This is a rush transcript from "Hannity," June 28, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Despite the Obama's administration big promises about what the $787 billion stimulus package would deliver, Vice President Biden had some bad news. He says the jobs we lost over the past two years are not coming back.

At a fundraiser for Wisconsin Senator Russ Feingold over the weekend, he said, quote, "There's no possibility to restore eight million jobs lost in the Great Recession."

But I'm not sure that the anointed one is on the same page as he headed into this weekend's G-20 meeting in Toronto calling for a, quote, "global stimulus." A worldwide stimulus, he said, that would put the global economy on solid footing.

Well, European leaders weren't stupid enough to believe that. The British government under David Cameron has already slashed its budget by 25 percent across the board. German chancellor Angela Merkel, well, she called budget cuts urgently necessary and she was backed by the Canadian Prime Minister Stephen Harper.

At the meeting's end, it was Harper who announced the nation's agreement to focus on slashing deficits, not pouring money into fruitless stimulus plans.

Joining me now is Gerri Willis from the Fox Business Network.

Gerri, good to see you. Thanks for being with us.


HANNITY: All right, you - it's interesting. I love your show. You have a great take. News that impacts your wallet.

WILLIS: That's right and there's a whole lot of it right now.

HANNITY: All right. There's a whole lot of it. All right, so here - I want to run this again. We just ran this a moment ago. Here's Joe Biden, he's out getting, you know, ice cream - what do you call it? Custard.

WILLIS: Custard.

HANNITY: OK. And - so anyway, the guy says, don't worry, Joe, I'll pay for it, just cut my taxes. And he calls him a smartass. Here's what said.


VICE PRESIDENT JOE BIDEN: What do we owe you?

UNIDENTIFIED MALE: Don't worry. It's on us.


UNIDENTIFIED MALE: Lower our taxes and we'll call it even.

BIDEN: When you say something nice instead of being a smart--- all the time.

UNIDENTIFIED FEMALE: Excuse me, guys. We're done.

BIDEN: Say something nice?


HANNITY: How do you say - a guy that's killing himself. I interviewed the guy today.

WILLIS: Yes, and look, how many people feel like that right now. Cut my taxes. Do something for me.

HANNITY: Cut my taxes.

WILLIS: This isn't just one person who feels this way. Instead of embarrassing the guy, why don't you like take his point of view seriously? You know, Biden is headed to the Gulf tomorrow, what is he going to say down there?

HANNITY: You know, Biden doesn't know and it was reported by the media. He has a special needs child. He's - you know, every penny counts for him. Just like it counts for every family that's trying to pay their mortgage. I just - the level of insensitivity towards an American citizen by the vice president appalled me.

WILLIS: Yes. And you think about this. This is what the BP CEO called little people, the small people.


WILLIS: Right? And Biden taking him on, just as if he were another CEO, another representative, another member of Congress.

HANNITY: Well, he doesn't get to play golf with the president every other day, which, you know, since we've seen in the Gulf oil spill.

All right, this really disturbed me. Does he really believe - now remember when they passed this $787 billion stimulus the president was claiming we're going to create four million jobs - I'm sorry create or save, the new standard.

He's now saying there's no possibility to restore the eight million jobs? Is this the - equivalent of the malaise speech?

WILLIS: Absolutely. This is saying we don't care if we are number two, we're number three, we're number four. We don't have to be first. It doesn't have to be American exceptionalism out there. We're happy to be in the backseat and let some other country drive the car.

Of course we have to try to replace those eight million jobs. There's no two ways about it and we can do it. But you know what? You have to have leadership at the helm that thinks it's possible.

HANNITY: Did you hear the comments on Friday and from Tim Geithner and the president himself? You did hear them. OK, since you're shaking your head. About how the world can't count on America any more. The world can't expect America to lead any more. And I said to myself, well, if America doesn't lead, who does?

WILLIS: Exactly so.


WILLIS: Well, I think it's - I think that's just an unacceptable comment from Geithner that he's willing to let other people step up and take over the leadership reins. We don't want that. We want to be the leader. We have to be the leader. Why would we step back? Why would we - and you remember the phrase, manage for decline?


WILLIS: Out of England?


WILLIS: That's what it sounds like to me. We're happy to step back, be number two, be number three.

HANNITY: All right, but what are we to make of the G-8, G-20 in Toronto, and you got the chancellor of Germany, you got the prime minister of Great Britain, the Canadian prime minister all saying we need austerity measures, we need to cut deficits. And the only one advocating for more spending is the United States president.

WILLIS: Which is nuts. You know here are these European economies saying hey, you know, we've really have to put the brakes on spending.


WILLIS: Economies that have spent to the hilt, economies that have gone crazy with spending finally understanding what needs to be done here.

Look, Keynesian economics can't work anymore. It's not working. Stimulus has not saved this economy. We still have 9.7 unemployment. We have to do something different. Those high deficits are scaring, frightening professional investors. It's hurting our economy. We have to pay down some of this debt.

HANNITY: But is there anyone around the president saying that you know what, the stimulus didn't work? Is there anyone there that's saying you know what, we really need to rein in spending?

He's accumulated $3 trillion in debt in two years in office and we still have $1 trillion deficits as far as the eye can see. I don't see anybody in the administration - although the president said I hope all those people are ready for the austerity measures, I'm going to challenge them on their word. I didn't - I don't see the plan.

WILLIS: One would have thought - one would have thought that Larry Summers would have been that guy, would have been that guy who would have said, you know, we have to balance this out, too much spending.

Do you realize that if you add up all these programs from the stimulus to TARP, everything that's on the table right now, you're looking at $2 trillion in spending. $2 trillion. We don't have money.

HANNITY: And on top of it all, we have the health care bill. What did you think of Nobel Prize economist, New York Times columnist, Paul Krugman suggesting that we are in the early stages now of a depression?

WILLIS: I just hope the man is not right. Could we have a double dip? Another go-back into recession? It's very unusual when that happens. But increasingly people are fearful of that, even the Federal Reserve is pulling in its horns, worried here. We have to do something to stave that off. More spend something is not the answer.

HANNITY: Do you see any political will, though, on the part of the Democrats to make the cuts that would be necessary? And what about Republicans? Do you think they're strong enough?

WILLIS: I have to tell you, I don't see anybody out there other than maybe Governor Christie in New Jersey who seems to be willing to go out and cut programs, do the hard work of saying no, we're not going to spend for this, no, we're not going to spend for that.

HANNITY: Christie is an anomaly. And I know our own Neil Cavuto asked him, you know -

WILLIS: Great interview.

HANNITY: It was a great interview. If he'd consider running for president. It's almost, I think, the country is moving in the direction that anybody that says government is too big, too bloated, too bureaucratic, there's too many regulations, taxes are too high and out of control, seems to me to be a winning political message, but you don't hear it from enough people.

WILLIS: You don't hear it from enough people and I think people are afraid of cutting the wrong programs, of paying a political price instead of going out and doing the right thing.

HANNITY: All right. Are states like New York and California at risk going bankrupt?

WILLIS: Yes. It's a disaster.

HANNITY: What does that mean for people that buy municipal bonds?

WILLIS: There's a big danger lurking out there for people in muni bonds. And you know, this is what individual investors buy, particularly people close to retirement. A lot of fear out there. These bonds are paying fantastic amounts of returns. They are the next bubble waiting to happen.

HANNITY: Bubble meaning they lose their money?

WILLIS: Bubble meaning it bursts, people don't pay, people lose money and another spiral down.

HANNITY: Do we ever get to a point where treasuries won't be worth anything or - what happened in Russia where foreign investors lose their money and citizens - they get repaid?

WILLIS: You know, I've been covering business a long time. I've never even considered the possibility of that. Could -

HANNITY: Should you?

WILLIS: Well, I think that - I have a lot of confidence in treasuries. What we'll happen is they'll become - they'll have to pay higher and higher interest rates, American taxpayers will have to pay more and more money for debt.

That's the fear out there once this global malaise settles down. That's what could happen. And that's a disaster. Don't get me wrong. That's a horrible thing to happen.

HANNITY: All right. Gerri, thanks for being with us. Good to see you.

WILLIS: My pleasure.

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