Chewing gum and walking: Preparing for the long term, and spending now

>> we're looking at reagan international airport . a beautiful sunrise. it will be warm today. bill karins says it will get pretty ugly. welcome back to " morning joe ." we have sam stein and steve rattner. joining me at the table in new york is "new york times" columnist, gail collins and associate editor of the " washington post " eugene robinson . also the bbc's katty kay . it's great to have all of you guys with us here today. thank you so much. steve rattner, this time yesterday we had paul krugman on the show. you actually said in an e-mail talking about your concerns krugman suggested we don't have to worry about long term debt so much, deficits, long term debt number 5 , maybe number 6 on the list. you took exception to it and said denying the coming debt was like being a climate change denier.

>> i think actually mika started that analogy and paul krugman basically said the opposite. to me, being a debt denier is the same thing as being a climate change denier. we're putting tons of carbon in our atmosphere we have to deal with and incurring billions of debt everyday we have to deal with. they're the same problems. do you recognize they're problems and deal with them or sit and let them fester until something bad happens.

>> what do you say about what paul krugman says, it's a problem but it won't be a problem until 20 years from now and let's not deal with the problem.

>> in the order of magnitude we know the problem will be worse. about 60 trillion dollars of unfunded liabilities. the longer you wait the tougher it is. i get the argument the jobs in the economy are still weak and we need to deal with that. that's fine. you can have responsible proposals for dealing with that. larry summers put forward responsible ways to deal with that but we need to put in a framework how we want to deal with it. that's what bothered me that krugman rejected all that and said wait until we get out there and then see what the problem is. like waiting to see after we put a lot of carbon in the atmosphere and see if we can still breathe.

>> on behalf of paul krugman , he's arguing against people sitting around hysterically in washington nothing matters but the debt. nothing matters but the debt. he's arguing long term debt matters long term but right now we have to fix the economy and get the economy stimulated. there's nothing more dangerous than to talk about your first priority to chop away at the budget when you really need to gin up the economy.

>> doesn't he ignore one of the realities in this discussion long term debt plays a huge role in companiy ies hiring people today . they worry about the debt about the national debt and uncertainty of it all and not putting people on the payrolls.

>> the uncertain plays a role and size of the debt plays a role. you could have somebody, i think richard haass , interest rate reaction, in fact, interest rates have been moving up a bit the market says enough. gail, i don't disagree with you or him on this point instead of saying long term debt is a problem and we need policies to deal with it but we need something short term, larry summers more over saying let's not think about the long term entitlements until we get there and solve the short term. at the very least, you have to do both.

>> you have to give credit, people are worried, screaming my god, inflation, loss of confidence, all these things and they haven't happened. they haven't been the problems. the problems haven't been inflation, the problems haven't been loss of faith in our credit, the problem has been a lack of juice for the economy. so, just, my guy, pull paul --

>> there you go. the problem is, richard haass , president of the council on foreign relations said it's not a problem until the day it is a problem and it doesn't just sneak up on you, you fall off a cliff. the entire economy goes down with it. we're not saying that's going to happen in the next year, five years or next ten years even. we don't know when it's going to happen and why we should prepare for the future. one of the things frustrating for me, willie geist , you and i, you know what we love to do at the holiday inn on 57th and 11, we love getting our cigarettes out and smoking a couple cartons and quoting great authors. i remember you told me it was f. scott fitzgerald the first test of a first rate intelligence is someone that's able to hold two opposing ideas in their mind at the same time and continue functioning. you remember when you told me that a couple weeks ago when we were watching honey boo-boo?

>> i think that was a lou holtz quote but go ahead.

>> i think it was f. scott fitzgerald . the thing that drives me crazy in this debate. i repeat it all the time, hoping somebody on twitter is going to get it, and they're just not. unfortunately, a lot of politicians in washington, i do agree with paul on this, can't chew gum and walk at the same time. you can do that and we have to do two things at the same time in this country and we have to take care of the long term debt. when do that, that is not what david cameron is enacting in great britain , enacting austerity measures now and slashing spending now. we're talking about the long haul. for some reason when you talk about taking care of things 10, 15, 20 years from now, people will raise their arms and scream, no, we can't do that. that's austerity. you can't cut spending while in an economic downturn . of course, we can't. we can plan for the future while spending some now.

>> it seems to me, sam , the real problem is people don't just focus on this during a time of economic crisis . people in boom times you can't cut social security and you have to protect medicaid at all costs.

>> in the same climate we have this discussion in boom times and the wage gap an under-reported story, much closer. economic growth , job growth is a measure because you have people paying higher percentage taxes as long as they get higher paying jobs. not so much we have a debt problem, we have a health care spending problem. a lot of debt we incur is because of out of control health care costs. 92 sam , we do have a debt problem along with the health care problem. we have a debt problem. not the health care costs are the primary contributor to the debt problem we have. what we're lacking in this conversation is any time people try to touch health care costs in long term, this is the same on both sides, everyone is culpable here, there is a huge hysterical political reaction . it becomes almost impossible have a sustained in civil conversation how to reform medicare because you will get demonized.

>> moy problem with that argument, gene robinson , every time you talk about numbers out there, erskine bowls, former chief of staff of bill clinton and the joint chiefs chairman, a lot of people in the middle, concord coalition , they say medicare and medicaid is going to cause an economic collapse if we don't take care of those programs in the long haul.

>> what should we do?

>> when you bring that up, people say, you know what, it's a health care problem. let's fix health care and all that will magically go away. we as a country don't do good jobs fixing health care . look at '93 and '94 and 2009 and 2010 . we don't -- we can't reform such a complex system in a way that's going to turn things around on a dim dime.

>> if you don't -- you can't turn it around on a dime if you don't do something about medical care costs long term, the costs, not just who pays for it. ultimately, don't we still incur the responsibility to pay for that stuff? it's not being paid through the existing programs now i can pretty much guarantee there will be a new program of some sort in which we still pay some of these costs because i don't think they're all going to be offloaded onto the elderly. i don't think that will happen. the costs are not irrelevant here. they are the main target. the question, you think about long term debt, what do we do? what's the goal? stabilize the debt at a certain percentage of gdp? 70% or whatever? that would be a certain set of measures. then, when you're talking about medicare for example, does it make sense to raise the eligibility age? a lot of people would say, no. it doesn't in that for all its problems, medicare is actually arguably lower costs than having these people try to get insurance in the market and subsidizing them somehow. why are you taking people out of a system that is arguably more efficient than the rest of the system? so just saying it's not easy to figure out what to do.

>> it's not easy. unless erskine bowles and simpson and everybody else , katty kay , is misleading us, they're on a wild ride, we're facing a crisis of great proportions when it comes to entitlement spending. i wonder if we end up where great britain is now where we're left with little choice but to make huge cuts at the very ends of the day instead of planning ahead. we have a little bit of space.

>> paul krugman said, we have a little bit of breathing room than european countries . that runs out at some point.

>> you do have more space and the interest rates are lower and the american public aren't feeling the pain of your debt than under george bush senior when interest rates were higher and markets can look at politicians and say we don't believe you have the capacity to deal with a long term problem. they can turn on america in a dime and send interest rates up and we would be talking about the deficit a lot faster. the route great britain has taken is tricky looking at a triple dip recession because of austerity programs and haven't actually brought down the debt as much as a forecast. i agree with sam , the long term problem is health care problem specifically elderly problem. at some point, america has to face up to the fact you won't have the services for the elderly you always had unless you raise a heck of a lot more revenue. there has to be some rationalization of medical services. paying doctors to give services has been an inefficient way managing your health care system . that has to change in the long ru run.

>> we're not just talking about, not like it's static, not like the same number of seniors today five years from now or 10 years from now.

>> it will get a lot worse in 20 years.

>> what i think a lot of americans don't understand. we have willie geist , today, we have three people working for every one person on social security and medicare . it used to be 15 people working for every one person on social security and soon it will be two people working for every one person on medicare or social security .

>> it's completely unsustainable.

>> can i leave with one point in my mind, we are stealing from our children, basically taking out of the system everyone close to retirement a multiple of everything put into the system. that becomes debt and that has to be paid by our children. we can keep doing that but doesn't feel right to me.

>> you have been writing about hillary clinton .

>> talking about old people, coming to me --

>> and they will retire the remainder of her 2008 campaign debt and sit down interview with " 60 minutes ," what do you make of this, not the four years as secretary of state and the way she's being thrown out of office with rose petals by the president.

>> she always does this. two weeks ago, disaster after disaster, blood clots and hearings. and now it's fantastic. i think he's grateful that she was not only willing to work for him in the administration but is in the administration, she's such a hugely high profile person but she's been a real team player. she hasn't given him any grief. she's been a big help. she's worked like a maniac in his interest. she's never crossed him over. she's also brought all that incredible good will that the clintons now bring, so much good will that paul ryan this week is running around saying if only clinton were in office, we could get all these things taken care of. it's incredible. she's on another hillary clinton roll.

>> do you think there is an appreciation for them, probably the two most scrutinized people, lives written about incessantly and relate to each other in a way you can't relate to any else.

>> that's right. having never experienced it, i presume.

>> do you see any way hillary clinton can't run for president given her standing while she leaves office her standings higher than anybody in politics, how could she not run?

>> she could not run if she doesn't feel up to it. that doesn't mean she feels ill. that kind of campaign, as everybody knows , is a two or three year marathon killer. if she simply decides that's not something she's prepared to sustain, that's a good answer.

>> i want to get to gene's column as well writing in the " washington post " about the republican party 's lost ways. republicans shouldn't worry president obama is trying to destroy the gop . why would he bother? the party's leaders are doing a pretty good job of it themselves. i have to wonder if the gop is getting tactics and messaging part right. michael steele served as party chairman when the republicans won a sweeping victory in 2010 he was promptly fired. reince priebus presided over the 2012 disaster he was give ainu term as chairman. but no matter who's in charge the gop wit have a tough time winning elections until it has a better understanding of the nation n. if boehner is worried about being swept into the dust bin of history , he and other republicans need to put dunn the broom.

>> having lost 71% of the latino vote isn't this a conscious effort on the part of lindsey graham and marco rubio , how they have to look at things.

>> absolutely. and the subject of immigration is happening awfully fast. these were voices telling the party months ago, this is a threshold issue for latino voters and they wasn't even give us a hearing unless we're less hostile on the immigration issue. i do think it goes beyond that. if the republican party is going to connect with the nation on a national level the way it would like to, it has to, to win the white house , it will have the do more than throw a bone on immigration, it will have to look at the country. which has changed since a lot of senior republicans have paid attention and see how it's changed and understand americans today and what they believe about various issues, like abortion. like the proper role of government and the relationship between government and the individual. this is not your grandfather's america yet i think it's your grandfather's republican party .

>> certainly not even your father's america . things have changed so quickly, gene, over the past five, six, seven years, katty brought it up earlier, the republican party has changed even more quickly over the five, six, seven years and said this morning if mitt romney had the same number of latino numbers percentage-wise george w. bush had in 2004 , he'd be president romney right now. this republican party , whether you talk about immigration, assault weapons, a variety of issues, seem to still be focused how things were in 1994 .

>> if you lose latino voters for a generation and lose asian- americans the fastest growing minority group in the country voted 73% for obama. where did that come from and that's that about?

>> a great question. something the party needs to be thinking about. gene, thanks so much as always. greatly appreciated. we'll be reading your column in today's " washington post ." gail, stick around. when we come back. a political headline calls them immigration's odd couple, two men leading the bipartisan effort on immigration reform . senator john mccain and chuck schumer next on " morning joe " brewed by starbucks.