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How would a President Santorum prevent economic meltdown?

This is a rush transcript from "Your World," January 15, 2016. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST:  You know, I don`t know if it`s a good or bad thing that the stock market its closed on Monday, because you know you`re going to get volatile markets in Asia on Monday, and you know you will likely see potentially another big sell-off in China, which affects all of Asia, which affects Europe, which would normally affect us, but we won`t be able to tried on that, a 390-point hit today.  

And the only good news I can tell you is, it was a lot worse.  It was down about 540 points.  That`s how bad things are, that we are grateful it was only a 390-point hit in the markets.  

I mentioned earlier on the question I posited at the debate last to the candidates.  What if we`re looking at the start of the meltdown or something that could drag through the year, and the new president has to deal with that just as he or she is coming into office, which was my only point with that question?

And a point I want to raise with a guy who could be in that position, Rick Santorum, the GOP presidential candidate.  

Senator, that was my issue.  What do you do if we are in a meltdown and you are assuming the mantle presidency on January 20, 2017, and people are saying, all right, you got to do something to stabilize or support these markets?  What does a President Santorum do?  

RICK SANTORUM, R-PRESIDENTIAL CANDIDATE:  Well, I think we could be actually at a couple of meltdowns.

I`m concerned about a meltdown going around, around the world right now, in addition to -- I`m talking about national security -- in addition to a meltdown here domestically.  And I think they`re probably somewhat tied to each other.  

The first thing you have to do, you have to get this economy growing again. That`s the most important thing we can do.  And I have talked about this from day one, that we put together a plan, a regulatory plan to eliminate all these excessive regulations, a reduction in taxes.  

Art Laffer mentioned a bunch of plans that he has reviewed.  He called mine an exceptional one.  So, he -- which is a true flat tax.  It`s very much like a Forbes flat tax.

CAVUTO:  Yes, but he liked -- he liked Senator Cruz`s better, right?  

(CROSSTALK)

SANTORUM:  Well, if you look the VAT tax, that`s fine.  I don`t like.  I don`t like the value-added tax.

CAVUTO:  Right.

SANTORUM:  And that what Ted Cruz`s tax is.  

I think it`s -- I think that would be a mistake, to give the federal government, a hidden tax.  That`s the problem I have with the VAT.  It`s a hidden tax.  And it`s an enormous tax.  It`s a tax on...

CAVUTO:  I don`t want to get -- I don`t want to get veered into that kind of issue, if you don`t mind, Senator.

SANTORUM:  Sure.

CAVUTO:  But I do want to say that I think what a president coming in, in the middle of the financial crisis, say, as Barack Obama was seven years ago, then you have got to ask yourself, how do you restore confidence, try to tell people it`s going to be all right?

Now, he was following up on efforts the Bush administration was taking...

(CROSSTALK)

CAVUTO:  ... to shore up problems in our financial sector.

So, what would you do?  

SANTORUM:  Yes.  Well, his response was to pass a stimulus package, which is a huge mistake.  And his response was to continue to bail out -- continue the auto bailouts, which was another mistake.  

From the very beginning, I was against the bailouts.  I was against the financial bailouts.  I was against...

CAVUTO:  So, you felt that way when President Bush was for those auto bailouts?

SANTORUM:  Yes.  Yes.  

CAVUTO:  President Bush was for those banks.  OK.  That`s fine.  

SANTORUM:  Yes, bank bailouts, auto bailouts, I was opposed to all bailouts, and was pretty vocal at the time in saying so.  

CAVUTO:  OK.  

SANTORUM:  So, no, I`m not going to -- that`s why I`m saying I`m going to focus on how we can get this economy going by unshackling the economy from the regulatory burden it`s on right now, unshackling the economy from the tax burden it`s under right now.

And I -- look, I agree with Donald Trump.  I think we have to look at our trade policies.  And I`m someone who has voted for free trade agreements, but I have also voted against free trade agreements.  I voted against NAFTA because I didn`t think NAFTA was good program.  

CAVUTO:  All right.  

SANTORUM:  So, we need look at all of those fronts in order to get our economy up and going again.  

CAVUTO:  Senator, always a pleasure.  You did a great job last night.  Thank you again.  

SANTORUM:  Thank you.  Appreciate it, Neil.  

CAVUTO:  Rick Santorum.  

END

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