'This Week' Transcript: Holder and Giuliani

TAPPER: I want to switch to another topic now, and that is, in addition to today being Mother's Day -- and happy Mother's Day, by the way -- today's also Europe Day, and Europe is going through quite some problems right now when it comes to the Greek debt crisis.

George, you've wanted to talk about this for a long time, and I've resisted, and I apologize for that, but why is it, do you think, that we don't hear much from policymakers, from the media about the Greek debt crisis? Or, you know what? Forget that question. Why should the American people care about this?

WILL: Because it's an early heart attack that ought to alert us to the fact that we could have a bigger heart attack. Greece is not too big to fail. It has a GDP the size of a Dallas-Fort Worth metroplex. It's too connected.

What we are doing, and the Europeans are doing, and Americans are doing through the International Monetary Fund, is we're bailing out the banks that have -- particularly the French and German banks -- that have bought a lot of Greek paper.

Now, the fact is, the United Kingdom has a worse fiscal picture. Los Angeles has a worse fiscal picture.

STEELE: California has a worse...

WILL: California in general, New Jersey, Illinois.

TAPPER: Worse than Greece?

WILL: Yes, in some senses. What we're doing at this point is we're seeing the collapse of a model, a welfare state model, that says you can constantly enlarge government on a narrower and narrower tax base, producing more and more people dependent on the government.

What they said in Greece, the caption under the pictures, it said, "Anti-government mobs." They're composed of government employees, these anti-government mobs, fighting for their entitlements.

TAPPER: And, Shelby, you know, one of the things that I thought was interesting about these -- about these mobs protesting and rioting about austerity cuts in -- in -- tax increases and service cuts, is that it's really not that difficult to imagine the United States in a similar position and people getting angry about it, not just government workers, but conservative activists, liberal activists, everyone getting angry about it, because we, too, want to have our cake and -- and eat it, too.

STEELE: There's always this impulse in government to do the good, to do something that -- and make sure everybody, every human being alive in the -- in your country has health insurance and so forth. And it's fine and -- fine to do the good, but the only way to do it is to also grant people -- expand the idea of entitlement and make people actually feel, as a part of their identity, that they are owed something.

And then as -- as time goes on and you -- as George says, you -- you -- they call this a debt crisis. It's really an overspending crisis, where you're -- you're just constantly finding -- trying to do good things, expanding entitlement. You get to a place where it starts to collapse. California, my state, is in dire straits right now for this. And we have some of the similar people rioting, students complaining about the UC system cuts and so forth.

There's no money. There's just no money. So it's not as though somebody is doing something evil or oppressive. The state just has no money.

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