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NewsRadio 1330 KNSS>Audio & Video on Demand>>Tues 9/2/14 Hr 1 JBS Larry Kudlow, CNBC senior advisor; and Cumulus Media radio. James Pethokoukis, AEI. Veronique de Rugy, Mercatus & National Review. Avik Roy, Forbes.

Tues 9/2/14 Hr 1 JBS Larry Kudlow, CNBC senior advisor; and Cumulus Media radio. James Pethokoukis, AEI. Veronique de Rugy, Mercatus & National Review. Avik Roy, Forbes.

Sep 2, 2014|

Larry Kudlow, CNBC senior advisor; and Cumulus Media radio. James Pethokoukis, AEI. Veronique de Rugy, Mercatus & National Review. Avik Roy, Forbes.

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Automatically Generated Transcript (may not be 100% accurate)

Good evening I'm John -- this is the John bachelor show. -- -- -- CNBC and Chicago radio joins me and service. James that the caucus that the American enterprise institute and are going to address the American economy the global economy and there are good. Things to look for for example that George Washington that you enjoyed the dollar bill there's good news there I want to mention that later on this evening. Alice speak much of the bad news especially the tragedy. Of the death of the young man. Who was murdered by. Crisis another provocative video higher -- no one to look at it. But in any event what we can expect here in this war fighting in the Middle East. Is the fog of war make no quick. Presumptions about what's going on about what's what we see there are things to see here from our leadership and from the European leadership. But in any event. These are difficult days because of the skill set of our adversaries and social media we in America live on social media. We trust the transparency. The enemy knows this. They know how to use what is called -- to prop and to send into our homes frightening images that are meant to intimidate us. My experience my reading of American history is -- intimidated for about thirty seconds. So we begin tonight with positive news about the American economy and this great recovery. But there is a mystery here. Larry very good evening to you -- are sick correctly that there is positive news about the economy. Well blowout ISM manufacturing on the today broke blowout and we have pretty good durable goods report it looks like business investment. Maybe Aaron coming along for the first first time so literal way I'm not sure yet. But Pristina some evidence that the catalyst we don't think about the consumer side. And that's because wages are so slow 2%. So we're not seeing much consumers' bank effectively implement spending numbers. Consumer spending actually fell in July but I would say on the whole. Certainly you're in the two and a half percent growth zone and it may be slightly better. At Jimmy PepsiCo is joins us from the American enterprise institute and two at James you published a blog earlier in the month. That I'm attracted me because it was filled with this hand that hand slow growth expansionism. We're going to have to come up with new model fires -- -- there has to be a magical word so there's a recoveries five years old. And the recovery leads us to 2% and celebrating that not less than 2%. But also we're told it now takes a long time for people do hire a new workers were all of these exceptions. So does this mean. Right now that we're in a predictable zone of we seen this before and can we count on it to continue good evening chance. Good evening I don't think we have seen. Four I think there's some very deep disturbing that the federal type this to be optimistic segment. But I think there is some I think very disturbing trend inside the American economy. That make me think that ball we may have some acceleration here. I mean if this is that if the senate bid for investment. Was the way it has been in previous recoveries. We would be going over 3% that -- and that 2% I think there's -- very disturbing trends with a number of new companies. Starting up. With the with the -- turn in the labor market. I think we feel a lot less dynamism in the economy which lead to believe. That right now we cannot throw it -- As we used to can we growth factor of this -- sure hope so hope so but what we grow. What we have traditionally but recent war to I'm very skeptical who can do that over a long period of time. Do they act I did you get to the activity in the second but just start up now. Number is very important populist talk to listeners about the start up. Problem. Well we we -- that we've seen just the pay cut for the longer term decline in the number of new companies. In particular. -- can decline in the kinds of companies that become your very high growth. That's growing job creating companies that that's worrisome appropriate reasons one they create a lot that the net job. The country to. They create a lot of new product conservative lot innovation. And debris they also pushed the established incumbent companies. To become more efficient and more innovative without that are which is really the spark. That make our economy more dynamic than any other kind in the world you're you're dealing with them a far more stagnant economy. That they typically might -- concern. That's where we are there the reporter but studies they came out of the Fed conference in Jackson Hole in the support that JPMorgan's came out with a report today. Very worried there -- what they called economic justification. That didn't help could meet that public -- -- Celtic. I felt that the case it were a lot of I believe that's awesome. Startups. Actually -- people say small businesses create most new jobs actually it's really start -- that create most new jobs that they -- scored. As small businesses I think that people met that okay I disagree that you're on the long run unless we change taxes regulations education. Health care for example I think -- Stipe. Those are policies you talking about Larry that and therefore they can be changed. If we have a change in policies really across the board. That I think the outlook is is not just a difficult -- suggesting but if we don't change the policies. Then doubt we're going to be you know stuck in this some two to 3% zone but I will say that this current expansion. Okay this current expansion as weak and tepid as it has yet. I still think we'll go off. Forced several more years and I'm gonna put you with two very simple indicators that I like -- -- Number one. In the treasury bond market the so called you -- Long term rates remain. A couple of hundred basis points about short term rates and I don't expect that the change frankly forced several years. And we've never had a recession. That wasn't preceded by an inversion where short rates were higher than rob writes I was the Fed's -- -- barely -- secondly just pockets. Our profits come out later. But they're really leading indicator of the economy. And actually accurate -- slumping quarters. The third quarter of last year in the fourth quarter of last year. And kind of the first quarter of this year that -- done very well the second quarter and the early reports are good so profits keep rising. And the yield curve as positive have to I don't see a recession. I would go out three years to be honest. I actually. I agree with Larry that with a with a great flow with that still could be very easy debt debt -- all that the recipe for a longer expansion. But I still worried that we're not gonna have some corporate quarters. That we had a bad first quarter -- that was produced no. -- that the second quarter was weaker than expected. But at the record weaker weaker but because that was to coordinate a -- it would it would not air conditioning. But I'm reward that when the economy is that well I think if you -- -- we have very slow growth. -- any little -- that goes wrong. It can really have a bad quarter which -- lead to beat me to worry about that we'll have that adult bed two quarters but -- but patent court apartment where just outlined in that very popular. That I like justice destroyed -- year. Again I'm still worried about the long run I think the policy user -- wrong direction but. We really don't have any inflation to speak out and buy French investor focus has been writing about this I wrote. What -- two years ago my own mayor called it you know what the inflation threat never happened from QE2 anyway. And I still Iran Syria and the bond market expectations of inflation jobs are very well there's never been -- I've stopped asking about it Larry he told me not to -- It's good there's just nothing going on there the I don't think it's -- -- -- -- -- As you pointed out earlier the dollar is rising. And that hold the lid on commodity prices and back. Well crude oil prices are falling you know despite all the advocate unrest in the Ukraine and the Middle East the fact -- crew brought prices are brought. And I think is. -- today gasoline prices at the top. Are brought. A lot of qualified happened but it just say -- -- three dollars and forty cents. And that's the lowest we've had in a couple of years and we didn't get the explosion gasoline prices. Having said that at -- and make this point. For much of the in 1990. Which is a -- year. Gasoline prices were about a dollar and a quarter. Hope today that we have a long way to go there and I believe that ten dollar that I could cause. Should appreciate aggressively slashed corporate tax rates. And then that that normally rises. Short term interest rates we have a very strong dollar and it's very strong recovery and -- Very low inflation rates by Jimmy tells -- that those supply side policies are gonna. We're gonna talk about the dollar rally when he -- when we come back and I wanna start with Jimmy -- to start with one stat -- -- -- in your piece. This is from fed researchers to 70%. Chance of recession within a year after the annual real. GDP growth falls below 2% I -- ask if we're and that. In that danger zone. I'd Larry Kudlow of CNBC and cut the -- on the weekend James that the focus of the American Enterprise Institute I'm John bachelor. -- -- James at the goodness of the American enterprise. Student Larry I don't like -- and co host of CNBC and cut the rating on the weekend. James you you cite in your article for any guide this stack from researchers at the -- I'm presuming. That at 2% growth slipping under 2% annual growth that is a predictor of a recession within a year are we under 2% growth right now. Right now public -- over 2%. And we'll probably the girl over 2% for the rest the year apple would that would put that helped me. Is that what you are growing -- well that's basically been the quote a of this recovery just terrible is that your economy. Can not really would stand huge shock. Get bad winter. You know the economy -- And not my concern that even for grown somewhat over 2% were not going through your back or 4% but it -- that it. I'm worried about the shock. -- we're talking about the dollar their dollar is doing better but you know what. Who would have the dollar beating right now it's beaten to Euro I have quirky. Certain about the Euro the eurozone. Flaring up the back crisis. That the kind of thing really I worry about what I look at that sort of big macro picture over the next year. Well yeah. I know that -- -- -- down oil and gold I love the tropical I'd love it dropping Goldman rising stock market. Gosh it's like nobody that's basically what we had the eighties and the nineties eye -- can just get let's throw the long ball here. The Republican Party okay let's go right to dissent. Too neat what they're writing on it is we are not Obama. In fact we -- Bob. But that's about all I hear. And I've been pushing a new contract with America I don't -- what you caught. As telling John during the break. Both brought senator Rob Portman and a tire supplier alliance. Said on the radio last Saturday we have a new contract. Senator Bob Johnson said the same thing the report I -- -- what is the GOP's stance for. Why would voters give them both houses if the voters don't know what they stand. What do you think it's clear at this point that it has to be up to the individual candidates. To be clear they're looking for a big sort of message to nationalize this election. We're sitting here if amber is gonna happen. -- don't get the the -- Of the Republican Party right now they tried could go on down this road they went down this road. 2012. It didn't work. You have to give you have to give people something and it's gonna be a pretty individual candidates -- -- decade it back to come from Washington. I make big article on missed I address this -- review so the Republicans say they'll. Try to pass legislation -- the Keystone Pipeline okay fine. Speed up federal reviews of natural gas exports OK fine that's really small ball. But we're not everything that they've played well and and repealing its money can help flaws medical device tax okay. The bipartisan thing. The only guy I want in I don't want to keep that two guys. Barack Obama and Jack -- okay. -- from knowing about it but but you know I don't think the broad based tax reform. I think the broad based education reform I think the broad based open Obama care reform just to name a few gently that that bank. We -- division here. And aunt and therefore much these races except for about three average dog can exceptional right now -- -- which way to go. And if not now depends on our watch Iraq candidate quality. The quality of the ads. At the very tactical thing rather forget about me yet that -- supportive but go with that the country's. Mean that this country is worried he's got a -- Wall Street Journal poll from a few we know they think the American dream is that this country's hungry for optimistic realistic. At that. It could be from you know Robert moving the medical device that. Right that's -- -- -- you know I can't. Giant status of the GOP has got to return to being the party of optimism. -- have a vision and out tea in the try to hold elections presidential election jobs. Barack Obama was the Optimus. Mitt Romney with the pessimist got to where I read it and that's one of the reasons that I think -- lost much -- -- -- -- Is that it was very pessimistic and those Obama's message on the economy. It's you know improving and I don't I wanted to do better and do need four more years and I'll make it better that's optimistic message. My concern Larry is that it's not a level playing field you and I know that cause Jimmy knows toes were we're in the media. We understand that Iraq a sharp Republican message will be used as that a weapon against the Republican Party. We know how that works it's not about. Saying saying it factually it's not about staying with the evidence it's about. Rhetoric at campaign time could becomes demagoguery and the Republicans have gone extremely. Silent. Since the shutdown of last year and it's done them. Good. They've come back from what would have been a massacre last January. They were very fortunate to have that you know whacko computer. Breakdowns -- health care but here's. And maybe we'll talk about this later with older brother we end up people hate Obama -- -- the mandates they -- -- cost -- And GOP had stopped talking about Obama care to me that's a huge mistake. James LSQ. Do you perceive the GOP as docking. Do you see them on television is ducking all these questions no longer using the sharp language of December. Pop I think could I conducting. Putting out. The big picture met with them. Everybody knows there's something deeply wrong with this country not just at home we seem to be yoga retreat. Not just economically but also -- policy and you can't point to a. Think political right now what they're not troubled people or something -- what they need to pick it is our is the party's candidate that they. This is what's wrong. But not all stop and then. This is the path or not it would be easy -- -- -- don't have all the answers. I think this is where we need to go -- it was a little bit -- that a little bit optimism I think that the -- But he got a couple hundred point plan you don't to have your 75 point -- from the plant and point well just give people few ideas and better direction. Would it satisfy Larry if the message was 4% growth is all American with that too. I've been like that that's correct that's right and we we know how to do it and and I agree -- everything Jimmie just said I mean. We don't know if we can solve all these problems but you know here's here's the problem. Okay it's the economy is low and foreign policy is almost catastrophic at this point so. -- hear ourselves solutions. Let's pay taxes regulations health care education and just how would that just a few putts I don't addition -- good allies 75 page -- you brought. And I and a -- parents are all we can distinguish between our enemies our friend. Larry Kudlow CNBC -- path it -- -- to the American enterprise institute and you just heard the Republican platform I'm John bachelor. I'm John got so this is the John bash the show. My colleague Larry Kudlow CNBC and cut a radio continues with me and we welcome -- to regime. Writing most recently at the national review online about the CBO. CBO I noticed recently downgraded their expectations for GDP. In 2014. But -- is writing about the CBO's report on the federal debt and it doesn't look rosy -- make a very good evening to you. This part that says projected that doesn't look healthy doesn't what does that mean. I mean like our our debt is growing. You know our our economy is projected to grow. At a much slower rate then they have -- that the federal government is projected to spend money that's not healthy. And and there's really no relief in sight even. If they are a lot of really -- the assumption they into not into this report. Well right -- I look I'm not bad debt OK but I I just think you kind of I'm not sure right you say you go both ways that your article look. Debt rises and deficits rise when the economy slumps. The single biggest factor the ID associate director going to be a race and the single biggest factor in deficits and debt. Is the rate of economic growth. Let's just start right there. Every one percentage point increase in growth over ten years lowers budget deficits. By. The trillion dollar -- side by three trillion dollars every 1% more. Economic growth lowers deficits by three trillion dollars I mean that's neat that's the big story. I mean yeah -- in the the economic growth is great we all know the positive. Impact. By the economic growth. But the question is can we actually -- the projection of economic growth in this report. And we can't I mean that trend of the last. And certainly the last. Five or six years and prevent economic growth has been that -- of project said that they were going to have more growth than we actually end up happening I think this grant unfortunately we'll continue. And and this is even more likely to be true when you actually he again -- that federal government is projected to stand at a much faster growth. Then the economy is projected to grow I think I think that if it is significant problem. Well I think that I don't know what the future holds if we grow more of it to Republicans take over all three houses in the next couple years. And let's assume -- grow more. Then your debt problems are gonna melt away my point has. It's the growth -- that I do yeah. They're Republican will reform entitlement reform -- -- -- entitlements and then. And yet because -- mean that's like that's what needs to happen and for. Really you know. We don't uncertainty a lot of uncertainty to go away. They will have to be a little flea market which I don't -- it happened bent in a very long time. So you know I'm -- -- and I'd be slightly more pessimistic. About about the prospect. But I hope you're rich you're correct Larry. I don't know that I'm just I'm just doing it analytically and if you look at the chart you have for example. -- the largest that this country ever had in World War II we are overworked I think the -- was about a 125%. And that. But actually the post where users we are pretty good economic growth you -- your chart the lowest debt to GDP we have. Within the 1970s. And now it's terrible period for the economy right now and that's starts to rise again in the eighties and nineties which were great years in the economy. So all I'm saying is. Debt is any effect it has not crossed and I wanna raise the second point spend okay. Actually spending as a share of GDP. And even the level of discretion Hispanic and come down. In recent years and a lot of people black conservatives don't talk about that Republicans ought to do and that's good to share economy. Spending strong doubles 25%. Drew -- that 21%. In the last couple years what happened well Obama stimulus package ran -- that was very important. Then you had Republicans cut spending by roughly a trillion dollars and trying eleven and a second trillion dollars and twenty Surtain. So I would say that's lowers spending. Has its share of GDP is. Pro growth is that it may be the only pro growth how they. I happened I have great eye and how do you agree that there would grow this economy it's different this type of government -- -- I know that. Whenever progress we have made in the last few years will. Go away if we don't reform entitlement programs which are on a set to explode -- dramatically without -- me anything. I'm still we can talk all discretionary spending that we walk we didn't we didn't you know reconnect we can cut the athletes and it great -- department of education and you know and it -- -- -- come hurt and all of that stopped and if we don't want. Get a hold. And it out this spending that goes to. They exceed Medicare Medicaid social security and and basically -- dot CD for health care. This and will explode and the will take over. And physically he wrote and more then -- made in revenue. Then will collect and track and -- and and that without we'll have to pay interest actually mean. That's really the big that's really the big thing that that the big agenda that and that videos that we should all. There. I'm I don't -- Reagan supplied by a bit I don't disagree with you about entitlements. I think -- eminently solvable it's really a political question -- not a policy question anymore we know what to do. But I will say that Dodgers lobbed integrity in the conversation. If you make three they have percent economic growth. For the next out of twenty years can make on average three happens that I I think it comes down to. 3.3 as a whole post war period. So give me a little more give me three and -- half percent. Your Social Security problems solved. And your health care problem. Is not quite solved and I think there's some structural things that need to change health care and we need to put some market. Discipline to it but basically I think we can grow our way out of the entitlements I really do I mean. I I agree that if we get a strong economic growth. We can do a lot of things especially considering that this could increase that explosion. And healthcare is going to be yes. And basically -- Bob and then when we go back to -- when the baby boomers are out and you know it it got a normal life. That being hit two really big yet. I mean what what do you what are the party that you put in place that that you. You're confident that the politics is not gonna get in no way to prevent even Republicans from am. From implementing them to let our idea that the policies get used to the advice you know that the next people in power didn't do it every day I got -- I'll let let me out I think what I'm here and I think what I'm hearing policy. I think I'm hearing a policy dispute that is in fact partisanship and I wanna be cynical here Larry and Bernie. Is it possible that the Democratic Party is now committed to. Slow growth and redistribution on the basis of entitlements and the Republicans are committed to high growth. And entitlement reform. And both parties can lock each other up and nothing will change which favors the Democrats right Larry because the play -- in places that policies that the Democrats know. Will grow entitlements. Well I think replied I think -- construct is just about right I don't think it's that it intends don't want growth. But they don't they want income redistribution. War and that is Obama's vision. And the left wing has taken over the Democratic Party. Because many years ago John F. Kennedy it was a pro growth tax cutting Democrat but I admit that tradition has brought so I think you're correct. And that's there and exploit that the entitlements must be reform but Ernie your it's your. You're discouraging you saying they cannot be reformed even with the Republicans because of the way our governance works you can lock up the other parties and -- That's actually really not that -- I am actually that saying that I mean I I I agree entirely on the on the policy was Larry Larry is entirely right. What I dealt. Is it they're willing that of the Republicans. Actually implement these type of agenda I actually think it's shortsighted and it's ignoring the past. To say that the Republicans. Will grow and do the right thing once in power they haven't given a lot of evidence and many many many years. That they are actually. Really. Strong believer in the -- So we've got a -- and we've got to elect them so that they can disappoint it's right -- -- about it it is true doubt they're Republicans particularly when they held congress in the two thousands were so. Disappointment. That they were good and clearly they're good in the eighties and they're pretty good and -- that after the ninth. But that's petty vanity to receive -- it is -- and she's riding in the national review online looking out and projecting. Best case and her Larry Kudlow CNBC and other radio my colleague and co host I'm John back. I'm John -- Larry Kudlow my colleague and cohosts. CNBC and I've already on the weekend and we're very pleased to welcome all the wrong. Who has posted at Forbes dot com these spectacular analysis of the Affordable Care Act right now. Close enough to the mid term elections so that all candidates and there campaign. Designed. Operatives can use old -- very clear three points about the Affordable Care Act and shape a message for their states. -- I know you didn't write this with that intention but. Scott Lowe has been commenting recently on his show and on this show that the Republicans need a platform something to vote for and certainly. This analysis -- the Affordable Care Act is not about personalities. Or about the voting. Passions of the Democrats in 2010 it's about where we are right now let's begin with number one. Largest tax increase in history good evening -- Good evening if you count power yes it's it's. It depends on -- metric right in dollar terms of nominal doctrine that is. Obamacare was the largest tax increase in US history if you adjust for inflation are GDP or things like that you can make -- case. But it may need -- fifth or sixth largest tax increase in modern history but pointed. It's a big tax increases and that has obvious effects on economic growth especially the parts of the tax increase. That affects small businesses and businesses that file their taxes. Individuals for tax purposes. You know the cap gains dividends. All this stuff that you want to help their verdict. That's exactly right and you know I think. Larry obviously you're one of the most articulate spokesman in the world on this topic but for a lot of people they just don't understand that if you tax capital gains and dividends. What a drag that is on the economy because what you're doing is taking away productive capital. From growing businesses. And we -- and state taxes which are becoming a problem in big states big Blue States like California Illinois. New York New Jersey -- Connecticut's. You know he did it yet -- and if you stick Obama -- tax hike on top of that you really are stifling economic growth. Yet there's no doubt I'm obviously. It's hard -- aggregate how much of the that the slow recovery that we -- are experiencing is due to. Obamacare vs all the other things that the Obama administration is doing. But there can be little doubt that -- having some effect. And and to your point John beginning. What I've done here at Beverly kind of and then actually we on the public show the the couple report few months back we talked about the three big drivers of how obamacare is and does as acting as a drag on the economy or one. The tax increases. To the employer mandate and other factors and obamacare that increased the cost of hiring and employing people. And three. The fact that obamacare actually. Subsidizes. People don't drop out of it encourages people to drop out of the -- Let's talk about two. Cost of employing workers I think I saw the start of the Wall Street Journal that. It's at that workplaces are very slow to hire these days to an average of 25 days which is very high. Well when you need somebody to fill that post your stretching you're asking for more productivity year cutting costs. Is that something we can say is anxiety about the Affordable Care -- it hasn't been here very long. Well I think. Think it John when you that you knew you were talking in the break about that some of the people that you've spoken to -- -- who is because small businesses as a beat them from a journalistic standpoint. I can tell you when I talk to small business they're doing everything they can increase the degree that they're using technology to replace human. So for example -- I read about this in the post the fact that that grocery store there are using self service check out current or use scanned your own groceries. That's not limited to grocery store that's limited tool that that expanding to a lot of different types. The small businesses and that means obviously less jobs for humans. Oh wait another key point though which you mentioned your piece which is to Casey bargain point from Chicago university. Did spill of this obamacare. Is actually paid people not to work can you walk through that. Yes so I'll look uptick Peter Casey Mulligan -- and I'll give a counterpoint that I think is important. The case similar to Casey Mulligan is that is as a well known and accomplished economist at the University of Chicago. And he's been but the really big guy he's done the most research on this topic which is the fact that. Look the -- that the these these subsidies and obamacare are designed for low income people who can't afford health insurance that its current prices. So what does that mean. You typically low income in America if you either don't have a job or you have a part time to begin a fulltime job. You're making enough typically that you can afford health insurance or your employers. Is offering you a picture so kiss him all the argument is that. If you give people that subsidy for health insurance. Independent whether working or not then what's gonna happen a lot of people who who worked to maintain their health coverage are gonna drop out of the workforce. Perfect sense and affect the Congressional Budget Office. Has estimated at 2.5 million Americans. We'll drop out of the workforce largely due to that that that point out the counterpoint that that would make of that. Is that in Switzerland where they have universal coverage and they have means tested subsidies for health insurance. The unemployment rate -- two point 9%. To the point really it. It's not so much that health -- is driving this particular thought but health care is driving it -- -- the totality of the welfare state America that the federal state level that you probably is disincentive I think people would stay in the work. That's that we have -- much bigger. More widespread welfare state and Switzerland. And so if you go back to work or if you get a low paid job aerobics and then you succeeded in my paperwork and you succeed. You know I don't lose obamacare is sensitive you are gonna go to a higher tax rate. And I -- is a -- that Atlanta right continuous poverty trap. One thing that a lot of the European countries do that we ought to look at this country is they actually treat welfare benefits as income so for example if you live in Sweden. And you get welfare benefit. That welfare benefits subject to income taxes and that may seem like a strange concept brought but it's very important because what does that mean. If the welfare benefit drives you to a higher tax bracket you pay the higher tax rates. And so in that way the welfare. Discontent of the work for work that we deal with in this country is not as pronounced in Europe because. In many of those European countries well there is treated income. I'm already you know it just did generically you wrote that earlier piece which I think should be part of Republican policy. Dogma. And that is it's not necessary to totally repeal obamacare. But you can take it -- take these exchanges. And make them and to true free market. Health care. Absolutely so one of the things that I think that really him. Orton for a listeners of your showed can't understand and I think it's not well understood. Is that America did not have a free market health care system before obamacare. Lyndon Johnson in 1965 when he neck of the great society. That was the government takeover of health care Medicare and Medicaid would the government take over health care as Ronald Reagan warned. In the early sixties. And so what obamacare it's an addition it's an incremental additions actually to that gigantic. Government expansion have in the sixties so I think -- if for those that you actually want. The premarket health care system. We're really setting our -- too low if we only focus on obamacare we've got tackled Obama care Medicare and Medicaid all the same time. And if we do that and actually tackle the things about the government intervention helped your systems system wide. Then -- health care unaffordable both for individuals and for attacks there we can actually do a lot to solve our budget deficit problem. -- all the on affordability of health care for average people so I wrote about the international view the title of the papers transcending obamacare. And I heard anyone who contracted to look. It up and Larry back to your point about the Republican Party without a message for the mid term election. Of vick's Cogent C is overwhelming. Do the Republicans fear Obama Caroline -- No I I just think that. For some reason. Maybe because there's been numbers put out about involvement they just backed off that thing and they've gotten distracted and there. You know word about impeaching the president is suing the president and and that's just all nonsense. It's a distraction and all of expects. All of -- idea basically. Let's just get -- to get you exchange's one sentence written Medicare and and and Medicaid into it but give people. Free choice given tax credits or vouchers and get rid of the mandates that all you have to do and to be in great shape but people would love that. Of that Roy is the opinion editor at Forbes health care fiscal and tax policy and you can receive the weekly digest of the Forbes coverage of these things he just sign reported -- Larry Kudlow CNBC and come on radio on the weekend my colleague and co host thank you gentlemen I'm Jon --

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