Will the Economy Crash If the Government Balances the Budget? Judge Napolitano Debates With Stuart Varney
On Wednesday, Judge Napolitano weighed in on the fiscal cliff deal, going after Republicans for failing to do the job that they were sent to Washington to do.
Now, the next battle in Washington looms, with the U.S. debt ceiling needing to be increased once again. The judge believes once the debt ceiling hits, the government should stop borrowing money and immediately cut spending across the board to "live within our means."
"When you have a cancer, you cut it out. Not a cell at a time, you cut out the cancerous organ!" said Napolitano on Fox Business Network's 'Varney & Co.'
That prompted Stuart Varney to ask what would happen if the U.S. government cut out so much spending all at once.
"If the government shrank the government, if it shrank each department by 10 percent, it would save a great deal of money. There would be a lot less obligation on the part of debt service for us to pay. I know there would be an initial reverberation here, you could call it an earthquake if you want, because we are so addicted to government borrowing," said Napolitano.
Varney argued there would be "an immediate economic crash," but Napolitano countered that the country would get through it and be "far better off in the long run."
Varney then brought up one specific example of how drastic cuts in spending impact the economy. For instance, a meat inspector in Iowa who is paid by the federal government. If his job is cut, and the meat isn't getting inspected, then by law it can not go to market, Varney explained.
"You really were taught by socialists at the London School of Economics, weren't you?" joked Napolitano. Varney said he agrees with Napolitano's desire for a balanced budget, but does not concur that it can be done immediately.
Watch the full discussion: