Updated

This is a rush transcript from "Glenn Beck," February 11, 2010. This copy may not be in its final form and may be updated.

GLENN BECK, HOST: I ask you tonight: Look to the future of Greece and Europe so we may prevent it from being our future as well.

Niall Ferguson, he is the professor of Harvard — professor of history at Harvard and the author of — the author of "The Ascent of Money." Damon Vickers, chief investment officer at Nine Points Capital Partners. His fund rose 63 percent in 2008. And Brian Doherty, he is the senior editor at Reason magazine and Reason.com — also, the author of a great book, "Radicals for Capitalism."

OK, I guess — let me start here and let me start with you, Niall, on
— let the American people in on how bad things are in Greece. What is it like in Greece?

NIALL FERGUSON, HARVARD HISTORY PROFESSOR: Well, we kind of assume that these countries, like Greece, and you can add in Portugal and Ireland and Spain — that's we use the acronym "PIGS" because they are in pretty much the same substance that you'll find most pigs. They have spiraling unemployment, rocketing deficits and the markets no longer believe that their politicians can possibly pay off the debts that they've racked up before and during the economic crisis.

And just some of us predicted, no sooner did they try to start balancing the budget — and the Greeks have got to get their deficit down from 13 percent to 3 percent in three years — then, of course, the public sectors —

BECK: Oh, my gosh.

FERGUSON: — went on strike and took to the streets.

So, we got — we got people in the street of Athens today — and I should imagine tomorrow, too. The country is going to grind to a halt. And their only hope would be is that their old friends, the Germans, will bail them out. That is now Greece's economic policy: Hand-outs from Germany.

BECK: OK. So, now, if I'm not mistaken and just seeing that things that I read in the paper here recently — Damon, the people that are in the streets now are the labor unions, because they have — Greece has expanded the role of government. There are so many government workers now, that the unions are saying: No, we didn't make the mistake.
The government officials, the politicians lied to the people. Why should our employees take the hit for this, right?

And so, they won't take any cuts.

DAMON VICKERS, NINE POINTS CAPITAL PARTNERS: They don't want to take the cuts. I mean, I think, momentarily, we're going to hear about the cars turned over and fires in the — fires in the streets. I mean, it looks like a potential — looks like a potential revolution beginning in Europe.

BECK: We were talking before we went on the air and I said — and I want to get Brian, I want to get your thought on this — and, Niall, I want to talk about this as well. So, let me start here and then we'll go around.

Before we went on, I talked to you about "The Coming Insurrection," a book that is from Europe. It's communist. They say, hey, we've had — we were going for the socialist utopia. You politicians lied to us. They basically got in bed with the Nancy Pelosis, if you will, of Europe and said, "You promised that we are going to have this socialist utopia. You won't do it." They're unveiling themselves now as real communists and saying, "Then, we'll do it." And that's the coming insurrection.

When I told you the story, you said you were driving in the car here.

VICKERS: It's funny.

BECK: Yes. And you were writing down notes, things that came to your head. What happened?

VICKERS: Yes. I mean, you do — you do an interview like this. And doing interviews with you is — are kind of intense.

(LAUGHTER)

VICKERS: A little bit.

I'm trying to condense, you know, what's going on in the world. You know, we're all trying to figure it out. What's going on in Europe? How does this play into the United States? Where are things likely unfolding? Where maybe are we headed?

And if you get a disintegration of all the systems and the checks and balances, and, you know, the unions uprising because they're getting enough benies and Greece is 10 percent of the whole — 10 percent of the whole population works for the government.

I mean, it's — who wouldn't have a revolution against this giant tumor of an enterprise that is sucking the life out of the economy? One third of the people don't even pay, don't opt-in and pay income taxes in Greece. The average family plays 2,500 a year in bribes just to get things done.

And there's a break in the trust between the citizen and the government. And so, the government keeps lying, Westernized governments keep lying to their citizenries around the world. And this developing unrest and the bankers and the Wall Street, and the mortgages and people squeezed more and more.

And here comes the austerity programs announced by Greece yesterday that they're going to hike taxes and at the same time, they're going to freeze wages. If you're a Greek citizen right now, you got to be just livid!

BECK: So, Brian, what is the — I mean, first, do you agree or disagree with the idea that there's civil — massive civil unrest headed our way over in Europe?

BRIAN DOHERTY, REASON.COM: Sure, yes. Yes — I mean, the Greeks, whom I love, do have a tendency to take to the streets in very violent ways when they're upset, in a way that we in the U.S. don't do.

I mean, I get why, you know, the lefty kids who read books like that book, "The Coming Insurrection." The European dream is like get a very well-paying government, public sector union job, hold on it to for dear life, living in a country that's like 36 percent less productive than America, poorer. I mean, they've got a lot of nice old buildings, but it's a pretty grim situation if you're a young person. I understand why the thought of bringing the whole system down around its ears starts to seem attractive. But I don't think they can go that way because what we're seeing with Greeks now is the end of the socialist dream, the end of the dream that government can spend and spend, and borrow and borrow, and nothing bad will happen.

So, I think the next step when we go through whatever difficult plans they're going to is actually going to be more freedom not more socialism, despite books like that.

BECK: Niall, your thoughts.

FERGUSON: Well, my message, Glenn, is that PIGS are us. In other words, we very quickly could find ourselves in a similar situation to Greece.

I looked the other day at some International Monetary Fund data which startled me because I realize that, in fact, the United States is almost as bad fiscal position as Greece. There's hardly any difference when you actually look at what the U.S. would have to do to bring its budget back into balance.

But I think what you get here is not a swing to the left. One thing that differentiates the U.S. from Europe is that when things go wrong, populism here takes a completely different form. People feel more individualistic. They feel more resentful of big government. And I think what we're seeing at the moment is beginning of a big populist backlash.

But it's early days because I think, for the time being, it would seem to be a European crisis. Maybe for months, investors are going to say, to heck with the PIGS, I'll put my money in the U.S., the dollar will probably rally and everybody here is going to relax. And that's the fatal thing: To think that it isn't going to ultimately catch up with the United States.

You know, if you look at the Congressional Budget Office data, the United States is never again going to run a balanced budget, never. I mean, beyond our lifetimes, every year, there's going to be $1 trillion of new debt.

Now, that game can come to an end very quickly indeed when investors look at the math and they say, "Wait a second, a debt to GDP ratio of 100 percent in 2012? That can't be right." And we get — we get the same treatment the PIGS are getting now.

So, my message is: PIGS are us. We're not that better off than Portugal, Greece, Spain and Ireland.

BECK: Can somebody explain the — there's this — I keep reading about this magic number of 90 percent debt to GDP. That there is this magic number that once you cross — we're at 84 percent — and once you — once you pad — they say we are going to hit 90 percent. Once you hit 90 percent, there is some sort of, I don't know, mathematical equation. Does this sound familiar? I read about it over and over again.

What is it?

VICKERS: I definitely heard it, too. But I mean, there are a lot of numbers that simply we don't know because they're in a deep, dark hole of unknown accounting. So —

BECK: So, we could be beyond?

VICKERS: For sure.

(CROSSTALK)

BECK: Yes, I didn't get that —

FERGUSON: Sure. The Japanese got off 100 percent before the markets took fright. But we're not going to get that far. I mean, these numbers are in some ways are arbitrary because what happens is, all to do with the interest in your debt. If you are paying 3.5 percent on the debt, as the U.S. is broadly speaking now, you can ratchet up quite a lot of debt.

But if that's happened to the Greeks, the markets say, "No, wait a minute, we'd rather have 5.5 percent or 7.5 percent," then very quickly, your debt starts to kill you.

And that's what I'm most afraid of, Glenn. What worries me is that the cost of servicing this huge debt could suddenly spike upwards. And when that happens —

BECK: It will!

FERGUSON: — it starts to consume a larger, larger share of the budget. It goes from maybe 9 percent of total revenue to 25 percent. And then you are in the kind of fiscal crisis that we're seeing in Europe right now. I think that could happen in the United States this year.

BECK: I know — I know, Damon, I want to ask you a question here.
But I just have to ask you: Is there any doubt in anybody's mind here that that's going to happen? I mean, these interest rates can't last. It's going to go up.

VICKERS: I don't — I don't they can last because what you got globally is — what I think Niall is speaking to very well — is that there is a demand for capital — real capital — on a planetary basis, on a global basis. China has it. Asia has it. We don't. We'd print money and self deal.

And so, if countries need capital — like Greece, like Portugal, like Spain, like the U.S. — we have 200 debt auctions per year on — we all have to compete for capital. So, rates can't say where they are right now. We could see a ratcheting up of interest rates which will — could implode the bond market, which would be the debt market which may be, ultimately, where this all winds up.

If you can't pay the debt off, what do you inevitably have to do? You got to — you got to write it off.

BECK: Then what happens?

VICKERS: Well, then all — you get simultaneously write-down of global debt under a crisis.

BECK: OK. The idea — and, Brian, maybe you can help me with this, we seem to be every — the West is doing the same thing. We've — we have been — while they were building the Statue of Liberty and painting Washington crossing the Delaware over in Europe, to tell Europeans, "Be more like America," our leaders, our, you know, brainiacs, were going over to Germany and learning Marx and Nietzsche and everything else.

We haven't been a true free-market, a true free society in over 100 years. Nobody has. We keep going — be more like Europe. Well, now, we're like Europe.

DOHERTY: Right. Yes, the global trend does seem to be that the entire West is just going to end up the sort of static, low growth, boring, you now, un-dynamic place, like Europe actually is now. If you look at public sector union trends in the U.S. versus Europe, we are becoming more like them in a very alarming way. And the most alarming way that we may end up being like Europe, is right now in Europe, we're seeing that people are no longer interested in buying the bonds of countries like Portugal and Greece.

And we're already seeing the Chinese showing a less interest in buying our bonds. And then the whole game — the whole game of, well, we'll just going to borrow and borrow and borrow, to spend and spend and spend is over. That's going to be really unpleasant. But I think, what's at the other end of this is going to be great, because then money and capital, instead of us being lent to government, to do what government do with them, can actually be led to entrepreneurs and people who are going to build real wealth for the world. And that's my hopeful —

(CROSSTALK)

VICKERS: No.

BECK: No?

VICKERS: I don't see that way. What I see is, increasingly — look at Greece. Greece is the cradle of Western civilization. It's the cradle of democracy. I mean, what's at stake here, what's really at stake here is the whole notion of the democratic system as it stands. The westernized system that we've exported all over the planet is in peril right now.

BECK: But we haven't done it. For over 110 years, we haven't done it.

VICKERS: We haven't done it. We've hid under the Democrats or the Republicans or the conservatives, the liberals —

BECK: It's the progressives. It's all progressives.

VICKERS: — and nothing has happened.

BECK: But, no, it's all been — they have distorted it. It's all a progressive nightmare. It's not — it's not true freedom. True freedom — you tell me, and Niall, you're the guy who did the history of money, you tell me: What happened in 1920? We talked about it earlier this week on the program. Government got out of the way.

(CROSSTALK)

BECK: We had a depression and it rocketed back up.

FERGUSON: Yes. Yes, the 1920s really were the last time you could say that this was a pure free-market system because all the programs that we are familiar with today originated in the New Deal, in the 1930s. And, of course, Franklin Delano Roosevelt is an inspiration for President Obama. So, we kind of getting a new New Deal which I don't think is going to help matters in the slightest.

The trouble is, I don't think we get to that optimistic outcome that we've been imagining here so easily. It's very painful indeed to get from a situation like this, to a healthier free market situation. You either have to default on a large part of the debt or you have to inflate it away. There really aren't many other options open to our country that has debts this size. And none of these processes is really much fun.

So, I don't think that we easily get to — back to the idyll of a true free-market republic. The problem is the politicians. And this is, I know, one of your themes, Glenn. I see a consensus in Congress between Republican tax cutters and Democratic spenders to run deficits for the rest of the time. That is the political consensus that has emerged in Washington.

GLENN: And it's doomed. Doomed, right?

FERGUSON: What is completely lacking is the will to reform the U.S. tax system, to cut income tax but to introduce some other tax on consumption that might actually help to balance the budget and simplify the whole system, because right now, it's just a massive poverty trap and distortions. And, of course, the other thing that politicians just don't want to touch are the entitlements which are bankrupting the country.

Until those are done — until there's a political leader that has the courage to spell out to Americans, "We need to do this, we need to reform our system, root and branch," then I'm afraid we're going to slide downhill in the direction not just of European economics but of Latin American economics.

BECK: Let me tell you something: I've never seen anything like this before in my life. I've never seen — I've watched America and talked to them, I've been in radio since I was 13. I know, I have a good sense of America. I have never ever seen in my lifetime the willingness of the average American to say, "I'll live like my grandparents did in the Great Depression. I will sacrifice, if you promise that freedom will be at the other end for my children. Stop stealing the future from my children."

They know. They're onto the game. They just need somebody to verify it for them and then they'll do the hard thing.

The question is, when we get back, "A," what is hard thing? And with what see happening over in Europe, the coming insurrection, and the players that are involved: would you be allowed to do the hard thing?

Are there — I'll get into one of my conspiracy theories, the one that everybody always says, "Oh, he's a conspiracy theorist." No, no, no. I just notice all the people that are involved. I'll talk to you about that on — are you going to be allowed to do the tough thing? Next.

(COMMERCIAL BREAK)

BECK: You know, I have to tell you, a lot of times people say, you know, the lefty blogs will say, "Glenn Beck is conspiracy theorist." No, I'm not. I'm student of history. If you don't want to repeat the mistakes of the past, learn history. And you would see it every time.

We're back with Niall Ferguson, Damon Vickers and Brian Doherty.

And I want to start here. What gave this theory was learning the real history of the end of the Soviet Union. The end of Soviet Union, I think it was Boris Yeltsin, wasn't it?

Yeltsin went out and he went out into the woods and he met with a lot of the leaders of the — what's now the Russian Republic, and said, "Look, this thing is going to collapse. Now, we can do this one or two ways. It can collapse or we can fundamentally transform it." Went back into, you know, their version of Congress and said, "You got one hour. Debate it. Transform it or you're going to have blood in the streets. What it's going to be?"

They decided to transform it to the Russian Republic.

Well, we look at the collapse and say, "OK, there's problems," others also are. I think that there are those who are looking at what it this transforms into it. I don't think this language of President Obama, "I'm going to fundamentally transform America," I don't think that's a mistake. I don't think that's a coincidence.

I'm wondering if — as there are in Europe with the unions, the unions, a lot of it is communist influence, et cetera, et cetera, deep socialists. There are socialists running this republic over in Greece now. These — they're already making the decisions of what it's going to be and it's going to China. It's going to be China-lite. I think that's the model that people are going for.

Disagree or agree?

VICKERS: No, I — you know, it's scary — it's scary to say that. It's scary to say that to America that the model that the world may choose may ultimately look more like a China-style system. That's a scary thing to say to America.

BECK: Oh, only because they're killing children in rice paddies. I mean, it's not — it's an ugly system.

VICKERS: So, and you make the good point that if you know something is headed a certain way, if you know that you're already on slippery ice, if you know that you've lost the brakes, in those moments that you're heading towards the crash, do you — I don't know — put on rose-colored glasses, look out the window, get involved with conversations of people in the backseat, or you take control of the wheel and try to do something and try to focus the direction of the vehicle and try to preserve what life you can in the car, which is the world's populations.

(CROSSTALK)

VICKERS: The global governments, the global countries are going to model themselves after economies that are functioning. Not after ones that are not functioning. And so, that does look a lot like China.

BECK: Niall?

FERGUSON: The lesson of the Russian experience, I think, is slightly different, Glenn. I think what it tells you is that a very well- intentioned leader who for some people appears to be the solution to their problems can completely wreck the system. Mikhail Gorbachev was the man who broke up the Soviet Union. And the collapse of the Soviet Union 20 years ago happened at incredible speed. Nobody was really expecting his reforms to completely destroy not only the Soviet Empire in Eastern Europe but the Soviet Union itself.

And I worry a little bit about our own situation today. I think we could collapse much more quickly than people assume. I hear debates all this time about the crisis of Social Security, all the crisis of the national debt. But it all seems to play out decades away from now. So, we kind of not worry about it now.

But I think the lesson of what's going on Europe today and what happened to Russia 20 years ago is that collapse can sneak up on you and strike very sudden indeed — no matter how good your intentions are.

I want to go back to this question of how do you actually reconnect the politicians to the aspirations of ordinary Americans — because I pin my faith on those ordinary Americans fundamentally don't want socialism. They don't even want Keynesianism. They don't want big deficits. And they do want small government.

That is still the case. Unlike in Europe, unlike in Russia, and certainly, unlike in China, the question is: why we don't have politicians who can deliver on that — who can actually fulfill that aspiration that ordinary Americans have?

I'm hoping, Glenn, that you can find us the next Ronald Reagan. Is that why you are out on the west coast? Are you scouting for actors whose careers are coming to an end —

(CROSSTALK)

BECK: I wish I could. I'll tell you —

FERGUSON: — fancy a try in politics?

BECK: I'll tell you, in the next segment, we're going to talk about the hope of America and the hope of the individual because that's where it comes from. The problem is, you say, "Why aren't we finding these politicians?" Because the politicians have bought in to the progressive lie, that it doesn't work, that America's system doesn't work.

Well, it hasn't worked. You know, you said, Damon, a minute ago, well, they're not going to model themselves after a system that doesn't work. You're darn right. It doesn't work! But we've been modeling ourselves after Europe. And Europe is not working.

VICKERS: We're racing towards it with the health care plans, with the entitlements, with your unionization.

BECK: And it's collapsing.

VICKERS: Unions in Portugal, in Spain, in Greece, are collapsing the economies, along with government and we can look for our own —

(CROSSTALK)

DOHERTY: And in California, may I add.

BECK: Yes, it's the same story.

VICKERS: What did the unions do to General Motors, to the airline industry? What has the growth of government in the United States done to the United States, and our bickering back-and-forth and entitlement spending and pet projects and the way we define GDP? What the heck are we focused on?

BECK: OK. All right. We'll back in just a second.

Niall, I know you got to — you got to run. But I appreciate you being part of the program.

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