Oct. 9 Republican debate transcript

Matthews: Mayor Giuliani, the private equity firms are making billions of dollars. I guess it's a mystery to me -- and you can explain it as a New Yorker, where these billions of dollars -- where were they before, and is there any downside to this amazing bonanza in the hedge fund and the private equity firms?

Rudy Giuliani: Well, I mean, the market is a wonderful thing. I mean, the free market is our -- one of our greatest assets. The leading Democratic candidate once said that the unfettered free market is the most destructive force in modern America. I mean, just get an idea of where that philosophy comes from.

The free market is the asset that has allowed us to -- the sky's the limit. The reality is that what we have to do is look at the fundamentals. A president can't be a economic forecaster. A president's not going to be any better an economic forecaster than you are a baseball forecaster. And I'm not particularly good baseball forecaster this afternoon. (Laughter.)

So the reality is, a president has to work on the fundamentals. What are the fundamentals? Keep taxes low. Keep regulations moderate. Keep spending under control. That's an area where we need a lot of help.

And make sure you do something about legal reform, so that our legal system doesn't -- it's, 2.2 percent of our GDP now is spent on all of these frivolous lawsuits. It's double any other industrialized nation. We don't get control of that, that's another way in which we're going to eat up our future. So we've got a prospect on the Democratic side of overspending, overtaxing, overregulating and oversuing. And I think you need a Republican alternative to that, which is an emphasis on the pillars of growth that I mentioned.

Matthews: Just to test your forecasting ability, Mr. Mayor, will Torre keep his job?

Giuliani: (Laughs, laughter.) God willing.

Matthews: Okay. Thanks.

Giuliani: Joe Torre is the best manager in the history of the Yankees, at least in the modern era, so -- and he's my friend. (Laughs.)

Matthews: Okay. Congressman Paul, I think you have questions and concerns about the bonanza in the hedgefund industry. Do you?

Ron Paul: Yes. I think this is not a consequence of free markets. What's happening is there's transfer of wealth from the poor and the middle class to the wealthy. This comes about because of the monetary system that we have. When you inflate a currency or destroy a currency, the middle class gets wiped out, so the people who get to use the money first, which is created by the Federal Reserve System, benefit, so the money gravitates to the banks and to Wall Street. See, that's why you have more billionaires than ever before.

Today this country is in the middle of a recession for a lot of people. Michigan knows about it. Poor people know about it. The middle class knows about it. Wall Street doesn't know about it. Washington, D.C., doesn't know about it. But it's because of the monetary system and the excessive spending. As long as we live beyond our means, we are destined to live beneath our means. And we have lived beyond our means because we are financing a foreign policy that is so extravagant and beyond what we can control, as well as the spending here at home, and we're depending on the creation of money out of thin air, which is nothing more than debasement of the currency.

It's counterfeit. And it is a natural, predictable consequence that you're going to have people benefit from it and other people suffer.

So if you want to help the economy, you have to study monetary theory and figure out why it is that we're suffering. And everybody doesn't suffer equally, or this wouldn't be so bad. It's always the poor people, those on retired incomes, that suffer the most. But the politicians and those who get to use the money first, like the military industrial complex, they make a lot of money, and they benefit from it.

Matthews: Thank you. Thank you, Congressman. (Applause.)

Bartiromo: Senator McCain, what about that? How are you going to win the middle class back? Wall Street executives are making millions of dollars every year, paying tax rates of 15 percent, while the average guy out there is paying 30 percent in taxes. Is this system fair?

John McCain: They're paying their -- everybody's paying taxes, and wealth creates wealth. And the fact is that I would commend to your reading, Ron, "Wealth of Nations," because that's what this is all about. A vibrant economy creates wealth. People play -- pay taxes. Revenues are at an all-time high.

What's the problem? It's not just here in Michigan. It's in the heartland of America. We're losing industrial jobs, and we're not taking care of those who are left behind. Every town hall meeting that I have, people say, "I don't know if I'm going to have health insurance or not."

We're going to have to bring costs under control -- of health care -- if we're going to assure people that they're going to have retirement and they're going to be able to have the much-needed medical care that they are -- need as they grow older.

The fact is that Social Security's going broke. The fact is that Medicare is going broke. That's a little straight talk, and we've got to fix it. And we have to get spending under control.

And we Republicans, who came to power in 1994 to change government, government changed us. And unless we get spending under control and eliminate all this waste and pork-barrel spending -- and the latest is this public works, $21 billion worth of pork-barrel projects in public works, which the president should veto. Another one he should veto is the SCHIP program, which we should say -- take the "C" out of because now it's for everybody, like every other entitlement program. And by the way, a dollar a pack increase for cigarettes? So we want to take care of children's health and we want everybody to smoke? I don't get it. And we've got to get wasteful spending under control. (Applause.)