Great American Debate: Part I

Rep. Paul Ryan, George Will, Rep. Barney Frank, and Robert Reich.
16:57 | 12/18/11

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Transcript for Great American Debate: Part I
We step away from the we can't with a live studio audience of the night studio in the museum and Whitney on this stage some of the leading lights in American political full. On the right House Budget Committee chairman congressman Paul Ryan of Wisconsin and ABC's -- George Will. And on the net congressman Barney Frank of Massachusetts who's just announced that this time in Washington will be his not and Robert Reich Bill Clinton's labor secretary. Now teaching at the University of California at -- Gentlemen we have a lot of ground to cover today and we want to leave time for questions -- well I -- you to keep -- is quite tight. And you'll be an a moment with two -- -- we kick things off with brief opening statements first -- -- -- -- Thank you Christiane. Is there too much government in our lives. Yes. Ask most people and -- will agree. It's no coincidence. That government spending has hit record levels well people's trust in government has hit record lows. So the longer answer why is this is pretty simple. Too much government inevitably leads to bad government. When government grows too much and extends beyond its limits. It usually does things poorly. Our founders put limits on government because they knew the limits of government. The left usually likes to advance but I'm calling straw -- argument or false choice and those of us who believe in a constitutional principles of limited government. Somehow -- sort of -- how. Where people are left to fend for themselves completely only to be exploited by -- a few more powerful and that the only alternative this cruel society. Is a vision of a society of total security. And total outcome -- results guaranteed by government. Fortunately this is not the case. Those of us who believe in -- government also believe ineffective government. A -- and popular government is one that respects its limits is one that -- its goals and its functions -- But look at where we are today look at our economy look at our debt crony capitalism. Our government is picking winners and losers. Where you have big government and big business exchanging favors with one another while the -- -- -- -- small business person is left struggling to survive. The last few years have shown us that -- truly effective government. Is impossible without limits. A government that focuses. On equalizing the results of our lives. Is one that does damage to the American commitment of equal opportunity. If we reclaim our founding timeless principles. We will have a government that we have faith that we are proud. And the question is running the size and the proper size of government will take care of itself. Congressman Ryan thank you very much and congressman Barney Frank -- opening minutes in the half. Yes we have too much government and yes we have too little government. There was this. Mistaken view that you know we have a fight between the people's money and the government's money it's all the peoples money. The question is as people. Intelligently we have two sets of -- We have needs that we best pursue individually with money for ourselves and our family and we can make personal choices. But then -- think that we have to do together. I understand the appeal in tax cuts but -- all -- years of government I've never seen attacks have put out a fire. I've never seen a tax -- build a bridge. Or clean up toxic atmosphere. The point is that there was some things where we are inevitably together. We are into -- locked in the economy. We will all subject to the same environment we all have the same public safety needs and they -- I think we have sometimes had too little government and the other hand. And my conservative friends who claim that they at the small government. Of the want to Telus and an adult shouldn't be able to gamble on the Internet. We have the leading. Who didn't -- conservative Antonin Scalia. Absolutely and it's snit because you can't be sent to jail if you have personal sexual relations of which he does not approve. We have a series of interventions by the conservatives. In those choices it should be got to individuals so my conservative friends have been absolutely backwards. I do want there had to be regulation. For that you don't have the kind of manipulation in the financial area that leads to crises. And I do want to be -- to clean up the environment Ayman Al -- who are you can't get through only had a brief on the other hand as I said that. -- -- are all will be -- by the conservative and by the way they include militarily. I think we have a wonderful military -- -- able young people very well equipped and they can stop anything from happening. But they are not really good at making good things happen in foreign societies and it is on the whole my conservative friends. Who want us to be rebuilding other societies where we're not very good at it truly had -- -- yes we should have more government. Where we need in and interactive way to protect ourselves against. Abusive. But there should be more personal choice and so that's the that that the current situation so my answer is yes I want more government. Involved in economic regulation and environmental cleanup -- -- provision of public safety I want less government telling me what personal choices to make it an individual. Congressman thank you very much sainthood both sides are open out with that premise and then -- -- Robert Reich. About the distrust in the fear of government it's at record highs right now on the recent Gallup poll shows. That about 64% of Americans including 48% Democrats feel that a big government is the biggest threat to the future of this country as compared with. When he 26%. Thinking the big business is the biggest threat to the future of this country isn't a problem. -- what's not my problem personally. And Christian I think that this country has never. In our history embraced the idea of the government we don't like to think that we want big government the idea of the government as a framing device. In terms of debates such as this inevitably sets it up. And kind of in favor of the scientists doesn't want much big government. As my debating partner just said the issue is really not so much how big the government is it's what government does it's who is government who government is for. And I think a lot of us are worried that government is doing the wrong things it is not only invading. Personal space I mean look at what Alabama. And also Arizona have done with regard to allowing police to stop almost anybody who looks -- -- -- suspicion that they may not be here illegally in this country. But we want a government that actually does protect the right things. You'd mentioned it distrust. Well people distrust government. But how many people trust Wall Street these days. How many trust big corporations how many trust the economic system a -- a pew foundation poll just done the results were just -- indicated Friday. -- said that 77%. Americans think. The economy is unfair the dice were loaded a centrally in the game is rigged in favor of the rich. You talked about what the government should be doing so let me ask you one of these issues obviously that we did debate -- only -- is. Election. Should this election is jobs the jobs crisis something -- -- -- 23 million people -- unemployed underemployed or out of the workforce. And -- during the Great Depression the government did. Create based programs to get people back to work. Why shouldn't they do that right now election that these kind of first. -- -- because it didn't work during the depression. Cardinal. Came to this new deal was to put the country back to work unemployment never came -- 14% and two we geared up to be the arsenal of democracy in the Second World War. We've had a remarkably clear test under the Obama administration. They said pass the stimulus and by 2011. The economy would be growing up 4%. And unemployment would be seven point 1% and falling I do not fault the press. For having his economic projections wrong this is a complicated society. John Kenneth Galbraith one of your liberal friends once said. That the purpose of economic projections as to make astrology look respectable. I don't. Fault the president of this I think the president for thinking that society is transparent and easy to regulate -- -- -- -- the president. For making a slew of horrible investments in Green energy and all the wrestled under another company's -- -- Fault him for that because no one expects the political class -- -- it disposing money in the most productive -- look at -- -- that because in fact one of the most successful things we've done recently. Is to keep the American -- -- industrialised pistol and it was a mistake. But there was a major liberal conservative fight about whether or not we should -- funding -- the American automobile industry. And as a result of that up in injection of funding. We have a thriving American automobile industry today that would have -- -- collapsed and it's interesting that Ford Motor Co. that was not looking for any of that money because they had. Prudently put aside some money. Ardently argued for money to go to Chrysler and General Motors. Which -- now alive and -- and have a significant appointment the American automobile industry is stronger than it's been a long time. Because -- drew -- -- intervention. Of a federal funding. As -- the stimulus. Yes they over argued. But the fact it is quite clear. Things are better than they would have been now I understand it is not a good political slogan this day. Things would have been worse without me. You don't win on that but it is clear. And I say that was politely and other forms. But it is clear that the economic intervention that we did early in 2009. Reduced the damage. The president underestimated the difficulty we had the economy but when you talk about intervention -- the intervention into the American automobile industry. Has been very successful at it -- appointment it is promoted. And kept alive an American automobile industry that would have been badly crippled that we had done. -- -- -- You actually voted for the Wall Street -- and indeed the or who they as well right on the auto they -- -- in preventing heart from going to the auto companies. Because we already put 25 billion dollars aside an energy bill which had disapproved of to -- auto companies the point I would say with the auto bailout as we should -- -- moral hazard. Now we said if if you're really big. And you dried your company into a ditch. Don't worry about it for the federal government is bailing -- the next time around no other point I would simply say as a car factual is is impossible to -- which is it would have been much better we didn't do all these things. It's not possible to disprove these things but I would simply say. When we have deep recessions in this country usually we come out of it really growing very quickly like we -- -- said -- in the eighties. This recession. We are not recovering very well kind look at health. Higher unemployment is look at how few jobs won't create -- -- eventually successful and I think we should have done a bankruptcy because what we're doing now by. Saying the bondholders. Look out if you look on the bright side of politicians in Washington. You might lose your money instead of. Miami company defendant feels that they can be reckless and be built on the matter I will I don't believe letting companies fail all the time -- -- -- -- -- tomorrow night. Can -- break out of form and agree with Paul Ryan on one very important. And I -- I think the Wall Street bailout if we had to do it again. Certainly that bailout would have had strings attached answers those Wall Street banks would have been required to help help homeowners. Would have been required to put caps on executive salaries would have been limited in terms of lobbying they could do to prevent Wall Street regulation. And now would you have voted for that Paul Ryan. With no -- there was -- I would -- different strings on -- I would have said stick to the financial services sector don't go into these other areas that you just mentioned. That was the whole part of talking wouldn't -- toxic assets not to buy stock. A -- -- we did vote for the bill the bill you described as a woman voted for. The Bush Administration decided that it was so important to get the bargain on the -- country that they are ignored significant pieces that -- and we have -- Question from our audience wouldn't go to you know on financial services good morning Larry -- professor GW's graduate school political management. My question really has to do with what has been put in place since those days to prevent this happening again. For consumers and investors to take some comfort from what we've learned in the past few years. I will be good -- -- -- if we have in fact gone from being accused of not dealing with too big to fail. To now overdoing it and we and -- being accused of being too stingy to bail the economy. The economist David simulation and -- -- there's another crisis we won't be able to bail people out. The Federal Reserve gave money to AIG to dissect and thirteen week we abolished in the bill that the longer reject. We also said that if a company fails. In the first place it is if if it can't pay its debt it is about Sarah Palin was half right which. -- -- -- -- -- -- -- -- death panels in the legislation. That we -- but they were awful large financial company. If a financial company kind of pay its debt it is abolished. Federal government can then step in and take some of the debt. But it is mandated to recover any of those debt that -- paid and they can pick and -- and pay only as little as they need to keep him from being contagion. And that is over covered not for the taxpayer but from other financial institution. Surely it should be axiomatic that if you're too big to -- you're too big to exist because the country is of them held hostage -- you. It helps -- and everybody should know bank be so big that if it -- that would be a public that is what would you get the banks do it. Below whatever threshold we what is that schedules -- you're advocating -- -- would you break up every bank in America I would know what brick up the big bad ones have an -- time. The excitement has the problem people say that you would have -- -- Canada has five banks if that it will regulate that but the problem. But don't want to Albany to what -- the end of its not that if -- too big. We we what we have stated it if you fail that's okay because that money -- is not the taxpayer money and that's what we have done -- -- say that if you fail. You're out of business we may pay some of the debt but it comes from a -- a thank -- This is -- terrific example. Of where so called liberals and conservatives actually are not on -- opposites and I happen to think. That we should cap the size of big banks big banks are bigger today. Than they were before the Wall Street bailout. I think that we ought to use the antitrust laws -- make sure that banks don't get anybody laws and bankruptcy laws as well. So where is the liberal clears the conservative position so we are. We are in the habit for all of us of being on exactly opposite sides but when you actually look underneath the surface there is much more in congress. That's all together. Partly right here is our problem with this approach we are amplifying the -- -- we were saying. That if the government deems you systemically risky your -- it's gonna get bailed out who's who what's going to hell and let me not -- -- don't -- So what are we saying we are saying to the big banks you're gonna get the capital much cheaper -- have -- and Fannie Mae and Freddie Mac to sort of two. In the small banks are going to be left on the outside -- union. We are stacking the deck in favor of the big banks instead of the small it is entirely -- totally disagree -- that -- let me magazine this at a couple things. Government needs to picking shoot we are putting more power in the hands of discretionary bureaucrats. So that they can decide how to run these big companies and just know that if if things go down. Government will bail them out relative three times it -- -- the hit apparently used a break them -- -- -- -- to lead to what -- and you do have an international competitive aspect. I don't want -- to be no American financial institution that capable of competing with -- Logan international and secondly. What we've said this. We will be regulated and the regulators are empowered. To make them -- bet that they think in a particular case it to break there -- caps on the amount of deposits that can take but finally if all that -- have to have more capital. More capital for the big -- from the small -- but if that they are put out of business they are not too big to fail we then will pick and true. To see what -- we -- pay. But the bank is done the shareholders are wiped out everybody gets fired there was no morrow had it there is no more -- matter to the yellow -- on the no benefit. In the next -- at no -- Tribune who became an Angel yeah can -- -- the legion of lawyers and compliance officers to deals all of this on the big business and on the small businesses -- put out of business.

This transcript has been automatically generated and may not be 100% accurate.

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