

You remember the old Roosevelt mantra?

Tax and tax, and spend and spend,

and that's the way they got elected.

Do you think any economistis gonna get elected

because he says I've cut the deficit?

- Well, that's a good question.

Look, I don't wanna be too negative here.

I mean, you're right, thisdebt is outta control.

I'm so glad you've puta siren alarm out there

about this debt 'causenobody in Washington wants

to talk about this becauseas I said both parties are

in on this, both parties are,but on the other hand, Pat,

this economy is doing really well.

If you're an American worker,and you're in my lifetime,

there has never been abetter time to be looking

for a job than right now.

Did you know, Pat, we have7.3 million unfilled jobs

in America, that's more jobs unfilled

than the entire populationof the state of Indiana,

so we're talking abouta robust labor market.

Donald Trump has done a great job

of creating the jobs thiseconomy needs, wages are rising.

The average Americanincome is up $4000 a year

since Trump took office.

I love this picture, andyou know what I love most

about this, Pat, the lowest Black

and the lowest Hispanicunemployment rate ever

since we started keepingthis records, amazing.

- (chuckles) Let me ask you, there's a lot

of these nations, especially in Europe

and around the world,they're in serious trouble.

Are they gonna drag us down, do you think?

- Yeah, that's a greatquestion, this is something

that's keeping me up at nightthat the rest of the world.

Europe is flat, theireconomies aren't growing.

Germany is actually in a recession.

Japan's kind of flat.

China, there was a big article

in the Wall Street Journal the other day.

China lies about theireconomic statistics.

They're saying they're growing at 7%.

A lot of economists think

they're economy's actually contracting,

so it's a global economy, bythe way, guess what country,

of all the industrializedcountries today, Pat,

is doing the best?

- The U S of A, right?

- You better believe it.(chuckling)

They're all looking over theresaying, "How'd he do that?

"I want whatever he's doing?"

Because it's working, and wegotta get this trade deal done

with China and my prediction to you, Pat,

if we get this trade dealsigned, sealed, and delivered,

and I happen to supportwhat Trump is doing.

It's slowed down the economy a little bit,

but this is a toughfight we have with China,

and they're a bad actor.

They're a menace now on the global scene.

If we can get a tradedeal done with China,

I think you're gonna seethe American economy,

it's gonna be like taking achampagne body shaking it up

and taking the court off of it.

That happens, in 2020,we'll have a strong economy.

I don't care if it's Mark Sanford,

or I don't care if it's Elizabeth Warren.

I don't care if it's Mother Teresa,

they're not gonna beat DonaldTrump in a strong economy.

- I love it, Stephen Moore,thank you, my friend,

for joining us, that's great.

In other news.