This is a rush transcript from "Hannity," February 17, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Welcome to the new America, everyone.

Now earlier I spoke with former speaker of the House and also the host of the documentary "Ronald Reagan: Rendezvous with Destiny," Newt Gingrich.

I like the term that John McCain used when he used the term generational theft in describing what this spending bill is all about.

What are your thoughts on it?

NEWT GINGRICH, REAGANDOCUMENTARY.COM: Well, it's one of the reasons I'm particularly disturbed because my two grandchildren who are 7 and 9 don't deserve all the debt that this Congress and the last Congress have piled on them, and I don't see any indication that it's going to stop with Mr. Geithner's promise of $2 trillion in loan guarantees.

Video: Watch Sean's interview with Newt Gingrich

There's something wrong about trying to solve our problems on the backs of our children and grandchildren. Of course, you have young children so you know the same thing, Sean. This is just wrong.

HANNITY: Well, you know, you were there when Bill Clinton said the era of big government is over. The end of welfare as we know it, you know, all this happened, you know, in 1996 when you were there, whether you were, you know, the speaker of the House of Representatives, and you know, I'm saying this is the European socialist act of 2009, end of capitalism bill of 2009.

Is America now a socialist country? Is that a fair statement?

GINGRICH: No, I think — in fact, America is a center right, work ethic, small business, self-employed, get up every day and earn a living with a political elite who are pretty close to European socialists in their attitudes, and pretty close to big city machine politicians in their approach to things.

When you have a U.S. senator, for example, calling business leaders idiots, when you have the vice president of the United States suggesting they be thrown in jail, when you have the kind of attitude we saw in this recent bill, setting standards of salaries by people who don't have a clue what they're doing, I think that it's a very dangerous invasion.

HANNITY: Well...

GINGRICH: ... of the political class against everybody who works hard and earns a living.

HANNITY: Maybe I need to restructure this question a little bit here because I agree with you, I think we're still a center right country, but the American people did elect Barack Obama who did say he was going to spread the wealth with Vice President Joe Biden who said it's our patriotic duty to pay more taxes.

Why should we be surprised that they followed through what their promises are? Back door national health care.

GINGRICH: Well...

HANNITY: Go ahead.

GINGRICH: Remember, they campaigned on 95 percent of the American people getting a tax cut. They campaigned on real change, but, in fact, Secretary Geithner represents more of the Bush-Obama process, and I lump the two of them together.

On this economic cycle starting a year ago were the stimulus package which failed, and then a housing package in the summer which failed, and then the Wall Street bailout in the fall which failed, and then Chairman Bernanke's $4 trillion pledge which has failed, and now the Obama spending bill, $780 billion, which I predict will fail, and now Treasury Secretary Geithner's promise of $2 trillion.

What you have is a continuum of the political elite taking money from everybody else in America to prop up their friends, and it's a bad idea.

HANNITY: Well, with all the doom and gloom rhetoric that was used — this is a catastrophe, we may never be able to recover — certainly a lot of fear tactics were used by the — against the American people, but obviously, Wall Street, you know, with a few ups and downs, by and large, has reacted negatively to Barack Obama's presidency and his economic plan.

I mean are we headed for a lost decade as Japan did? Are we headed for stagflation as Paul Ryan suggests in The New York Times in an op-ed earlier this week?

GINGRICH: Look, I think that the 2010 election may become one of the most important in American history. Unlike the Japanese, we have a very aggressive and vibrant, competitive political system. We have another election cycle coming up awfully fast, and I think that the American people are very tough about these things.

If they watch the failure continue to grow and compound, just as they punished Republicans in 2006 and 2008, they're about to start turning an eye on the Democrats, and when they look at, for example, $30 million to save a mouse in San Francisco, as part of the stimulus package.

HANNITY: Yes.

(LAUGHTER)

GINGRICH: $2 billion for David Oby's son, $8 billion for a high speed rail to Las Vegas for Harry Reid. If those aren't set-asides, I don't know what you'd call them.

HANNITY: Well, in many ways, I'd argue, Jimmy Carter paved the way for Ronald Reagan. The push for nationalized health care paved the way for the Gingrich revolution in 1994 that I witnessed up close and personal.

How do we get to a point, though, where we can have the largest transfer of the economy from the public sector to government and not one representative reads the bill, Mr. Speaker, not one, prior to voting on the bill?

GINGRICH: Well — look, no, because you've got a machine running the Congress, and that machine said pass it now and read it later, and the machine won. Every Republican in the House voted no. All but three of the Republican senators in the Senate voted no. If those three senators had stuck with their party, that bill would still be tied up in the Senate.

I was very disappointing to see those three senators abandon the rest of their colleagues in order to pass a terrible bill. The fact is that this bill will, in fact, come back to haunt the people who voted for it. But you know, as you know, Callista and I just released a movie for Citizens United called "Reagan: A Rendezvous with Destiny." When you go back and watch Jimmy Carter talk about doom and gloom and loss of confidence, he sounds a lot more like President Obama than President Obama sounded like that candidate last year who was optimistic and positive.

HANNITY: It's a great point. As we look, though, at this early stage in the Obama presidency and all the nominees that they've had, all the problems that they've had, broken promises as it relates to lobbyists and transparency, and now this, with all this pork stuffed into this bill, do you think he runs the risk of having been damaged this early in his administration politically?

GINGRICH: Look, I think people right now are very disappointed. They were promised five days in the New Hampshire campaign by candidate Obama. They didn't get even enough time for their members to read the bill. They were promised a tax cut for 95 percent of the American people. They were not promised a gigantic big government spending bill like this.

I think that they were not promised that they would move under the most partisan chief of staff since H.R. Haldeman ran the White House for Richard Nixon. They were not promised that they would see the kinds of thing we've seen with — you know, a treasury secretary who can't pay his taxes.

So I think, I think the average American right now has not yet made a decision, but my guess is that the average American is much more disappointed in the first couple of weeks of his administration than they had hoped to be back on the inaugural day when things looked so positive and optimistic.

HANNITY: Mr. Speaker, thank you for being with us tonight. We appreciate it.

GINGRICH: Thank you.

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