CNBC’s “Your Money, Your Vote: The Republican Presidential Debate” Live from Oakland University in Rochester, Michigan
BARTIROMO: And good evening, everyone. I’m Maria Bartiromo.
HARWOOD: I’m John Hardwood.
And welcome to CNBC’s Republican Presidential Debate.
BARTIROMO: Tonight, we are here in the great state of Michigan for a debate that will focus almost exclusively on the economy and how to fix the financial problems of our country.
On the stage tonight from left to right: Senator Rick Santorum.
BARTIROMO: Congresswoman Michele Bachmann.
BARTIROMO: Speaker Newt Gingrich.
BARTIROMO: Governor Mitt Romney.
BARTIROMO: Mr. Herman Cain.
BARTIROMO: Governor Rick Perry.
BARTIROMO: Congressman Ron Paul.
BARTIROMO: And Governor Jon Huntsman.
HARWOOD: The candidates will have 60 seconds to respond to questions, 30 seconds for follow-ups and rebuttals. Those will be at the discretion of the moderators.
We also want you, the candidates, to help us out a little bit, by answering the questions as directly and specifically as you can. I know you want to. You have proven that. But just in case you get off topic, maybe by accident, we may have to interrupt you.
BARTIROMO: Throughout the evening tonight we will be joined by an all-star lineup of the smartest people on CNBC.
First up tonight, Jim Cramer, the host of “Mad Money.”
CRAMER: Thank you, Maria.
HARWOOD: And we also want to hear your voice. Go to our Web site, Debate.CNBC.com, and tweet us at CNBCDebate.
All night we’ll be showing your tweets on the bottom of the screen, so all of the candidates will have even more of a motive to impress.
BARTIROMO: In the interest of time, the candidates have agreed to forego opening and closing statements tonight. So let’s get started.
And we begin with you, Mr. Cain. I want to begin with what we saw today, another rough day for our money, for our 401(k)s. Once again, we were all impacted by the news that the Dow Jones Industrial Average dropped 400 points today. The reason, Italy is on the brink of financial disaster.
It is the world’s seventh largest economy. As president, what will you do to make sure that their problems do not take down the U.S. Financial system? It is the world’s seventh largest economy.
As president, what will you do to make sure their problems do not take down the U.S. financial system?
CAIN: Let’s start with two things. First, we must grow this economy. We have the biggest economy in the world. And as long as we are stagnant in terms of growth in GDP, we impact the rest of the world. We must do that.But we’re not going to be able to do that until we put some fuel in the engine that drives economic growth, which is the business sector. This administration has done nothing but put stuff in the caboose, and it’s not moving this economy. We must grow this economy, number one.Number two, we must assure that our currency is sound. Just like a dollar must be dollar when we wake up in the morning, just like 60 minutes is in an hour, a dollar must be a dollar. If we are growing this economy the way it has the ability to do and at the same time we are cutting spending seriously, we will have things moving in the right direction in order to be able to survive these kind of ripple effects.BARTIROMO: So, to be clear, focus on the domestic economy, allow Italy to fail?
CAIN: Focus on the domestic economy or we will fail, so, yes, focus on the domestic economy first. There’s not a lot that the United States can directly do for Italy right now, because they have — they’re really way beyond the point of return that we — we as the United States can save them.
BARTIROMO: Governor Romney, should we allow Italy to fail? Should we have a stake in what’s going on in the eurozone right now?
ROMNEY: Well, Europe is able to take care of their own problems. We don’t want to step in and try and bail out their banks and bail out their governments. They have the capacity to deal with that themselves. They’re a very large economy.
And there will be, I’m sure, cries if Italy does default, if Italy does get in trouble. And we don’t know that’ll happen, but if they get to a point where they’re in crisis and banks throughout Europe that hold a lot of Italy debt will — will then face crisis and there will have to be some kind of effort to try and uphold their financial system.
There will be some who say here that banks in the U.S. that have Italian debt, that we ought to help those, as well. My view is no, no, no. We do not need to step in to bail out banks either in Europe or banks here in the U.S. that may have Italian debt. The right answer is for us…
BARTIROMO: But — but the U.S. does contribute to the International Monetary Fund, and the IMF has given $150 billion to the eurozone. Are you saying the U.S. should stop contributing to the IMF?
ROMNEY: I’m happy to continue to participate in world efforts like the World Bank and the IMF, but I’m not happy to have the United States government put in place a TARP-like program to try and save U.S. banks that have Italian debt, foreign banks doing business in the U.S. that have Italian debt, or European debt. We’re just — banks there.
There’s going to be an effort to try and draw us in and talk about how we need to help — help Italy and help Europe. Europe is able to help Europe. We have to focus on getting our own economy in order and making sure we never reach the kind of problem Italy is having.
If we stay on the course we’re on, with the level of borrowing this administration is carrying out, if we don’t get serious about cutting and capping our spending and balancing our — our budget, you’re going to find America in the same position Italy is in four or five years from now, and that is unacceptable. We’ve got to fix our — our deficit here.
CRAMER: Congressman Paul…
(inaudible) to say, and I really get that. But I’m on the frontlines of the stock market. We were down 400 points today. We’re not going to be done going down if this keeps going on, if Italy keeps — the rates keep going up. Surely you must recognize that this is a moment-to-moment situation for people who have 401(k)s and IRAs on the line and you wouldn’t just let it fail, just go away and take our banking system with it?
PAUL: No, you have to let it — you have to let it liquidate. We’ve had — we took 40 years to build up this worldwide debt. We’re in a debt crisis never seen before in our history. The sovereign debt of this world is equal to the GDP, as ours is in this country. If you prop it up, you’ll do exactly what we did in the depression, prolong the agony. If you do — if you prop it up, you do what Japan has done for 20 years.
So, yes, you want to liquidate the debt. The debt is unsustainable. And this bubble was predictable, because 40 years ago we had no restraints whatsoever on the monetary authorities, and we piled debt on debt, we pyramided debt, we had no restraints on the spending. And if you keep bailing people out and prop it up, you just prolong the agony, as we’re doing in the housing bubble.
PAUL: Right now, Fannie Mae and Freddie Mac are demanding more money because we don’t allow the market to determine what these mortgages are worth. If you don’t liquidate this and clear the market, believe me, you’re going to perpetuate this for a decade or two more, and that is very, very dangerous.
(inaudible) Italy’s too big to fail. It’s great. I’d love it if we were independent. It would be terrific to say, “It’s your fault. It’s your fault. It’s your problem.” But if this goes, the world banking system could shut down. Doesn’t that involve our banks, too?