Thanks to the Federal Reserve, JPMorgan Chase CEO Jamie Dimon, and the Obama administration, the U.S. economy is "bleeding, " John McCain, the Republican Senator from Arizona and former presidential candidate, told CNBC.
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U.S. Sen. John McCain (R-AZ)
McCain, who lost to President Barack Obama in the 2008 presidential race, told CNBC that Wall Street had taken precedence over Main Street during much of the financial crisis and he hit back at Dimon , head of JPMorgan Chase, who said on Wednesday that the acquisition of Bear Stearns during the 2008 collapse had done the Federal Reserve a "favor."
"I don't owe Mr. Dimon anything, " McCain said. "Mr. Dimon has done very well as have major financial institutions, and the American people are very unhappy and dissatisfied with it, as they should be."
McCain also said he was not sure he'd support Fed chief Ben Bernanke for another term and he criticized the central bank's decision to buy $40 billion in mortgage debt a month, as part of its next round of quantitative easing .
"I'd have to think about it. … But I'm very unhappy with his performance and what's happened to the economy when he's announced all these measures and all the easy money. Who gets the benefit of the easy money? The big businesses on Wall Street."
McCain also sounded a warning about rising U.S. debt, a day after the authors of the Simpson-Bowles reform plan to cut U.S. debt told CNBC the country was heading towards a fiscal disaster .
"We've gone from a $10 trillion debt to a $16 trillion debt — a $51, 000 debt for every man, woman, and child in America, " McCain said. "That's not acceptable."
Attempts to get a solution however have failed as Congress has split on partisan lines, but McCain sounded a conciliatory note.
"We need to sit down all of us with our president and say, this is our deficit, this is our goal, here is the period of time that we have in order to fix it and here are the measures that have to be on the table, " he said. "Whether we agree or disagree on the measures needed. We've got to stop the bleeding, and that means putting everything on the table."
The Senator said he would cut a number of subsidies, but he would not cut tax deductions on interest.
"Listen, we give tax breaks to people who buy taco boxes, we have subsidized ethanol [production] which is an insult to everybody's intelligence. We have so many tax breaks for special interests that the tax code is this high, " McCain said. "If you just simplify the tax code then you work on getting increased revenues."
A number of experts have warned of the growing risks from the U.S. "fiscal cliff" — a combination of higher taxes and spending cuts. On Friday, Zhu Min, a managing director at the International Monetary Fund , called it a major concern for the world economy .
There are fears that should the Republicans and Democrats in the Congress not be able to reach an agreement, a recession and 2 million jobs could be lost, according to the Congressional Budget Office.
McCain told CNBC that he is optimistic an agreement can be reached.
"We all know we're facing a fiscal cliff, " he said. "Everybody knows we have to fix it. The problem is nobody knows exactly how."
He added: "But I believe as we get close to Jan. 1, the markets will start to react as people are severely impacted by the 'cliff' and I have every hope that [then] we can sit down and reach an agreement."
—By CNBC's Holly Ellyatt
