How To Solve The Deficit Problem From Delivering Alpha

CNBC's Steve Liesman is moderating a panel at the Delivering Alpha conference and he is talking to panelists on how to solve the deficit problem in this country. Liesman said that currently, we have $60 trillion of unfunded liabilities. MF Global's

CEO Jon Corzine was questioned by Liesman and said that Geithner was up here earlier saying we need to spend more now. Corzine agrees, as we need to help grow the economy. We need revenues to close the deficit gap, as we have a have deficit in resources. He believes that austerity is accumulating weakness. Corzine said that we should address short term growth with the American Jobs Act, and the long term problems with entitlement spending. Currently, we are searching for the right kind of growth strategy, and there is lot of ideology on how to do it. Jobs are the problem in this country, and consumer's balance sheets need repair. Emil Henry Jr., from Tiger LLC, and the former Treasury Assistant Secretary is saying that we are headed towards crisis. We could be in one now, if not really soon. Government spending is out of control, with $3.5 trillion in spending, which 25% of the economy. The net present value of all U.S. debt is $75 trillion. The biggest problem nationally is entitlements, such as Social Security, Medicare, Medicaid. The answer to our problems is growth, as we need four or five percent growth. This will solve our deficit problems in twenty years, except we have had about thirty years of 3.3% growth. He said he has not seen a single growth policy from the Obama administration. We need free trade for growth, but the Democrats have held that hostage. Thomas Steyer, Senior Managing Member of Farallon Capital said that deficit problems do color his investment decisions. The U.S. will undergo less growth than we had hoped for, and expected, because of current deficits. People keep analogizing this recession to other recessions after World War 2. This is wrong, because it is entirely different. It is a balance sheet recession, as opposed to an income statement recession. Steyer says that housing is a major issue, as it is not coming back in the short term. He believes that we have at least another three years of low housing demand. Steyer believes that people are willing to take painful steps, as opposed to other countries around the world. He believes we will do the right thing, however painful it is. For the U.S. to grow, the government has to perform functions, such as education, infrastructure, energy, and sciences. We are not dealing with investment question. Damon Silvers, Director of Policy and Special Counsel at the AFL-CIO said that we are in a situation of "clear and present danger." We have a deficit of jobs, demand, and growth. The Fed has done some things to support long term interest rates, but we are funding our debt at historically low costs, and we are starting down barrel of becoming Japan. We need more deficit spending to get out of the recession, and the same thing happened in World War 2. Households can not manage because for a generation, corporations have suppressed wages. If we cut entitlements from the poor, this is a recipe for national disaster. Silver says that the problem is health care costs throughout the economy, not Medicare and Medicaid. He believes that Medicare is the solution to the problem, as we have a market force to hold providers accountable for costs. We need to pay attention to successful growth strategies around the world, such as massive public investment.