Former White House economists sound budget alarm

The National Debt Clock is seen February 19, 2004. The clock has since been redesigned to accommodate more figures.

JEREMY HOBSON: Now to the debt situation in this country. There's an op-ed in this morning's Politico from 10 former chairmen of the President's council of economic advisers. People from both sides of the political spectrum. They say the nation's long term budget deficits are a severe problem that call for prompt action by Congress and the President.

Diane Swonk is chief economist at Mesirow Financial. She joins us now live as she does each Thursday from Chicago. Good morning Diane.

DIANE SWONK: Good morning.

HOBSON: So yet another reminder about our long term budget problems. Any chance lawmakers in Washington will listen to these economists?

SWONK: Well, certainly they're not showing any chance of it at the moment. They're still flitting round the edges, thinking of $60 billion cut here, which seems big, but we need trillions of dollars cut, and they're not dealing with the long term problems that we face in the United States where the American public has also not come to accept what the real and that's the third rail of American politics. Everything from agricultural subsidies to entitlement.

HOBSON: The American public hasn't come to accept that. What is it that we, the American public don't seem to understand about those problems?

SWONK: Well, I think that the issue is is that they think they can first of all cut discretionary spending and that's it. The reality is that the American public doesn't understand that they're going to have to give something up either in taxes or in some of their benefits to deal with these long term problems. These are not paper. The entitlements that they thought were paid for are not funded and so if they believe that it's a lie. And until we do it, the reality of the situation and get some politicians to get the political will to tell the American public the truth, we're not going to deal with the situation.

HOBSON: Diane Swonk, chief economist at Mesirow Financial, thanks so much.

SWONK: Thank you.

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