This is a rush transcript from "On the Record," August 20, 2013. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Donald Trump has a warning for Governor Chris Christie. Why is "The Donald" sounding the alarm? That is just one of the questions we asked Donald Trump earlier tonight.


VAN SUSTEREN: Donald, nice to see you.


VAN SUSTEREN: OK, Donald, in my prior life as a lawyer, I did a lot of poverty law and I have a lot of attention on trying to figure out that - - you know, the horrible problem, the scourge of poverty in this country. And I'm curious, how has the Obama administration done, in your opinion, on trying to reverse this horrible trend?

TRUMP: Well, you really have to give them an "F" for failure because the fact is that there's no incentive to work. People are getting welfare checks that are bigger than what they could earn, and people are just saying, hey, I'm not going to work. There's no incentive, absolutely. So it's a disaster. You look at New York and various other place and the numbers are just atrocious.

VAN SUSTEREN: Don't you think that the Obama administration or anyone is looking at the numbers would be horrified. I know I've heard the numbers on food stamps, and if people really need food stamps then we ought to give them food stamps. But the fact that it's exploding does call into question whether or not we're going in the right direction dealing with this very painful problem to many Americans.

TRUMP: Well, the welfare numbers are incredible. You have many states where the welfare number, the money you get is far greater than what you get if you had a job. So people are just saying, and I guess you can't blame them, it's not good but how can you blame them, they're saying why should we work? We might as well just pick up welfare.

VAN SUSTEREN: What is your assessment of President Obama's intensity of working on the problem of welfare in this country?

TRUMP: I don't think there is an intensity. If the intensity is there, it's toward getting people as much money as they can. Ultimately the country will fail with that. You've seen that many times over the decades and over the years and over the centuries. I mean, the country will actually fail. You just can't go on like this.

VAN SUSTEREN: Every time the Republican Party talks about poverty, there is sort of the pushback that the Republicans are cruel or don't care about poor people and turning their back on them. Is this a fair criticism of the Republican Party or not?

TRUMP: Well, there's certainly a criticism, and people talk about cutting back on Medicare and Medicaid and Social Security. And it is a criticism far more so of the Republican Party. Frankly, what the Republican Party should be talking about is success and making this country successful so that they can afford certain programs that are good programs, basically. You get rid of the fraud and abuse.

In these programs there are some great programs. Social security happens to be one much them. But you can't have these programs if you're going to have a failing country, which is what we've got right now. We have a failing country. We have tremendous deficits. We owe $17 trillion. And you can't do the things that you want to do with people in taking care of people. What the Republicans should be doing is talking positively instead of cutting back all the time.

If this country were the country it should be, it would be so successful that it could take better care of people and you wouldn't have to be cutting back.

VAN SUSTEREN: How would you inspire and motivate and give opportunity to these inner cities, especially like Detroit, where people simply don't have skills, they don't have opportunity, their schools are falling apart, and sort of it's a growing, growing, growing, it's not getting better -- how would you change that?

TRUMP: Probably, look, this is not a new problem. It's been going on for many, many decades in this country. We have cities that have been bad for years and years. And they've done tax incentives, work programs and all sorts of things, and nothing seems to happen. Detroit is a very good example. I mean, Detroit is a disaster area, there's no question about it.

What happens, we'll have to see. Perhaps you do the tax savings, perhaps you do tremendous incentives to businesses going into Detroit and you, instead of paying a big tax, which of course we're one of the most heavily taxed countries in the world, you don't pay tax or you pay very small taxes and you do something to get Detroit and other cities like it. Detroit is emblematic. You have many, many cities, I could name them but I don't want to embarrass people, but they will be next. You have many cities in the same situation as Detroit.

VAN SUSTEREN: Since I asked you a Republican question, let me ask the Democratic question. Have the Democrats served the poor people in this nation? They're in power in the White House. Have they actually helped the very people that came out in large numbers for President Obama?

TRUMP: Well, I think long-term the answer is absolutely not. Short term, sure, because you look at welfare and what's going on. You look at all the things that are happening. But long-term it's not sustainable by the country. So I think you can say on a short term basis the answer is yes. People will vote for them because they're getting free lunch, free dinner, free breakfast, and free everything else.

VAN SUSTEREN: Let me turn to the question of China. There's a document out written that China is criticizing our western ideals. Your thought about this document. First of all, what is it?

TRUMP: I think China is -- I've been saying this for two years and everybody else that would listen. China is just laughing at how stupid our leadership is. They can't believe they're getting away -- I deal with many people from China. I've made fantastic deals with people from China. They cannot believe how stupid our leadership is.

So when you look at China, what they're doing with our jobs, we talked about Apple or all of the things, they're made in China. Apple is this wonderful thing that happens to be made in China. We're not really the big beneficiary from that and so many other things. They've taken our jobs, they loan us back money. We're rebuilding their cities. We're rebuilding bridges. We're rebuilding everything. We're building -- we're rebuilding China.

And without us, believe me, we have all the chips, because without us, that whole thing would come to an immediate halt. I do very well with China. I have many friends in China. Many of the biggest business people there. They cannot believe they can get away -- and this is an off the record statement to me, which I guess is not so off the record. They cannot believe they're getting away with what they're getting away with, Greta.

VAN SUSTEREN: Let's turn to another topic. Earlier today you tweeted about Stuart Stevens, tweeted "He did a horrible job for Mitt," meaning Governor Mitt Romney. "Is a refund in order? Sadly, Stuart is a disaster." And then earlier you said he's expected to work for Governor Christie in the 2016 run. Explain all this.

TRUMP: I thought he did a terrible job for Mitt Romney, absolutely terrible. I think that was an election that should have been won. Mitt keeps saying and other people say that the second debate and the third debate where it wasn't that he was good, but Mitt was terrible. But they said you have to be really nice and you have to pull back and you have to do certain things.

Look, the campaign was a disaster. That was a campaign that should have been won. I don't know Stuart Stevens from a hole in the wall. I don't know what he looks like. But I will say this, whoever ran that campaign, that is not the person I would want running my campaign if I were running.

VAN SUSTEREN: You do describe him as a disaster.

TRUMP: The result was a total disaster. That was an election that shouldn't have been lost, and it was an election that wasn't that close. There was a big spread between victory and defeat. But that was something that shouldn't have been lost. The unemployment numbers, which even if you look at them now, the unemployment numbers are -- the real numbers are 15, 16, 17 percent. They don't show that. They show 7.4 percent. But the real numbers, and that's the people who have quit looking. You got to add them in, obviously. But the real numbers are probably close to 17 percent.

VAN SUSTEREN: That hooks us around to where we started this discussion, poverty in the inner city. Let me ask you this question. In your tweets, it seems to suggest that you believe that Governor Chris Christie is running for president in 2016. Is that what you think?

TRUMP: Oh, I think so, absolutely. And I think probably based on everything I've read and heard, he's going to use a similar group that Mitt used. And of course, Chris is a lot different than mitt. I think using Stuart Stevens and the group of people that so badly, I mean, so badly ran Mitt Romney's campaign, I think it's a disaster for Chris.

VAN SUSTEREN: You know, that's a very interesting thing, especially since you've had success with the apprentice and hiring and firing. It's interesting to me that I would look to hire somebody with an enormous track record of winning even if it's unfair to hold a loss against someone. That's what I would -- that's who I would look for.

TRUMP: You know you can learn from losses. But that loss was really catastrophic. That was a loss that should never have happened, ever. Such bad advice when you listen to the advice given. I happen to like Mitt Romney a lot. I think he's a good man. I think he really would have been a good president. But he did not resonate in terms of the voter. He just didn't resonate. And a lot of the blame is being put on Stuart Stevens and other people, but he was the head of the campaign.

But you have to really put the blame on Mitt Romney for listening to the things. I'd look at Mitt coming out of a store wearing a cowboy uniform or outfit, it just wasn't him. It looked so false. Somebody was giving him just horrible advice.

VAN SUSTEREN: Off the top of your head, do you have a gut feeling whether or not you think Governor Christie would make a good president or not?

TRUMP: I know him very well. I don't think he'll have an easy race to get in. But certainly I think he would be good and I think he would be a lot better than what we have right now. What we have right now is a disaster.

VAN SUSTEREN: Donald, always nice to see you. Thank you, sir.

TRUMP: Thank you very much.