Lots of political positioning this morning on This Week on Disney News and Christiane Amanpour. A word of advice: after staying out late the night before, it's never a good idea to start your morning with watching not one, but two aspiring presidential Ken dolls from Indiana -- one Democrat, one Republican. "Dear God, why are Evan Bayh and Mike Pence on my teevee?" (I'm sure you understand.) The fact that the president had Bayh on his short list for VP makes me nervous, because he's an amoral snake who would probably eat live puppies if he thought it would get him elected.

But I digress. Mike Pence? Cut from the same cloth ("prayerfully considering"), so already I'm nauseated. Reagan budget director David Stockman spouts the typical Village talking points on Social Security but at least speaks in something that approaches fact-based fiscal reality.

Let's not forget, though, that Stockman is the man who started the whole supply-side train wreck. Weird that he sounds like the reasonable one now, but hey, In the valley of the blind, the one-eyed man is king!

AMANPOUR: And the Bush-era tax cuts expire at the end of this year. If Congress doesn't extend them, taxes will go up for everyone. One man says that would be a good thing. David Stockman was the budget director for President Ronald Reagan. He criticizes his party for sticking with the tax cut mantra, and he joins us this morning. Also, Congressman Mike Pence, a senior House Republican leader who takes the opposite view. Welcome to both of you. Thank you for being here this morning.

PENCE: Thank you.

STOCKMAN: Thank you.

AMANPOUR: Let me first ask you, Representative Pence, you have stepped down, you're planning to step down from your leadership position. Are you running for president?

PENCE: Well, let me say, two years ago, I was asked to serve in a leadership position in the Congress, which after spending most of my career fighting runaway spending under Republican control was something as a surprise to many. But I took it because I thought we had an opportunity to lead our -- our party back to a majority. And I took the job. I believed if we returned our party to the practice of conservative principles on Capitol Hill, we could win back the Congress. This week's historic victory for conservative values for the American people is an -- in my judgment, a fulfillment of my commitment. And so now my family and I are going to take our time to prayerfully consider ways that we can serve our state and serve our nation in the years ahead.

AMANPOUR: Very quickly: Would you run for president?

PENCE: Well, look, we've been very humbled by the encouragement we've received back in Indiana and around the country. And we're intent on taking the coming weeks to really prayerfully consider that, to wait on the Lord, to seek counsel. And after the first of the year, we'll make a decision.

AMANPOUR: Or governorship?

PENCE: Well, we -- as I said, we've gotten...

AMANPOUR: So when can we hear your decision, after you've done all that consultation?

PENCE: Well, we frankly -- we've frankly been very humbled by the encouragement we've received back in our beloved Indiana and around the country, but we're going to take the holidays here. And as I said, we're going to reflect on it.

Unfortunately, I was drinking tea when he said this and I started to choke. The day a politician is "greatly humbled" by initial political support is the day gravity reverses itself. Politicians in general (and Republican politicians in particular) have huge egos which need massive amounts of adoration to reinforce their exalted views of themselves.

AMANPOUR: All right. Well, when you're going to...

PENCE: And our question will be, where can we make the most difference for what matters most to us? And what called me to public service back when the -- back in the Reagan administration, when I first ran for Congress, was...

AMANPOUR: We're going to ask you about that because...

PENCE: ... a commitment to conservative values.

AMANPOUR: ... because apparently Ronald Reagan was your political idol, so we'll ask you a little bit about that.

PENCE: Still is.

AMANPOUR: Still is, OK. Well, we're going to ask about his economic philosophy with the man who engineered it. Well, so, David Stockman, former budget director, you have basically said that Tuesday gave voice and gave further voice to what you call the big lie.

STOCKMAN: Exactly. This is not 1981. This is not morning again in America. We've drifted now for 30 years. Both parties, unfortunately, became free lunch parties, the Republicans cutting taxes every time they had a chance, never doing anything about spending, and the Democrats digging in to defend everything that was there. As a result, we now have this massive deficit. Today, the gross public debt is $14 trillion. The first thing we did when we walked into the White House in 1981 was struggle with raising the public debt to $1 trillion. So in that 30 years, the public debt has gone up 14 times. Our economy is only four times larger. We're losing the race. And we're now becoming the banana republic finance, printing -- the Fed, these mad men who are out of control at the Fed, are printing new money, equal to 100 percent of the debt that we're issuing each month. This will not end well. It's -- it's going to end in a disaster.

AMANPOUR: Right. And you're saying a tax increase and entitlement cuts are the only possible policy tools right now?

STOCKMAN: It's built into the math. I think, you know...

AMANPOUR: But this gentleman here is saying, no, correct? I mean, you don't want to cut any -- raise any taxes. You want to extend the tax cuts.

PENCE: Look, I don't think higher taxes are going to get anybody hired. I don't -- I think raising taxes in the worst economy in 25 years is a profoundly bad idea. But can I say what I agree with David on?

Just once before I die, I'd love to see a network talking head address the idea that we have to give more tax breaks to the very same people who....aren't hiring!

AMANPOUR: Go ahead.

PENCE: You know, I opposed the Medicare prescription drug entitlement. I opposed the Wall Street bailout. I opposed the stimulus bill. I -- I think this week's election was a historic rejection of American liberalism and the Obama and Pelosi agenda. The American people are tired of the borrowing, the spending, the bailouts, the takeovers. So to that point -- I disagree with David strongly on any tax increase. But to his point...

AMANPOUR: But the math isn't there.

PENCE: ... both parties have failed the American people and have allowed this city to -- to -- to be -- to expand spending beyond any reasonable expectation...

AMANPOUR: But, sir, with all due respect...

PENCE: It's true.

AMANPOUR: ... what you just said was the campaign -- campaign slogan. Now it's time to legislate. You have a new Congress. You have a new reality. You have a huge budget deficit, a massive national debt. And what I'm trying to figure out is, where, beyond what you've been saying in the campaign about, you know, less government, less spending, where you're going to make big cuts? And do you agree that there will, after a period of time, perhaps, need to be tax increases?

PENCE: Well, look, Republicans have put on the table -- and continue to put on the table -- our commitment to change the fiscal direction of Washington, D.C., to put our national government on a pathway toward a balanced budget. The president yesterday called for a spending freeze. Well, we -- we think we ought to go back to pre-stimulus, pre-bailout levels and freeze there -- there's been an 84 percent increase in domestic spending since this administration took office. We've got to roll back there. That will save $100 billion in the first year. How about a net hiring freeze on Capitol Hill? And let me anticipate -- David makes the point -- absolutely, for Americans under the age of 40, we've got to put everything on the table in the area of Medicare, Medicaid, Social Security. We have got to reform these entitlement programs. They are threatening the fiscal vitality of future generations of Americans.

AMANPOUR: Is that enough?

STOCKMAN: Well, no, not nearly enough. The point is, we're now in real-world governance. And you don't get 100 times at bat. The Republicans have been at bat for 30 years, and they've whiffed on everything. Social Security needs to be means-tested right now, not for benefits in 2030, right now, for the top one-third of beneficiaries who have private income that they've earned over their lifetime. We need to drastically scale back Medicare. And the Republicans expanded it. And I appreciate what Mike is saying, but there's no track record of a willingness to take on the doctors, the pharmaceutical companies, the scooter chair manufacturers, who are everywhere. So we need to take on defense, OK? We are now at the point where this -- we're kind of at the, you know, sundown as an imperialist power. And we can't have credit card imperialism. We can't be the policemen of the world anymore because we can't afford it. We're going to have to cut defense drastically. And that isn't just fraud, waste and abuse. It's force structure, fewer divisions.

PENCE: But let me...

(CROSSTALK)

AMANPOUR: Tell me...

(CROSSTALK)

STOCKMAN: And even if we do all that, we still have to raise revenue.

AMANPOUR: OK. Would -- you know, you heard Rand Paul say it wasn't a revenue problem, but you -- and you've also heard some economists saying that perhaps right now extending and -- and -- and increasing taxes in this crisis right now, immediately, might not be the most wise thing. What are you saying?

STOCKMAN: The crisis will be with us for the next 5 to 10 years. We've had a debt spree for 30 years. The economy has been badly injured. It is sunk under the weight of $50 trillion of debt that we've created publicly and privately. The recovery is over. It was weak; it was tepid. What we have now is day-to-day, 1 percent to 2 percent growth, if we're lucky. And so therefore government has to focus on paying its bills and not micromanaging or simulating the economy.

PENCE: But the way we're going to put our fiscal house in order is you have to cut spending now. Everything has to be on the table. I've been battling against runaway spending under both political parties throughout my 10 years in Congress. That's a given. But you can't balance the budget on 9.6 percent unemployment. You can't balance the budget on a struggling economy. The last thing we should do is allow a tax increase on job creators in this country to take effect in January or, as David suggests, a tax increase on every American. And let me take one point...

AMANPOUR: What will happen when Congress comes back in lame-duck? What will happen with this tax battle...

(CROSSTALK)

PENCE: Before we get -- look, David Stockman is, you know, he's a really famous guy and a thoughtful guy. I just disagree with him vehemently and I, frankly, have for about 30 years. David believes that every tax increase equals a revenue increase, but that's not true. Anybody who is familiar with the historical data from the IRS knows that raising income tax rates will likely actually reduce federal revenues.

AMANPOUR: Let me ask David...

PENCE: So if we raise taxes, the American people are very likely going to -- the top 1 percent are going to send less money to Washington, D.C., and that will never get us out of this...

(CROSSTALK)

STOCKMAN: I just have to respectfully disagree. You will have some loss of revenue because some activity or transactions won't happen, but if you raise taxes on paper by $100 billion, maybe you'll get $90 billion or $85 billion. But it's just common sense fact that, when you raise the rates, you get more revenue. Normally, it's a bad thing to do. But we are in such dire shape that we have no choice but to accept the negative trade-off of some harm to the economy to start paying our bills. Otherwise, we're dependent on the Chinese, we're dependent on OPEC, we're dependent on a bunch of hedge fund guys to buy our debt, and this game is about over.

AMANPOUR: And, Congressman Pence, you talked a lot about the...

PENCE: Raising income tax rates on the top 1 percent will not increase revenues to the federal treasury.

AMANPOUR: Well, not -- not according to -- to the budget director, who is the architect of the biggest, most sweeping tax cuts in American history. But the question I have for you is, what about all that -- you know, you all talk about the middle class. But the middle class, we've seen their incomes stagnant, whereas the huge amount of wealth has been accumulated by a very, very small top percent. It's not fair, is it? Is it?

PENCE: Well, look -- look, what's not fair is the idea that, at a time when tens of millions of Americans are unemployed or underemployed, that you would actually allow a tax increase on job-creators, a tax increase on their employees. I don't know anybody back in Indiana, in the city or on the farm, who thinks that raising taxes on their small business owner boss is going to put them back to work or get them back to full-time.

Again, the host doesn't point out that the "small business owner boss" has that tax cut NOW and STILL isn't hiring. Hello?

AMANPOUR: We've got one -- time for...
from

STOCKMAN: Two years after the crisis on Wall Street, it has been announced that bonuses this year will be $144 billion, the highest in history. That's who's going to get this tax cut on the top, you know, 2 percent of the population. They don't need a tax cut. They don't deserve it. And, therefore, what we have to do is focus on Main Street, and that means getting our house in order fiscally, not tax cuts that we can't afford.

AMANPOUR: On that note, there's plenty to talk about, and we're going to see it develop in Congress pretty shortly all of this. David Stockman, Mike Pence, thank you so much, indeed, for joining us.