Simpson, Bowles and the fate of a grand bargain

>>> 47 past the hour. joining us now, senior national correspondent for bloomberg business week, josh green . josh wrote the magazine's latest cover story on the mission to address the country's debt. i like that picture. good to have you on board this morning.

>> these guys are heroes of a lot of people in washington corridor and yet there are some on the far left who just loathe them.

>> far left , far right, and there are plenty of people in congress who don't think a lot of them either because they're not picking up and passing the plan they wrote. more story looks at the two-year odyssey of simpson and bowles . they've been on the road like the grateful dead touring the country day after day after day .

>> are they discouraged?

>> i think they're frustrated.

>> have they started dropping acid?

>> i think simpson has been dropping acid for years listening to him talk. i don't know about bowles . i think they are frustrated. they thought the big movement -- simpson told me he thought the big moment for this would be the fiscal cliff and that would be the forcing mechanism that would allow this grand bargain. both sides say they want but haven't acted on.

>> there's nothing forcing these people to be responsible.

>> krugman saying, look, this is just not the right thing at the right time. we don't have growth in the economy. these guys are scare mongers. these guys are not dealing with reality of once you get an economy moving then you can deal with it.

>> i think that's basically right. if you look at what's happened over the last two years, deficit is shrinking now. tentative growth. economy shrank last quarter. you don't want to impose austerity or something blunt like sequester. even krugman would agree with this. you do have a problem of rising medical costs that will eventualeventual ly stifle the economy if it's not dealt with. do you deal with that now?

>> andrea, would there be an impact if the president went to capitol hill and walked in there and said come on or is that just completely out of the question and only happens in the movies?

>> it only happens in the movies and he ought to do it. michael douglas did it in " american president ." why not? somebody has to break through this impasse and that's what our nbc news/" wall street journal " showed this week. the president is not losing as much ground as republicans because he came from a higher base and they are blaming congress more than they are blaming him, and the white house knows this everyone is going to be blamed eventually and the mud is going to spatter on both sides.

>> that's true.

>> josh, we have another crisis around the bend. the sequester is going to happen tomorrow and then march 27th we have to figure out how to fund the government. when is the time? we keep asking this for a grand bargain. if it's not the fiscal cliff, if it's not the debt ceiling, sequester tomorrow, government running out of funding, when does that moment come if it ever does?

>> what simpson and bowles has done is come out with a new plan meant to replace the old one and deal with the sequester. it's twice as big. $2.4 trillion. it's phased in gradually so you don't get that hit and drag on growth all at once. there isn't any indication that anyone in congress is interested in that. i think and i write in this piece, i say if we don't get this grand bargain in the next six to eight weeks using the forcing mechanism of the sequester, it's really hard to see how anything is going to happen. eventually washington turns to immigration to gun control to midterm elections and then you really can't have it.

>> we wait until the markets collapse?

>> markets don't care. they're up. defense stocks like we hear it will be cut so much and it will be the end.

>> care about profits. dividends. balance sheet is great.

>> the market doesn't care.

>> no. the market is actually saying washington is a big distraction. we got the tax rule. capital gains . dividends. where they fit. the american people for the most part don't have a tax increase. left behind . we don't care about sequester on wall street . not at all.

>> there is an answer on this. you can impose cuts to phase in gradually. have cuts at the back end. you can do things that wall street would like and that would help the deficit. there just doesn't seem to be enough trust on either side. republicans don't believe those cuts if they are put in future will come into effect. democrats don't want austerity now to be a drag on the economy. you end up with a stalemate.

>> thank you for that. totally depressing. jim cramer , thank you for being with us.

>> thank you.

>> gun control . thank you.

>> you were great.

>> insane. these people saying we can't do anything and that we're helpless. are we really helpless? is that what extremists think, we can't protect our children? i'm pro gun. like i say all the time, i personally think new york not allowing me if i want to carry to be able to carry.

>> hunting, fishing, great. nothing to do with hunting. i like hunting president .

>> background checks to stop felons and the mentally ill from getting weapons at gun shows.

>> it's really not enough.

>> it's not enough. so this argument is that's not really enough. okay. if that's in the enough, great. are you telling us we need to have a national registration system. background checks aren't enough. do you support registration? they get you coming and going.

>> you have a right to it. you shouldn't have a right to an automatic weapon . you have a right to a weapon.

>> we'll be right back. josh is sticking around. you should too. coming up next, former white house senior adviser david axelrod coming here tomorrow and he's going to threaten all of us. we're nervous about that. i love this guy. senator russ feingold is going to be here.

>> celebrity chef tom colicchio .

>> is he going to bring us yummy things?

>> we'll be right back on " morning joe ." stick around. [