trying to sell economic snake oil:

AMANPOUR: And as we've heard, America's growing debt is having an impact on the international stage. The draft recommendations released by the co-chairs of the president's deficit commission add up to nearly $4 trillion in deficit reduction through 2020.

But the proposed spending cuts -- Social Security and Medicare cuts -- and tax increases are getting a chilly reception from Democrats and Republicans, a sure sign of the difficult task ahead, while deep spending cuts in Europe are bringing people to the streets in protest.

Two members of the commission appointed by President Obama are with us this morning: David Cote, chairman and CEO of Honeywell and Democratic Senator Kent Conrad.

Thank you both for coming. Welcome to both of you. You were just on President Obama's trip abroad. How does this deficit and the big troubles and problems ahead with this play in trying to gin up business abroad, jobs?

COTE: Well, I think everything ends up being interconnected. You certainly, in my view, want increased trade. Trade, I'm -- you might expect I believe is a good thing, and it benefits both sides, and you want to have countries arguing about commercial issues, not geographic issues. I think it makes a lot of sense.

AMANPOUR: You know, Americans are worried that their jobs are going overseas. You've said that it can't be seen as a zero-sum game.

COTE: Well, that's one of my issues. And, quite honestly, I think the media helps to perpetuate this, is that economics is viewed as a zero-sum game, my loss is your gain, my gain is your loss.

And the only reason you do things economically is because both sides win. When you go to the store and you buy something, the store's happy, you're happy. You both benefit. And that seems to get lost when we start talking about economics on a grander scale.

It's not a coincidence that the corporatist right-wing pushes this tired, misleading trope saying there's no such thing as zero-sum economics. While technically true, the fact is, when your money puts the weight of the legal, political and regulatory apparatus on your side and not ours, there are clear winners and losers in the economic transactions.

AMANPOUR: Senator Conrad, there has been so much talk now about the recommendations by the co-chairs of the -- of the -- of the deficit commission, the fiscal commission. Is there any area you think that there's going to be any compromise on this? I mean, they're attacking and talking about really sacrosanct parts of the American political sphere here.

CONRAD: You know, a certain amount of this is shock therapy. You know, there are different options. And, of course, what everybody has fashioned -- fastened on are the most extreme of the options.

But, look, the important thing for people to know is we are borrowing 40 cents of every dollar we spend. That's utterly unsustainable; it can't continue much longer, so it's got to be dealt with.

If you look at our spending, it's the highest it's been as a share of our economy in 60 years, revenue is the lowest it's been as a share of our economy in 60 years, so we're going to have to work both sides of the equation.

It's critically important we do or we will become a second-rate economic power. That is the hard reality.

Uh, Kent? Revenue is low because rich people aren't paying their share, and the rest of us are out of work. That's the whole point of stimulus spending -- which you oppose.

AMANPOUR: But in terms of things like mortgage interest and all those things that the panel is recommending, these are things that Americans have really relied on forever, just about, and so many of them. Is that even a starter?

CONRAD: Well, there is -- as I referenced earlier, there is one proposal that eliminates all the tax preferences, all the tax deductions, all the tax exclusions, and uses 90 percent of the revenue to reduce rates, only 10 percent to reduce the deficit. I don't favor that approach.

I think we need something that represents a continuation of the mortgage deduction, although reformed, to apply only to primary residences, for example, but we need to continue the child credit, we need to continue the earned income tax credit.

But fundamentally, if we're going to raise revenue, I don't think the way to do it is to raise rates. I think the way to do it is to eliminate some of the loopholes that exist in the system. We have a tax system now that is just loaded -- chockablock full of preferences, loopholes. We're allowing $100 billion a year to be lost to offshore tax havens, another $50 billion to abuse of tax shelters. That can't be allowed to continue.

Of course you don't want to raise rates. After all, you've been a corporate handmaiden for a long, long time.

AMANPOUR: And on another -- well, on the same issue, but Paul Krugman, the economist, Nobel Prize-winner, who's going to be on our roundtable, has written this week that it really is basically tax breaks again for the rich and more onus on the -- on the middle class dressed up as something new.

COTE: Well, in my view, democracy seems to be uniquely suited to putting a traffic light up after the fourth accident. Now, we can't wait for the fourth accident here.

And that's why I applaud Senator Conrad, for Senator Graham, when -- his comments, trying to get out in front of something, because it's too easy for the demagogues and the polemicists to respond to something, just kind of go into their neutral corner and screaming, as opposed to saying there's a time to pull together.

This is one of those times. There are times when we should pull apart and pluralism and all that good stuff where people argue their point of view, but there are times when we have to pull together, and this is one of those times.

And it scares me that as a financially conversant CEO, I didn't know how bad this was going to get in the next 10 years. I could see where it was today, but I couldn't see what was going to happen in the next 10 years, because people want to point to stuff like Obamacare, stimulus, Bush tax cuts. And the thing that everybody misses is it's my generation, the baby boomers, who are going to flow through Social Security, Medicare, Medicaid. It's going to crush the system.

And I think the American public is ready for this discussion, but I don't see anybody having that discussion with them, and that needs to happen.

This is a real jumble of horse manure. Of course he avoids answering the Krugman statement, throws in a weird comment about traffic lights and accidents, pushes the conversation to "pulling together", then goes directly into scare tactics, conflating Social Security (which is basically fine) with Medicare and Medicaid -- which could be fixed with single-payer system, but hey, it's more important to pull together and punish the poor!

AMANPOUR: Well, are the Democrats going to allow these cuts that have been suggested in Social Security, Medicare?

CONRAD: Well, I'm a Democrat...

Kent, you're a Democrat in the same way that being in a garage makes you a car.

AMANPOUR: Well?

CONRAD: ... and I'm saying to my colleagues...

AMANPOUR: And the liberal wing of the party?

CONRAD: ... it is absolutely imperative that we take this on for the country's sake. And are we going to have to make some changes to Social Security? Certainly we are. Social Security is going to go cash negative in five years. It's going to go broke in 2037.

Medicare, we've just extended the life of it by the health care reform package, which has gotten almost no attention, but still it's prepared to go permanently cash negative in just 10 years. So, obviously, those things have to be reformed; there have to be some changes.

This is completely misleading. Even if we do nothing at all (and no one's suggesting that), Social Security would still be able to pay out 78% of its benefits in 2037. The working class took a big hit in FICA taxes back in 1986 in order to fix the Baby Boomer shortfall -- and fund lower taxes on the rich. Now it's time for the high rollers to take the hit.