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offer from there were -- their employers. | :00:05. | :00:15. | |
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Time for HARDtalk. Mitt Romney and his Republican | :00:17. | :00:20. | |
advisers claim momentum is on their side as the US presidential | :00:20. | :00:25. | |
election enters its final stretch. Their unrelenting focus is on the | :00:25. | :00:30. | |
ailing US economy and their claim that a Romney administration would | :00:30. | :00:36. | |
rebuild America as a low-tax, small government haven of economic | :00:36. | :00:41. | |
enterprise. My guest is the founder of the advocacy group, Americans | :00:41. | :00:47. | |
for tax reform. He is one of the most influential figures in | :00:47. | :00:52. | |
Republican politics. How credible is Mitt Romney's rescue plan for | :00:52. | :01:02. | |
:01:02. | :01:23. | ||
America? Welcome to HARDtalk. | :01:23. | :01:27. | |
Good to be with you. It is clear that Americans have | :01:27. | :01:31. | |
been somewhat distracted from the battle between Barack Obama and | :01:31. | :01:34. | |
Mitt Romney by Hurricane Sandy but putting aside the efforts of the | :01:34. | :01:39. | |
country to clear up from that and focusing on the politics, is it not | :01:39. | :01:43. | |
a problem for you on the conservative side of the fence that | :01:43. | :01:49. | |
your argument with Barack Obama, that he has failed to manage the US | :01:49. | :01:52. | |
economy, is looking increasingly threadbare as the economic | :01:52. | :02:00. | |
statistics show that the economy now is clearly in recovery mode? | :02:00. | :02:07. | |
The economy has technically been in recovery since July, 2009. We have | :02:07. | :02:13. | |
been in recovery for almost all of President Obama's presidency. But | :02:13. | :02:18. | |
if you compare this recovery from when it started to that of Ronald | :02:18. | :02:23. | |
Reagan's economy, if we were matching, going out for two months | :02:23. | :02:27. | |
in each economy -- heat recovery, there would be 10 million more | :02:27. | :02:32. | |
Americans at work today if Obama had followed Ronald Reagan's tax -- | :02:32. | :02:37. | |
path of cutting moderate tax rates, reducing regulation instead of | :02:37. | :02:40. | |
expanding it and trying to reform entitlements instead of putting new | :02:40. | :02:45. | |
ones on top of all the ones that have not been reformed. This has | :02:45. | :02:49. | |
been a disaster of a recovery compared to what Ronald Reagan did, | :02:49. | :02:57. | |
compared to every single recovering since the 1930s. With respect, | :02:57. | :03:02. | |
Ronald Reagan inherited a difficult economic situation in 1981, but | :03:02. | :03:07. | |
nothing like Obama's inheritance from George W Bush after the global | :03:07. | :03:11. | |
financial crash the US economy was in meltdown. You had a massive | :03:11. | :03:15. | |
deficit and debt problem to deal with, which Obama is still | :03:15. | :03:19. | |
wrestling with, but he has, if you look at the figures, the | :03:19. | :03:23. | |
unemployment figures, the growth figures, housing starts and | :03:23. | :03:28. | |
everything else, he has over four years finally injected confidence | :03:28. | :03:35. | |
back into the US economy. OK, you must be a very young man | :03:35. | :03:38. | |
because you do not remember that when Reagan was elected, interest | :03:38. | :03:44. | |
rates in this country were over 20%. Prime interest rates. Inflation was | :03:44. | :03:49. | |
over 10% two years in a row. We had a declining standard of living. And | :03:50. | :03:59. | |
:04:00. | :04:02. | ||
we had a decade of decline, not a financial crash. And as you | :04:02. | :04:06. | |
remember, keeping those UN reform was Obama and the Democratic Party | :04:06. | :04:10. | |
refusing to break them up and to force them to reform, Freddie Mac | :04:10. | :04:15. | |
and Fannie Mae. Yes, we had a crash because of Freddie Mac and Fannie | :04:15. | :04:20. | |
Mae going belly-up and having hundreds of billions of dollars | :04:20. | :04:25. | |
thrown at them. That was something that Republicans were complaining | :04:25. | :04:29. | |
about and are arguing to reform for almost a decade. I think we would | :04:29. | :04:34. | |
have been better off if push it focused more on fighting the | :04:34. | :04:37. | |
Democrats and Freddie Mac and Fannie Mae rather than some of the | :04:37. | :04:43. | |
international staff. Let's not get too hung up on the causes of the | :04:43. | :04:49. | |
meltdown in 2007 and 2008. The fact is that there was a meltdown and | :04:49. | :04:55. | |
Obama had to react to it. But that is important! Philosophically, I | :04:55. | :05:00. | |
want to address one issue with you. It seems that you and those on the | :05:00. | :05:04. | |
Republican to get out selling the idea to the electorate that, | :05:04. | :05:08. | |
frankly, far from being a force for good in terms of managing the | :05:08. | :05:14. | |
economy and economic recovery, government is a malign influence. I | :05:14. | :05:19. | |
wanted a one specific and asked you about it. That is, the bail out. | :05:19. | :05:23. | |
The government bail out of the water industry in Detroit and the | :05:23. | :05:30. | |
big three water industry produces. Is it your position as it was with | :05:30. | :05:37. | |
Mitt Romney, that Obama should have let Detroit to go bankrupt? He did | :05:37. | :05:43. | |
let it right go bankrupt. But first, he handed out a lot of taxpayer | :05:43. | :05:47. | |
money to organised labour. They went in and shows some auto | :05:47. | :05:51. | |
dealerships to be shut down, others not, not through bankruptcy, not | :05:51. | :05:56. | |
through law, but through political process as. The deal is thought | :05:56. | :06:01. | |
that a lot more Republican dealerships were shut down than | :06:01. | :06:05. | |
democrat or independent ones. Then, they went in and if you were | :06:05. | :06:10. | |
unionised, you got pension subsidies and if you weren't, you | :06:10. | :06:15. | |
didn't. They went in and took away the legal right that people who | :06:15. | :06:24. | |
owned debt had to be paid first. They went, no, Union's first. This | :06:24. | :06:28. | |
was a politicisation of a bankruptcy. Chrysler was sold to a | :06:28. | :06:33. | |
foreign company and General Motors is exporting jobs. This is not | :06:33. | :06:38. | |
exactly the brilliant moment for the Obama administration... It was | :06:38. | :06:42. | |
completely politicised what could have been a natural bankruptcy, | :06:42. | :06:48. | |
which companies come back from all the time. Yeah, I find what you say | :06:48. | :06:53. | |
interesting given that you and other senior members of the | :06:53. | :06:57. | |
Republican team how to deliver a message to the voters of Ohio, for | :06:57. | :07:01. | |
example, where the water industry provides a substantial number of | :07:01. | :07:08. | |
jobs, that, you know what, we wouldn't have failed to out. And, | :07:08. | :07:14. | |
frankly, you probably wouldn't have jobs now. And given that Ohio, sees | :07:14. | :07:19. | |
2009, has seen a jobs recovery, that might be something that many | :07:19. | :07:26. | |
voters there might not want to hear. Well... OK... You do know that the | :07:26. | :07:30. | |
bail out went to two companies - General Motors, Chrysler. Ford it | :07:30. | :07:37. | |
did not get bailed out. Ford is still functioning. Ford is still | :07:37. | :07:43. | |
employing people. Ford is in Ohio. Toyota. Many international car | :07:43. | :07:48. | |
companies operate in Ohio. And it you know much better than I do that | :07:48. | :07:52. | |
the auto makers generally, including experts were analyse the | :07:52. | :07:56. | |
for situation, said that if General Motors and Chrysler had not been | :07:56. | :08:03. | |
saved, Ford and Toyota would have gone bust as well. That would have | :08:03. | :08:06. | |
been fascinating. That if their competitors were not there, Ford | :08:06. | :08:12. | |
would have done worse? Or that Ford would have had their competitors | :08:12. | :08:16. | |
financed against them? And you believe Ford and Toyota would have | :08:16. | :08:21. | |
survived the General Motors and Chrysler went bust, do you? OK, the | :08:21. | :08:26. | |
argument when you to a rule of law bankruptcy... The companies don't | :08:26. | :08:31. | |
go away. All the American Airlines had gone bankrupt and come back. | :08:31. | :08:35. | |
What you do is you renegotiate and figure out your costs and so on. | :08:35. | :08:39. | |
All the equipment is still there, all the workers are still there, | :08:39. | :08:44. | |
all the expertise is still there. If you do end up liquidating a | :08:44. | :08:47. | |
great deal of debt. What was done was a politicised version of | :08:47. | :08:52. | |
bankruptcy reform, rather than a legal version. It is not an | :08:52. | :08:56. | |
improvement. It does get your fingerprints on who you give money | :08:56. | :09:03. | |
to, who you get favours from, and the automotive industry's unions | :09:03. | :09:08. | |
are major contributors... What happens is they take taxpayer money | :09:08. | :09:14. | |
and a report people who give them money. Sorry for the interruption, | :09:14. | :09:20. | |
there is a time delay, but you paint this as an utterly partisan | :09:20. | :09:26. | |
moment. The very conservative Detroit News newspaper, which is | :09:26. | :09:29. | |
actually pushing for Romney in the election, at the very same time has | :09:29. | :09:34. | |
made it clear in their view, and I am quoting directly from an | :09:34. | :09:37. | |
editorial: Mitt Romney was wrong in suggesting that alternators could | :09:37. | :09:41. | |
have found operating capital in the private markets. What General | :09:41. | :09:45. | |
Motors and Chrysler needed was bridging loans to get them through. | :09:45. | :09:50. | |
Obama put a rescue team to work and they were true to that task. That | :09:50. | :09:55. | |
is endorsement from a Conservative newspaper. Sometimes newspapers can | :09:55. | :10:03. | |
be wrong. I mean... Yes. I just find it, when the argument right | :10:03. | :10:08. | |
now is about the economy, the role that government should play in this | :10:08. | :10:12. | |
economy, and when the jobless figures have been so bad for so | :10:12. | :10:16. | |
long and are now improving, I find it interesting bet your message is | :10:16. | :10:22. | |
that ultimately the only good thing government can do is get out of the | :10:23. | :10:28. | |
way. Well, I gave you the two examples of significant economic | :10:28. | :10:34. | |
disruption just before Reagan. Double-digit inflation. He squeeze | :10:34. | :10:39. | |
inflation out while dealing with a recession on top of each other. 20% | :10:39. | :10:45. | |
interest rates, a disastrous economy. The Soviet Union on the | :10:45. | :10:49. | |
march all around the world. Serious defence challenges, not from | :10:49. | :10:53. | |
terrorists with our Bee Gees but guys with thousands of nuclear | :10:53. | :11:00. | |
missiles -- terrorists with rocket propelled grenades. They each chose | :11:00. | :11:05. | |
a different part. Reading's path created 10 million more jobs and | :11:05. | :11:12. | |
Obama's Park did. I have written a book on this. It compares chart by | :11:12. | :11:18. | |
charter President Obama's recovery, which is worse than in France, | :11:18. | :11:23. | |
compared to Ronald Reagan's recovery. And each period of | :11:23. | :11:28. | |
economic growth that has followed. This recovery, technically a | :11:28. | :11:33. | |
recovery, GDP growth has been positive. Terribly weak and lousy | :11:33. | :11:37. | |
compared to history, millions of Americans are out of work. This | :11:37. | :11:42. | |
recovery is only one measure of unemployment. If you cowed people | :11:42. | :11:45. | |
who are not looking for work because they what one but do not | :11:45. | :11:49. | |
think there are any positions there, or who have part-time jobs because | :11:49. | :11:55. | |
they want full-time jobs, nothing has got any better. One month ago, | :11:55. | :12:01. | |
we dropped 200,000 full-time jobs in the US but increased 800,000 | :12:01. | :12:05. | |
part-time jobs because their work part-time jobs but few were full- | :12:05. | :12:11. | |
time jobs. This is no body's idea of a sound economic policy. On top | :12:11. | :12:15. | |
of this, to get his lousy period of economic growth, five trillion | :12:15. | :12:22. | |
dollars of debt for nothing. Let us focus on one specific aspect of the | :12:22. | :12:26. | |
future plan coming from Mitt Romney and Paul Ryan. That is, eradicating | :12:26. | :12:33. | |
the deficit over eight-ten years. The deficit, of course, still over | :12:33. | :12:38. | |
one trillion dollars per year. Piling on a national debt that sits | :12:38. | :12:42. | |
on something like 16 trillion dollars. Given that context, does | :12:43. | :12:47. | |
it really makes sense for Mitt Romney and Paul Ryan to be talking | :12:47. | :12:54. | |
about tax cuts totalling some five trillion dollars? OK, the only way | :12:54. | :12:58. | |
you get economic growth is to reduce marginal -- reduce marginal | :12:58. | :13:03. | |
tax rates. Obama was to take them up. We have the highest corporate | :13:03. | :13:11. | |
tax rates in the world. In Europe, it is 25%. Obama wants to take it | :13:11. | :13:15. | |
to 45%. Most businesses pay personal tax rates, which he was to | :13:15. | :13:25. | |
:13:25. | :13:28. | ||
take up from 35% up to 43%. Most American businesses up to 44%. | :13:28. | :13:33. | |
you know, he does have a plan to cut corporate tax rates as well. It | :13:33. | :13:39. | |
is not so much about the corporate tax rates. I am fascinated to hear | :13:39. | :13:43. | |
how you explain that cut in income tax rates, particularly, let's face | :13:43. | :13:48. | |
it, for the richer, more wealthy Americans, to the tune of well over | :13:48. | :13:54. | |
three trillion dollars, how that is the wise thing to do in the face of | :13:54. | :14:00. | |
massive deficit and spiralling national debt. OK. The problem we | :14:00. | :14:05. | |
have... You keep talking about it. I understand that in the US, that | :14:05. | :14:10. | |
is what Democrats keep talking about. The problem we have is that | :14:10. | :14:14. | |
the government spends too much money. The Democrats, the Liberals, | :14:14. | :14:18. | |
the big spenders, the advocates and lobbyists will be spending in the | :14:18. | :14:23. | |
US, they say that we have a spending programme, we just don't | :14:23. | :14:29. | |
look to the passes enough to give money to our friends. -- steel from | :14:29. | :14:35. | |
the pass is enough. The problem America has, and the good news for | :14:35. | :14:40. | |
Obama, is that the American people understand that we have a spending | :14:40. | :14:46. | |
problem, not a tax problem. We spend too much. And the only way to | :14:46. | :14:52. | |
fix a spend too much problem is to spend next. We know what Obama's | :14:52. | :14:57. | |
plans are. He walked into office and through $800 billion on the | :14:57. | :15:01. | |
spending table. Then he added trillions of dollars. Then he put | :15:01. | :15:04. | |
in a government healthcare programme, which will cost | :15:04. | :15:10. | |
trillions of dollars per decade as it is finally phased in. They face | :15:10. | :15:14. | |
it is slowly because each part of it is so in pop -- unpopular, they | :15:14. | :15:24. | |
:15:24. | :15:26. | ||
The poll is that independent tax economists who have studied the | :15:26. | :15:33. | |
plans to do the maths has not add up. They say it will not work. They | :15:33. | :15:41. | |
say the plan cannot work, it is not mathematically possible. But to | :15:42. | :15:46. | |
give you some numbers for your viewers to keep in mind. If over | :15:46. | :15:56. | |
:15:56. | :15:57. | ||
the next ten years the United States crones not that 2%, but 4%, | :15:57. | :16:01. | |
added to that of 41 decade, he increased revenue's that is an | :16:01. | :16:11. | |
:16:11. | :16:12. | ||
increase. That is a big if. Regan and did it. The point is, if you | :16:12. | :16:18. | |
want revenue, you have growth. We have Obama's plan, what does he | :16:18. | :16:28. | |
want to do? The Warren Luff that are planned. A 30% tax on any one | :16:28. | :16:32. | |
who makes more than $1 million a year. Regardless of how you learn | :16:32. | :16:42. | |
:16:42. | :16:46. | ||
the money, 30% is tax. There would raise - the deficit is seven | :16:46. | :16:55. | |
trillion dollars. - it would raise 49 billion. Less than 1% for the | :16:55. | :17:03. | |
debt better Obama will accumulate. The idea that he bought and raise | :17:03. | :17:10. | |
taxes on the debt, even his own numbers laugh at that. He gave me a | :17:10. | :17:14. | |
lecture about Reagan before and I doubt your knowledge of the man, | :17:14. | :17:23. | |
but as I understand it, after having cut taxes, he raised them | :17:23. | :17:27. | |
three times. Bill Clinton raised taxes and he delivered an economic | :17:27. | :17:37. | |
boom as well. You can raise taxes and deliver growth. We will clarify | :17:37. | :17:43. | |
the difference between tax rates and total tax burdens. Reading took | :17:43. | :17:51. | |
the top rate from 70% to 50%. He never allowed the rates to go up. | :17:51. | :17:56. | |
There were times when the Democrats insisted on certain smaller tax | :17:56. | :18:03. | |
increases. The only significant one was in 1982. It was the biggest | :18:03. | :18:13. | |
:18:13. | :18:14. | ||
mistake of his presidency. Spending not go down, it went up. We saw | :18:14. | :18:21. | |
what happens when you make an increase without cuts. You | :18:21. | :18:25. | |
mentioned Bill Clinton. What did the growth for the first two years | :18:25. | :18:34. | |
of his presidency. What was the turning-point? When the Republicans | :18:34. | :18:38. | |
took control of the Senate and all of his spending plans died. There | :18:38. | :18:46. | |
is why we ended up with a surplus. He was predicting massive deficits | :18:46. | :18:51. | |
every year because he would spend every penny he brought them. When | :18:51. | :18:56. | |
they cut the capital-gains tax without growth. Does it worry you | :18:56. | :19:04. | |
that some respected Republicans have described Mitt Romney and Paul | :19:04. | :19:14. | |
:19:14. | :19:15. | ||
Ryan plan as a fairy-tale. They have said the plan does not work | :19:15. | :19:20. | |
and that you deliver a message that can be summed up as no tax under | :19:20. | :19:24. | |
any circumstances, even if the country goes to hell. These are | :19:24. | :19:30. | |
respected Republicans who disagree with your take on the balance | :19:30. | :19:39. | |
between tax and spending and your approach to the fiscal deficit. | :19:39. | :19:45. | |
Simpson is a former Republican senator from a wedding. He is an | :19:45. | :19:51. | |
advocate of higher taxes. He does endorse the Democrat running for so | :19:51. | :19:59. | |
that in Nebraska. The idea that he is a significant Republican... The | :19:59. | :20:06. | |
reason he has a job is because Obama appointed him. I am willing | :20:06. | :20:13. | |
to debate his position, but the idea that he has stature in the | :20:13. | :20:20. | |
party is a fiction. What you're talking about is Up there are some | :20:20. | :20:30. | |
:20:30. | :20:31. | ||
people who have not read Simpson. The spending cuts are fantasy land. | :20:31. | :20:37. | |
Obama has rejected every one of them. The tax increases the | :20:37. | :20:45. | |
Democrats like, spending cuts they have rejected. There is actually a | :20:45. | :20:49. | |
real budget that has been voted on in the House of Representatives and | :20:49. | :20:58. | |
pass. This is the Paul Ryan plan. It would bring spending down to 16% | :20:58. | :21:08. | |
:21:08. | :21:11. | ||
of GDP. It does not raise taxes. It is revenue neutral. It is rude to | :21:11. | :21:14. | |
interrupt but I want to stop you. He talked about reforming | :21:14. | :21:21. | |
entitlements. What the plan envisages is in the medium to long- | :21:21. | :21:29. | |
term, massive cuts to food stamp programmes, to the medical care aid | :21:29. | :21:39. | |
:21:39. | :21:41. | ||
programme, massive reform and cuts to Medicare as well. They rather | :21:41. | :21:49. | |
things like college aid, that would go. This is what your entitlement | :21:49. | :21:56. | |
reform might consists of, isn't it? It is not. It is a good opportunity | :21:56. | :22:01. | |
to clarify. There are three parts to the reform. We first talked | :22:01. | :22:06. | |
about cutting food stands and Medicare. What the plan does is | :22:07. | :22:16. | |
:22:17. | :22:17. | ||
take the exact same reform that Bill Clinton signed. It gets | :22:17. | :22:23. | |
extended to other welfare programmes. There are 185 means | :22:23. | :22:33. | |
tested welfare programmes. 77 large ones. You take those and say to the | :22:33. | :22:43. | |
:22:43. | :22:45. | ||
state, the one success in Clinton's presidency was reformed welfare. | :22:45. | :22:50. | |
Clinton has attacked his own programme when Republicans to it. | :22:50. | :22:55. | |
He has put himself in an awkward position. We're talking about | :22:55. | :23:01. | |
taking the success of Bill Clinton's welfare reform. It was | :23:01. | :23:11. | |
:23:11. | :23:14. | ||
Roger Regan's idea. -- Ronald Reagan. We remove the devastating | :23:14. | :23:20. | |
strings and regulations that the federal government sends down to | :23:20. | :23:23. | |
the state. That saves a great deal of money while giving more | :23:23. | :23:29. | |
flexibility. We are almost out of time. A final thought. If Mitt | :23:29. | :23:36. | |
Romney wins, do you believe that he will exacerbate or diminish the | :23:36. | :23:43. | |
growing economic and social inequality we see in the US today? | :23:43. | :23:47. | |
I think that he would give strong economic growth which means | :23:47. | :23:52. | |
millions more Americans working. Les is the most important thing you | :23:52. | :24:02. | |
can do. Whenever the stock market goes up that would give more | :24:02. | :24:07. | |
inequality. The recession and the lousy economy has created more the | :24:08. | :24:16. | |
quality. Resurgence du... The most important thing we should do is | :24:16. | :24:20. | |
have a free society with as many opportunities as possible. | :24:20. | :24:25. |