'This Week' Transcript: Crisis in the Classroom

GHARIB: And I think Richard makes a very good point, because right now the debate is, you have to go beyond the conventional cures of Fed policy and also these piecemeal stimulus measures. And this week in the Washington Post, Mohamed El-Erian, a noted economist, wrote a piece saying, you know, we've got to start thinking out of the box. Maybe structural changes that have to be made, more pro-growth tax reform, back to your education case, more support for education, job retraining, things like that.

So I think the debate is moving more in that direction. What are the structural measures that we have to take?

AMANPOUR: Can I ask you, Donna and George -- I'm going to put up this quote from Mark Zandi, the economist, which was in the Washington Post, basically talking about the government -- talking about the administration. They've played their policy hand, and they've got to hope it's good enough. There's nothing they can do to make a significant difference in the next six months or even a year.

WILL: Well, it's very difficult to go to the country, as I think (inaudible) Donna would have them do, and say the government today is dangerously frugal, because, in fact, the government's borrowing 42 cents of every dollar it's spending this year. There's no appetite in the country or in the Congress.

And, indeed, the Democrats had been planning to have an election eve Armageddon debate about extension of the Bush tax cuts, saying that this -- sort of a class war, your argument, saying that this is tax cuts for the rich. Now the Democratic position increasingly is the Bush tax cuts were reckless, the Bush tax cuts were inequitable, and the Bush tax cuts should be extended.

AMANPOUR: What do you say, Donna?

BRAZILE: The Bush tax cuts are unaffordable. We cannot simply afford another $700 billion in debt that -- and there's no evidence that the Bush tax cuts will create jobs.

AMANPOUR: But there are some who are saying that perhaps that might happen...

BRAZILE: Well, I don't...

AMANPOUR: ... that the Democrats are under some pressure to maybe -- maybe keep them on.

BRAZILE: I think they're under pressure to keep and extend those tax cuts that will benefit Americans who earn $250,000 or less, but there's no evidence that giving rich people more money will help create the economic conditions that will put more people back to work.

AMANPOUR: Let's -- go ahead, Richard, and then we're going to move on to the (inaudible) which is tightly connected.

HAASS: Exactly. But we also need to think about not simply the tax cuts in isolation. They've got to be married to, among other things, spending cuts. Look at what Germany is doing. They are growing now, in part because they are carrying out economic policies of some responsibility and some restraint.

The international markets will not fund this level of American profligacy forever. As bad as things are now -- I hate to say it -- they could get a lot worse. We simply will not be able to sustain this trajectory.

AMANPOUR: The difficulty is, of course, very significantly, you know, senior economists differ. I mean, some are saying exactly the opposite, there needs much more ease or stimulus, and only then start with the deficit. So I think this for a lot of people is very confusing, that economists at the top, top levels disagree.

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