'This Week' Transcript: Rep. Paul Ryan

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AMANPOUR: But what about the figures, the basic arithmetic? I mean, it is complex. You go to these town hall meetings, and the presentations are complex. And even people with vaguely conversant views on all of this find it difficult to understand. Is there a way to figure out what the actual math is without entering political and ideological debates? Is there a way to balance this budget, to reduce the debt, to get a hold of it without sort of hewing to very different political views?

FREELAND: Well, I think it's always going to be a political debate, but what I think is really missing in both the Republican and the Democratic approach right now and is really an example of political cowardice is taxes.

You know, and we heard in your interview, Christiane, Ryan saying, well, you know, this is about cutting spending. It's partly going to be about cutting spending, but it is also going to be about raising taxes. And that's the thing that I think no one has the courage to talk about.

And it's partly going to be -- I think there should be more taxes on the very rich. They're doing incredibly well in this economy. But it is also going to be about more taxes on the middle class, including consumption taxes.

AMANPOUR: Well, that's interesting. I want to get to consumption taxes. But, David, Paul Ryan says that people see tax hikes as sort of a fairy dust that will solve everything. Is either party dealing with the tax issue in a way that could actually solve something?

STOCKMAN: No, I think both parties are delusional in thinking that this is a long-run problem. The Ryan plan gets the balanced budget in 2030, the fiscal hereafter. We have a here-and-now problem.

This debt that we're issuing every day, $6 billion a day, is not being bought by real investors. It's being bought by the Fed and other central banks around the world, and they're going out of business in June. The Fed is stopping the bond-buying. QE2 is over. The Chinese no longer need to buy, and the Japanese have their own problem.

So once we have to sell the debt to real investors, interest rates are going to start rising and the crisis will come immediately, in the next two or three years.

Now, what does Ryan do in the next two or three years? Nothing. He cuts $600 billion or $700 billion of spending, mostly from a small part of the budget, discretionary and the safety net, leaves Medicare totally untouched for 3 years, leaves Social Security totally untouched for 10 years, leaves defense totally untouched for the next 3 years, and then, after cutting that small amount, gives it all back by extending all the Bush tax cuts that we can't afford.

Now, that's getting nowhere. In three years, he does not cut one dime from the debt.

FREELAND: Yeah, David, I have a question for you. You worked for Ronald Reagan. Do you think that America, the American economy -- so you're like a red-blooded capitalist -- could it sustain higher taxes than it has now?

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