to have to see big changes in our fiscal policy. i think much higher what does that mean, big? higher taxes? higher taxes. less benefits. we re talking about major changes. our politicians have made unrealistic promises. they have not prepared the public for the belt-tightening that s to come. as we get into an election cycle, peter, you ve got all sorts of people saying we need to cut spending and we can cut taxes. and christine and i like to push back on this a little bit and say, is that possible? because most economists we talked to, like the two of you say, cutting taxes is not a likelihood in this in this economic and fiscal strait that we re in. oh, cutting taxes is a unrealistic approach to boosting the u.s. economy. but it s not just cutting benefits, on the other hand. you need to look at what the u.s. government pays for stuff. health care is becoming the elephant on the balance sheet. we re going to spend close to 20% of gdp on health care while the germans spen
greece. we re joined by a professor of economics at harvard university, former chief economist at the imf and a professor of public policy now. and peter moricci, professor at the university of maryland school of business. gentlemen, thanks to both of you. ken, let s start with you. give us some sense for our audience, who heretofore has probably seen greece as a bit of a side issue that s affecting europe. why do we need to be concerned about what is going on in greece, in southern europe generally? well, they re having political chaos there. the european union together is a bigger economy than the united states. it s our big trading partner. this isn t nothing. they re really they don t know what to do. they ve got greece is in trouble. you mentioned portugal, spain, ireland. they don t know where it stops. there s some people who think they need to bail everyone out. there s some people who think they need to bail no one out. and in the meantime, as you said, the euro s really i
75% more for the same health care benefit. i mean, the german s health care is comparable to ours. our drug prices are too high. our administrative prices are too high. we need a major cost-cutting program within the health care establishment. i like to say also, and mr. rogoff may not agree with me, but the universities could use a bit of it too much, americans pay too much and the government pays too much to run the universities. it follows on a lot of things we do in this country where prices and costs are out of control in the public and quasi public sector. the two guys employed by universities right there. peter moricci, thanks so much, ken rogoff, a pleasure, as always, hopefully we ll talk soon. hopefully you know a little bit more on the situation in europe. we ll discuss it more. it s a big deal. but what you need to know how ties directly into your money and the dow nearly 1,000-point drop on thursday, we ll talk specifically about how to handle your money in this
all the scots, i would really make it clear to them, that if you lift this economy up, i mean, we re really just sort of pedaling along bottom right now. but if you lift this economy up, scott is a businessman is going to benefit. and unfortunately, i mean, you can t lift the economy up by giving someone who is making $100 million, $200 million. but you can lift the economy up by giving people that are destitu destitute, the wherewithal to buy goods, et cetera. if you do that for enough people, scott in the end will be a winner, he has to be more patient. and you know, realize that we don t live on separate islands in this world. we live together. and i think what we re doing now will make all of us safe together. it s not going to do scott any good if we had a financial crisis that, you know, in which we bought the ranch, the entire economy. just collapsed on to itself. peter, what do you think of that? it does sound like a reasoned argument that we re all going to
couldn t afford and took out loans with impossible terms. guess what, she gets nothing. but here s the indirect benefit. if there are fewer foreclosures, property values may increase and that s basically the bottom line for all of us. is it good, while it may not be good for individuals, is it generally good for the economy. i want to join i want to bring christine romans into this conversation, because she s been following with me, she s my co-host on cnn s your $$$$$. christine, an hour ago we were part of a very heated discussion between peter moricci and stephen leeb that have different views about it. stephen thinks it s necessary because it brings values up and helps people out, and he thinks we should be helping people out. and peter takes a different take, what do you mean by no fault of their own, people got in over their head and didn t plan properly. make some sense of this. that s the balancing acting the government has to make,