The downgrade that many on Wall Street was waiting for has happened and now the muni market is holding its collective breath to see who on their block will face similar fate. The political sparing matches have not slowed down and for the Sunday shows, it was a feast of pointing fingers. Bottom line is, the US Government is an addict to spending and the tough decisions still have to be made to get Uncle Sam off the credit card.
We have heard the words "political will" so any times that the US government would have a surplus if they had a dollar for every time it was uttered. Those who occupy the C-suite are also voicing their distaste. I caught up with Ken Langone, Chairman and CEO of Invemed and Associates, Co-founder of the Home Depot and former NYSE Board member on the situation.
KL: If we don't pare back the debt we are going to reach to a point no mater how much we will take in will not be enough to service everything in the nation- entitlement programs, defense. I've said it every time there is no short cut to the getting a drunk or addict to stop their addiction whether is it food, or drugs, there is an element of pain in order to see the positive results. We need to take off the table we "won't raise revenues", I don't mean raise taxes and then go spend the money.
Every dollar we take in should go to the deficit. Let's not forget this credit orgy was created. We took 10 years of housing production and squeezed it into three years. It is not brain surgery on how to fix this.
It takes common sense to solve this. Getting a man to the moon is brain surgery. Congress has to make the easy decisions first- look at social security, Medicare, Medicaid. A person making three million dollars a year is not going to scream if he has to pay his own healthcare- they don't need Medicare, social security, put the bar high. There is merit to Obama's logic in making the rich pay.
If you make three or four million a year you should pay for your own healthcare. We need to be creative in our solutions and that does not mean tricky.
LL: Do you think there is political will to make these tough choices?
KL: This crisis we are in had to come about. I don't think political will is there now. Both sides have to come to address the reality now. Let's have common sense prevail and we need to understand the simple truth. There will be some pain but this will be the beginning of the recovery. I don't think congress has a choice.
They have to fix it. They make the public more confused with their high fluentness statements. If there was anytime America needed a Ronald Reagan or Truman we need him nowCarter must be happy now he is no longer in the basement as being the worst President in U.S.. history.
I don't want to point fingers at anybody but everyone leaving his (Obama) economic team and obviously Geithner will leave too is if you bring in ideologs it won't work. You can't solve things. You just can't keep bashing Wall Street. Congress and the White House have to recognize we are living way beyond our means.
We have diminishing returns. We need cut back. Jersey is a good example of what the federal government should be doing. Governor Christie is telling the municipalities he can't afford to do certain things and they have to make the tough choices of what to cut.
LL: Should Secretary Geithner step down?
KL: Absolutely. Absolutely. He is way over his head.
LL: Let's talk entitlements. What would you like to see here?
KL: I would grandfather everyone over 55 for Social Security and say people 55 and under to retire at 70 or 71. People are healthier and living longer, take a look at me, I'm 76 and I'm going strong so you can retire later$
LL: Do you think the Europe Sovereign Debt Crisis is worse than what is going on here at home?
KL: No. The US situation is far more dangerous because of our world dominance. Greece is a tourist country. Same goes for Italy. Ireland is addressing its issues. China who is our banker is telling us to stop living beyond or means.
We have to address regulation because it is killing jobs. Dodd frank is not even been fully implemented yet and it is already hampering economic growth. What we need most of all right now is a strong dose of candor on the point of our leaders.
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A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."