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Bulls & Bears
This week Brenda Buttner was joined by Gary B. Smith, Tobin Smith, Eric Bolling, Pat Dorsey and Steve Murphy.
Greek Violence: Wake-Up Call for Big Gov't Spenders in D.C.?
Eric Bolling, Fox Business Network: The U.S. and Greece are far too similar. We're almost $13 trillion in debt and President Obama wants to spend almost $4 trillion more over the next few years. Since he became President, we've lost 3.7 million jobs. I know we gained 290,000 in April, but that's what happens when you start to come out of a recession. When you spend another $4 trillion, borrow it from China and against our kids' futures, you're in serious trouble. That's the sort of the stuff people in Greece should be protesting right now — the fact that the country has sacrificed its future.
Steve Murphy, Democratic Strategist: We are nothing like Greece. But we are fighting two wars without paying for them. We started the war in Afghanistan almost nine years ago, while cutting taxes for the wealthy at the same time. That's fiscal idiocy. We are nothing like Greece, though. We lead the world in science and technology, Greece leads the world in riots. Greece is a relatively very unproductive economy, while ours is the most productive in the world. The U.S. has huge economic assets. The two countries just aren't comparable.
Tobin Smith, NBT Research: Our welfare state has doubled in size over the last 18 years, and we're still on a rate to keep increasing it. In Greece, they had to get rid of the national health plan. Why? They couldn't afford it. Currently, our debt is about 90 percent of GDP, and that debt load is projected to hit 120 percent in a few years — where Greece is at currently. That clearly has bad implications for our future.
Gary B. Smith, TheChartman.com: Obviously, the U.S. is going to have to continue to be productive. We're just not absorbing new workers into the job market very well. With all the money we've spent, I'd have expected to see some sort of positive movement in the unemployment rate. Instead, 10 percent is essentially the metric the Obama will measure the unemployment rate with. And it's true we aren't properly accounting for the Afghanistan and Iraq wars, but President Obama is just continuing what President Bush did during his administration. That said, I don't think we're like Greece, but we certainly seem to be doing our best to head down that road.
Pat Dorsey, Morningstar.com: This is an absurd comparison. The U.S. does spend too much, and our spending is out of control. But comparing the U.S. and Greek fiscal situations because our debt levels are similar would be like comparing the U.S. with Bermuda because we both speak English. The major difference here is that Greece doesn't print its own currency — we do. As long as you can print your own currency, you don't default on debt. You may have to deal with inflation, but that's not as big a problem as defaulting on your debt.
First the Stock Horror, Now the Hearings; Which Is Worse?
Tobin Smith: Any new regulations the government puts in place due to the market plunge on Thursday will reduce the return you get on investment and your 401(k). If this inquiry by the government follows the script we've seen recently, there'll be like 50 new commissions and 18 regulatory agencies that come out of this thing. That will add to the cost of trading. When cost of trading increases, that hits your 401(k), and it's something you should b worried about.
Steve Murphy: I don't think Congress hates Wall Street. A lot of Democrats including myself like Wall Street, but we want to see it operate productively. We have to investigate what happened in the stock market Thursday. People thought they were buying stock at a good price and found out that just wasn't the case. The equity markets are where we'll raise money to grow the economy and create jobs, and making sure it operates properly is essential.
Eric Bolling: It's rare for Congress to have a hearing and actually get something out of it that makes any sense at all. The Congressional members sit at those hearings, read prepared questions, and don't understand what's going on anyway. But let them have their hearing, just don't change the rules and implement unnecessary and undue regulation on a market that needs less regulation. Otherwise, businesses are going to go overseas.
Pat Dorsey: This isn't Congress' role. It might be one of the regulatory agencies. There are like 40 different rumors out there about what happened. But we have to remember 70 percent of trades happen off exchanges. It would be beneficial to move these trades to an exchange where they're visible and transparent. As they say, sunshine is the best disinfectant. I'm okay paying a penny more per trade if it prevents another day like Thursday.
Gary B. Smith: I think what we saw yesterday is hopefully a one-off event. But it's the natural evolution of things. But you know, I'm sure Congress is thinking we should go back to some form of the old days where brokers made $100, $200 commissions and stock auctions happen under the old oak tree on Wall Street. These latest means of trading are the natural evolution of the markets. Congress inquiring into this would be like me questioning Steven Hawking about physics. They just don't know how this stuff works.
New Rallying Cry to Legalize Illeals: Do it for Our Debt!
Tobin Smith: This plan is a bust. Illegal immigrants do pay into Social Security, but that doesn't do anything for the deficit. When you legalize illegal immigrants you make them eligible for food stamps, for Medicare, Medicaid, and other government benefits. This would be an absolute nightmare for the federal government and state governments. It would cost far more than it would save.
Steve Murphy: This would not take care of the deficit, but it would be great for the economy. We have about 10 million of the hardest working, most productive workers in this country involved here, with 75 percent of them working with a fake Social Security number. When that's found out, they lose their jobs. It's highly disruptive to the contribution they make to our economy. Legalize these immigrants, and get these problems solved.
Eric Bolling: The total number of illegal immigrants is probably closer to 16 million. There's no doubt they work hard. But there are Americans who are looking for jobs, and they'll gladly take these jobs. And better yet, Americans will actually pay the state and local taxes on those wages. It's Americans and legal immigrants who need and deserve these jobs.