George Pataki is the former governor of the great state of New York. Now he’s back, he’s running No American Debt and the rumor is that he may even be considering a run at the presidency.
Last week, I got an opportunity to interview George Pataki and what follows is a slightly edited transcript of our conversation. Enjoy!
What happens if America loses its AAA credit rating?
First of all, under the best of circumstances with this President, we’re going to borrow $1.56 trillion — and that’s at a very low interest rate. If you lose your AAA credit rating, it’s going to drive up the cost of debt significantly. But more importantly, it sends a signal to the world that the United States is no longer the rock of financial stability that we’ve been now for almost a century.
Take a look at what happened to Great Britain. It used to be that the pound was the global currency and Britain was the strongest economy. When the pound was replaced by the dollar, it had terrible consequences for Great Britain that they still live under today. There are those who are talking about the Chinese currency replacing the American dollar and I don’t want to see China pass the United States.
The IMF suggests that it could happen in five years. I don’t want it to happen in 105 years. So we have to cut the size of government, we have to reduce government spending, we have to reduce the number of government employees, and we have to reduce the cost of entitlement programs that have been run through under this president.
Unless we do so, we cannot just hang on to the AAA rating that is important to every single American, whether they’re aware of that or not, but also start reclaiming confidence in the financial future of this great country.
Now do you think there is a genuine danger that America could go the way of Greece and actually go bankrupt? If so, how long do you think it could potentially take?
There is no question in my mind that if we continue on the track that Obama has us on, with trillion dollar plus deficits for the next decade, there is going to come a point where the global community says it doesn’t make sense to continue to buy these U.S. bonds when we’re not sure the government is going to be in a position to pay them off.
There are going to be two possibilities. One is they will stop buying them — in which case we will face an enormous financial disaster or two, they’ll buy them but insist on exorbitant interest rates that will double, triple, quadruple the cost of what the taxpayer has to pay for the stealing from the future that this president and this Reid and Pelosi Congress engaged in. So we’ve got to get this deficit under control. We’ve got to do it in a way that doesn’t hurt the private sector’s desire to add jobs and grow the economy because we need jobs, too. It can be done, but not with President Obama making the decisions.
Let me ask you to explain one more thing to people. This is something I think we conservatives skip over way too often. How will the average person’s life be impacted if America goes the way of Greece and simply has to pay its debts by printing massive amounts of money — because that’s what would happen, we would just crank up the printing presses. Tell people how that would impact their lives.
Well, we’ve already seen how every American family is affected when the dollar declines. We were paying over $4.00 a gallon for gas. It’s now in the high $3.00 and that has nothing to do with anything but the fact that the dollar has collapsed globally from where it was a year ago. You’re paying more for food because the price of wheat and grain and corn is much higher than it was. You’re paying more for clothing because it’s costing more to import clothing from overseas.
If we continue to see these massive deficits, you’re going to see rampant inflation and it will have a terrible impact on every American’s life. Everything they buy is going to cost more, but they’re not going to be getting paid more at work. We saw it under Jimmy Carter and if this president has his way, we’re going to see either a very real economic decline or this massive inflation over the course of the next decade or so. So we’ve got to deal with the deficit and as I said earlier, we’ve got to do it in a way that encourages the private sector to grow and to add jobs, not in a way as this president has done that discourages entrepreneurs from expanding their businesses.
Now by some counts we have $100 trillion in unfunded Social Security and Medicare liabilities. Yet, what we’re hearing from a lot of people is, “Hey, we can nibble around the edges. Maybe we’ll get rid of a little bit of waste, maybe we will raise taxes a little bit on Social Security. There is no need to make any serious changes on Medicare and Social Security. The programs will be fine and we don’t have to do anything major.”
What do you say to that argument?
It’s just not going to work. We have to get very serious about these entitlements and about the size of the government. What is really sad, John, is that the president appointed his own bipartisan commission about a year ago now. They worked very hard and came up with a bipartisan consensus that advanced $4 trillion in deficit-closing measures including reforming Social Security, reforming Medicaid, reducing the size of the federal government and other entitlement programs. He just walked away from it.
That $4 trillion itself isn’t enough. But there are other things that can be done, like repealing Obamacare, reducing the size of the federal workforce by 12 to 15 percent, things that the American people understand are necessary and need to be done that are going to really change the way people look at our finances in this country — but not with this president. I hope that we can see a Congress that this year forces the president to take action because every day that we lose, we’re just stealing more from our children and borrowing more for no good reason.
I fear that this president is simply looking to wait until after his re-election and then raise taxes across the board on the American people — and even then you can’t tax your way out of this. You’ve got to reduce the size and the cost of the federal government.
Now one political difficulty of doing this is that some of the changes that will have to be made to get the United States’ financial ship righted are going to be painful. They’re not going to be fun and you are always going to have people out there demagoguing and saying we don’t need to do anything. A lot of times people like that have won the day in Washington. How do you politically manage to make the case for this to the American people?
Well, the Demagoguer-in-Chief is Barack Obama. A year ago he was saying that what we can’t do is demonize someone who has the guts to come forward with a strong program to deal with entitlements. Then Paul Ryan does exactly that and what does he do? He goes out and demonizes Paul Ryan in a way that is not worthy of a grade B politician, let alone the President of the United States.
So you are absolutely right that if you come up with a sincere, meaningful plan, Obama, Pelosi, Reid, and the rest are going to try to demonize it. But take a look, John, at how this country became the greatest country the world has ever known. It’s because the American people have always looked to the future. It has always been about having your children lead a better life than you and having our grandchildren lead a better life than them. It’s about sacrificing today to build a better life for tomorrow. No one is asking, in my view, the American people to make enormous sacrifices today. We’re asking them to do what this country has done generation after generation, and that is not steal from our children. Instead let’s invest in our children. Let’s not borrow from the future; let’s believe in the future.
I think if you present it in a way that the American people can say, “Sure, maybe I’m not going to have this, maybe I’m not going to have something else I would love to have, but we’re part of this country and we’re part of this country’s future.” I think you can inspire them in a way that’s going to overcome the fear tactics that the left and Obama will use against those who try to take serious action about this deficit.
Now, last question, certainly you haven’t announced whether you’re going to run for president or not — but let’s say theoretically, a Tea Partier from South Carolina walks up to you and says, “If you were to run for president, why would I support you over these other guys?” If you theoretically were thinking about running, what would you tell him?
Well, first of all, John, I hope that we can get behind a good conservative we can all be proud of — and I was a little disappointed that Mitch Daniels didn’t run because he would have made deficit reduction a cornerstone of a campaign. I think whoever it is, you look for someone who not just talks the talk, but has done it — someone who has reduced the size of government, who has reduced the cost of entitlement, who has balanced the budget and turned deficits into surpluses — while at the same time lowering taxes and growing the private sector workforce by creating private sector jobs. I know I did that during my time as governor. I took a $5 billion deficit and turned it into a more than $3 billion surplus in my last year — while at the same time cutting taxes by an accumulative $143 billion.
At the end of that time, we had almost 700,000 more private sector jobs and we have reduced the state workforce by over 15 percent. So it can be done. I hope there are others out there who catch fire. If so, I’ll be proud to get behind them, but I certainly think the priority here has to be to send Barack Obama back to community organizing in Chicago come 2013.
Mr. Pataki, I appreciate your time.
Thank you, John, and thank you for what you’re doing. Keep fighting the fight; we’ve got to win this thing.
You, too. Take care.
You can hear more from George Pataki at No American Debt.