LL: A lot of the things you are talking about is good fiscal common sense and we have not had good fiscal common sense in Washington for some time. What is needed to instill that? Does the change have to come from the top with a new President in 2012?
TP: Congress is sitting on top of a ponzi scheme that has been developed over years and decades and maybe even generations and has been made worse in recent years. The President and the current administration have to take substantial responsibility for that. Its true politicians will only make tough decisions when you put their backs against the wall. This debt ceiling question is not a crisis.
It's actually an opportunity to force politicians to do something tough. They all get on cable TV. and on the campaign trail saying its time to make the "tough decisions" and we really have to do these tough things and they never do. This gives them the courage and conviction to start the process of cleaning up this mess. And I believe the current leadership of the Congress, Speaker Bohner, Leader Eric Cantor and Paul Ryan and others will get this done.
LL: We have heard from the Administration, particularly Austin Goolsbee that the Republicans are playing a "game of chicken" with the debt ceiling and if we hit the debt ceiling it could be "catastrophic". Do you think this is a scare tacit?
TP: It absolutely is. For instance, if you listen to the rhetoric very carefully and press them particularly on what I'm describing—the Secretary of the Treasury speaks not to defaulting on our outside creditors, he speaks not about being able to pay our outside obligations and so when people talk about a default, what they are really talking about is defaulting on our outside creditors—the people holding our debt. That's how it would affect our bond ratings in the financial markets for the most part.
And what I'm telling you is if we force the Treasury to pay those obligations first through the legislation I'm advocating for that default would not occur. And that scare tacit they are using would be off the table. We need to address the more meaningful reforms like the obligations the government owes within itself between various accounts. That's the heart of the matter here. The crisis is not paying the outside creditors. Its about whether we can pay all the operating costs of the federal government- that's the real crisis. We need that debate.
LL: Even today the Obama Administration is saying we need more spending right now versus cuts to help employment.
TP: The suggestion we need more spending right now is preposterous. I believe we have a government bubble. We had an IT bubble in the 1990's, we've had the housing bubble and the Wall Street bubble, we had the auto industry bubble and now you have a government bubble. Its at the federal level, some states as well as local governments. You have management and labor running up costs so far and so fast for so long.
There was no reasonable assumption about revenues possible keeping up with that and the bubble needs to be popped. We don't want to do that in a way that is harmful or destructive, but we need to let the air out of the bubble and restructure government just like businesses who have gotten into trouble by promising too much and not being able pay their bills.
LL: You have challenged Mr. Obama to explain why he as a senator opposed and voted against a debt-ceiling increase under President George W. Bush. Mr. Obama said the "raising America's debt is a sign of leadership failure. Leadership means the buck stops here."
Now President Obama says the Republicans are reckless. The war of words are heating up on this. Why isn't he practicing why he preached back then?
TP: All of us, including me and the media need to hold him accountable for the hypocrisy between his statements then and his actions now. The debt ceiling by most estimates will have to be increased by $16 trillion by the time he ends his first term. So it is at $14 trillion now and not long ago it was at $10 or $11 trillion.
So basically on his watch, you have the debt ceiling going from $10 or $11 trillion to $16 trillion in his first term. Its an absurd situation and his comments that he made when he was a senator should be put up on every screen in every living room in the country and then he should go look into the camera and look the American people in the eye and explain that hypocrisy.
LL: President George W. Bush continues to be blamed for the economic and spending mess we are in. Is it fair to continue with this blame?
TP: President Obama's spending since the end of President Bush's term has more than doubled the deficit. So the government essentially took in $2.2 trillion last year and they spent $3.7 trillion and now there are trillion dollar or so deficits projected as far as the eye can see. And to blame President Bush for this is not accurate or fair.
Obama needs to take responsibility for his own actions. It was in the Bush era that President Obama, then Senator Obama said we should not be raising the debt limit. Now he not only wants to raise the debt limit he wants to raise it in a dramatic fashion.
A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."
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