This is a rush transcript from "Hannity," April 14, 2009. This copy may not be in its final form and may be updated.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Some argued this recovery plan is a case of irresponsible government spending, and it's somehow to blame for our long-term deficit projects and that the federal government should be cutting instead of increasing spending right now.

Economists on both the left and the right agree that the last thing a government should do in the middle of a recession is to cut back on spending.


SEAN HANNITY, HOST: And in "Your America" tonight, now that was Barack Obama, speaking earlier today about his plans to continue to spend your hard- earned tax dollars. Now, what I didn't hear in that speech is how he plans to pay for all of this.

And joining me now with reaction is the former House Majority Leader Dick Armey, who will be speaking at the Atlanta Tax Day Tea Party tomorrow.

Video: Watch Sean's interview

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

DICK ARMEY, FORMER HOUSE MAJORITY LEADER: Well, thank you, Sean, for having me.

HANNITY: So let me get this. There are those that would say that it's reckless, irresponsible spending that's causing the deficits. Now, that's what usually causes deficits. I'm trying to figure that comment out.

ARMEY: Well, let me say, Sean, first of all, let me remind you I've been studying economics as a serious professional — a serious discipline since I was about 20 years old.

And I would tell you that the first person who would object to the Obama plan today would be the Lord John Maynard Keynes himself. I want to make this point, because they're selling this plan in the name of Keynes. But let me give you three academic reasons why Keynes would object to the Obama plan.

One, Keynes talked about a baseline of a balanced budget. He said if the balanced budget — if you're in a recession, you have a modest deficit for a short period of time, then you pay it back in good times.

He did not say that, when you have an existing deficit of $450 billion, which is equal to the existing interest costs of your accumulated deficits, that you pile another 107 — $150 billion on top. Keynes would not accept that.

When Keynes wrote — reason No. 2. When he wrote, the federal government was about 13 percent of the total GNP. Today, it's about 25 percent or 24 percent of the GNP. The federal government is an already existing burden on the private sector of the economy; should not be made larger.

And then third, when Keynes wrote, the federal budget was about 97 percent discretionary spending. Today it's about 78 percent mandatory spending. There's no latitude for the Keynesian model.

HANNITY: All right. But he's saying just the opposite.

First of all, not every economist agrees. There are a lot of economists — and even the Congressional Budget Office numbers, which we always talk about, traditionally, historically has been the gold standard. They're saying that this is going to lead to long-term problems, structural problems in the economy. And they concluded we would have been better off had we done nothing.

But he's talking about, you know, blaming Wall Street, deficit spending, government intervention that he's defending. And not everybody agrees with that. Actually, there are those of us who believe cutting taxes and cutting spending at this time would be beneficial. Your thoughts?

ARMEY: Yes, as a matter of fact, he's — the best of the economists would argue just the opposite. Our problem has been two decades of too much, too easy money, too many foolish, careless decisions that were made, interest rates so low that we irrationally allocated capital to less-than-highest priority purposes, and that, of course, reduced growth.

So the fact of the matter is President Obama, who to my knowledge has never seriously studied the subject of economics and has never said anything that I have heard that would lead me to suspect that he might have had any serious study of the discipline, has just plain got it wrong.

HANNITY: Well, he comes from the spread-the-wealth philosophy, but let me — you're going to be at the Atlanta tea party tomorrow, and we're going to be broadcasting live from there, and for those of you in Atlanta, we hope you can come. But I want to — we've been asking people to send in videos to us about their tea parties, and let's roll the tape.



LLOYD MARCUS: Your stimulus is sure to bust. It's just a socialistic scheme. The only thing it will do is kill the American dream.

UNIDENTIFIED MALE: I am so thankful for the organizers of the tea party for the freedom and opportunity to speak and for all of you.


MARCUS: We're havin' a tea party across this land.

UNIDENTIFIED MALE: Lower taxes, smaller government.

UNIDENTIFIED MALE: Let us join together. Let us join today. And let's let all our voices be heard.


MARCUS: We're standin' up for freedom and liberty.

UNIDENTIFIED MALE: Mr. President, please don't break my piggy bank!

MARCUS: Cause patriots have shown us freedom ain't free.



HANNITY: I'm going to have to buy that kid a piggy bank here, but Congressman, why are you going to the Atlanta event, and what is your message tomorrow? And what do you think of all these events?

ARMEY: Let me be...

HANNITY: Go ahead.

ARMEY: Let me be very clear. I'm going to Atlanta, because I was invited by the Atlanta organizers. I don't know these people. I've never worked with them before.

And one of the things that the left is — is having difficulty comprehending here, this is a bona fide American uprising of real people. Nobody is managing this. These are not paid political operatives. This is not a union-organized outfit. This — it is real people coming out of their homes and organizing a protest against irresponsible government practices, irresponsible spending, irresponsible taxation, and worst of all, the inflation that is bound to ensue.

It reflects an America that understands economics better than its president, and it is not orchestrated by anybody. This is not an ACORNs event, and these folks have to show up, show up on their own terms, voluntarily, without compensation, because they care about their future.

HANNITY: And you know something, Congressman, we're spending too much money. We are stealing from that kid's piggy bank. And I'm going to find out where that kid is and give him a brand-new piggy bank, all right?

ARMEY: Good for you.

HANNITY: And by the way, don't forget tomorrow night I will — and Dick Armey is going to be there speaking — I'll be live. We'll be doing this show from Atlanta at the state capital, the Gold Dome. It's the site of one of the dozens of tea parties that are taking place all across the country.

We have a packed show tomorrow night: Newt Gingrich, Rick and Bubba. Special performance, you don't want to miss this. John Rich will be on the program. Mike Huckabee, Neal Boortz, Joe the plumber, and much more. And it's going to be at the Gold Dome, the state capital, in Georgia. Just check out our Web site, FOXNews.com/Hannity, for all the details.

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