• With: Art Laffer

    This is a rush transcript from Your World," November 28, 2013. This copy may not be in its final form and may be updated.

    STUART VARNEY, GUEST HOST: Meantime, it`s looking like we are stuck with a turkey. The president has just two days to whip his health care web site into shape, but it`s a tall order.

    And Art Laffer says it`s time to dish up a dose of reality.

    All right, Art, a lot of things are hanging on that November 30th deadline to get that web site fixed. What`s the issues here? What`s at play here?

    ART LAFFER, FORMER WHITE HOUSE ECONOMIC ADVISER: You know, picking on one thing like the November 30th deadline is sort of like saying, but what else is wrong with Mayor Rob Forb -- Ford of Toronto?

    (LAUGHTER)

    LAFFER: You know, this is a turkey, and you`re -- you`re very correct.

    It`s got so many problems, Stuart, that, you know, picking on this one, that one, or the other one, it is an untenable program that has to be repealed.

    And we`re not -- this isn`t going to be the end of the story. It`s going to go on throughout next year, and on and on and on, until it`s repealed. It can`t make it. You can`t give away very valuable resources for free, and expect the system to stay solvent and expect people to be happy.

    VARNEY: Yes.

    LAFFER: It just doesn`t work that way.

    VARNEY: But I have got -- I have seen a lot of Senate Democrats say, look, if you can`t fix this thing and fix it properly by November the 30th -- and they can`t -- I don`t think it`s going to happen.

    LAFFER: Of course not.

    VARNEY: It will not be fully functioning.

    LAFFER: No, not November 30th next year either.

    (CROSSTALK)

    VARNEY: But the Senate Democrats are saying, if that happens, if you can`t fix it, then we really want to delay the individual mandate for a full year.

    And that is not quite the same as repeal, but it certainly guts a key provision of ObamaCare.

    LAFFER: It certainly does.

    And, by the way, they should do that. They should do all sorts of things. They should clearly also make it applicable to the White House, White House staff, and congressional staffs as well.

    I mean, why should they get away with not having to bear these consequences? But they always do it this way. But, you know, you`re right, Stuart. It`s going to keep on getting worse and worse and worse and worse as we go on, until you recognize, you know, you really can`t have a program where you give away health care benefits for free, and then expect people not to overconsume them, not to have everyone gaming the system.

    It`s exactly like Jimmy Carter`s energy plan. If you remember that in the `70s, Jimmy Carter tried to take over the energy industry. He put on the wellhead price controls. He put on the excess profit tax. He had the gas lines all over the place. He had this 55-mile-an-hour -- and it collapsed under its own weight and it brought Jimmy Carter down with it.

    This one is going to bring Obama and all these Democrats who've supported this, because it doesn`t work and it never will.

    VARNEY: I have been using some very rough numbers. And those rough numbers are as follows.

    Approximately 80 million to 100 million Americans will pay more for their health care, and that 80 to 100 million people will be paying for 40 to 50 million people who get it for free or with a big subsidy.

    LAFFER: Exactly, exactly.

    VARNEY: And that`s an income and a wealth transfer scheme masquerading as a health care plan.

    LAFFER: Exactly.

    I mean, you can`t increase the demand for a product and reduce the supply, because they`re going to try to take it out of doctors` hides too, you can`t do that without prices going way up everywhere, without this transfer going on, and then no one gets anything.

    VARNEY: OK.

    LAFFER: And then you have a collapse in the system, which is where I am very afraid, just like it was with energy in the `70s.

    VARNEY: So that`s what you`re forecasting?

    LAFFER: I am.

    LAFFER: This thing implodes from within. It`s either going to crash, implode, or it`s going to be repealed, but it ain`t going forward. Is that your...

    (CROSSTALK)

    VARNEY: ... point?

    LAFFER: No, it will not go forward. I guarantee you that.

    You can`t fix this turkey, to use your phrase, if I may.

    (LAUGHTER)