Good little CNBC anchor Trish Regan apparently really doesn't want her and her investment banker husband's taxes to go up since she thinks it's "un-American" for them to have to pay a higher rate than those with lower incomes. Isn't that special? I've got to say Joe Klein actually did a pretty good job here of knocking down Regan's arguments and her great concern for the rich when the Bush tax cuts go away.

Matthews: Trish, you’re with CNBC who covers business, but there you have a politician in the President of the United States with that term “drunken sailors spending” looping his head. This is a problem. How does he talk about getting the country moving again with a stimulus program, spending money when he’s buying this argument that spending is bad?

Regan: Well first of all he’s trying to blame President Bush for this and that’s why he’s saying you know the Republicans were the ones who did all this spending. But it’s his administration that came forward with this an $800 stimulus package, and Americans are now sitting back and saying, okay where did that money go? Why is it that we’re still looking at an unemployment rate that is in the 10%. They’re angry. They’re frustrated. They want to get back to work and it’s clear that the spending didn’t work. So he’s facing a real challenge.

Matthews: How does he sell more that he hasn’t been able to do? How does he sell more spending since the spending has gotten such a bad rap for not creating more jobs?

Regan: He can’t sell more spending right now. Perhaps the only way he could go and I don’t think he would do it if to offer tax cuts say to American businesses. It would be permanent tax cuts for the creation of jobs.

Matthews: I want to go to you Joe because the big argument the President…

Klein: Who said spending didn’t work? Who says the spending didn’t work?

Regan: No. I said 9.7% in unemployment. It didn’t work. People are out of work.

Klein: It might have been 15% unemployment if it hadn’t been done. The money went in tax cuts, one third went directly into the pockets of 95% of Americans. Another one third of it saved hundreds of thousands of jobs on the state level (crosstalk).

Matthews: This is the argument, that spending doesn’t work for business, that spending saved us from a Great Depression last year, but the President and the Congress are not passing spending bills right now. So they’re spooked. They’re afraid of spending.

Page: They are afraid of spending right now. Joe’s right, all of the spending hasn’t come on line and not all businesses are angry. Some businesses have benefited from this and the latest job figures is that show a little up tick here in the last, within the last month. We’re seeing these numbers go up and down right now but all the administration can do on that front is sell the idea that it would have been much worse. The base has already…

Matthews: You’re a political expert. You cover politics. Will the public buy the fact things could have been worse if it weren’t for that spending bill last year?

Page: Was it Tip O’Neill that said nobody ever won an election with that?

Matthews: No I think the line was Matthew Chandler, “What have you done for me lately”.

Regan: And the reality is…

Kay: That’s the big problem for the administration, they… there’s the President this week going out and saying put it in the hands of the Republicans, we go back to the battle where that they were the ones that created this problem. There’s a limit to much how that argument works and there’s a really big limit to the argument that we would be in a worse much position. We just can’t prove a negative.

Matthews: We are right now in July, coming up on November fast. What does he do to get the economy moving that he can’t spend money? What does he do?

Kay: I think he has to keep pushing private businesses. One of the other problems this administration has is they have a very poor relationship with private businesses. Businesses feel that they don’t have people in the administration who understand their concerns. They don’t feel that they’ve got what they want out of the administration; they don’t feel like they can approach them, they cannot talk to the administration and they don’t see any serious people there and they are very dissatisfied. That’s a real big functional relationship…

Regan: You’re absolutely right and that is something that I’m seeing on a regular basis. I mean I’ve seen the business round table come out and they’ve been pretty critical of this administration.. You’ve got more than a trillion dollars sitting on the balance sheets of American corporations… just sitting on it. (crosstalk)

Klein: That is such baloney. The business community is such a bunch of cry babies. They, especially the banks, the financial…

Matthews: Why are they angry at this president?

Klein: Because he’s taken away their, you know, their gravy train and he wants to regulate them a little bit which is something that the American people should be in favor of. Now let me just finish. Any Democrat in this era, in this country has a tough sell when it comes to larger government. That argument, by the way and that should be, he should be on the side of stimulus because that’s the…

Matthews: We had a $1.6 trillion deficit right now. How do you solve more deficit?

Klein: By hedging. By saying we also have to make government more efficient and for the Democratic Party that has become an absolutely necessary argument and Obama hasn’t done that. He hasn’t done something big like reinventing government. He hasn’t come out the public employees unions and their massive pensions. He has to do that if he wants to spend money.

Kay: The public opinion will be there for more spending if they saw the unemployment rate coming down.

Regan: Well the only way that’s going to come down if that if businesses...(crosstalk).

Matthews: Well let me go to Trish on tax cuts. You mentioned it. Everybody knows that the Bush tax cuts are coming to an end at the end of this year... by the way they know it now. They just heard it and that means that we're going to go from a rate of about thirty three... top rate.... of 33% to almost 40%. It seems that if business is mad about spending they're going to be even angrier about their taxes going up.

Regan: Well, they absolutely are and there's concern about it and this is one of the issues when it comes to hiring. They're hesitant right now about bringing more employees on board because one, you're not seeing final demand because consumers aren't spending that much. And number two they're dealing with the tax consequences of having more people in their companies. So that's definitely an issue.

Matthews: Clarence, would Democratic progressives and middle of the road Democrats buy the idea that if the only way to stimulate the economy for 2012, let's be honest, that's what we're working on right now...

Page: Right.

Matthews: ...we have to have a tax cut of some kind.

Page: Well only if it hits those at the bottom. If you'd expand earned income tax credit or give some kind of a job incentive, but I disagree that he ought to call off the Bush tax cuts.

Matthews: You think he ought to go back to the higher rates.

Page: It's not going to win Democrats.

Matthews: You say go back to the high rates, go back to...

Page: Absolutely.

Regan: Isn't there something inherently Un-American about the more money you make, the more money we're going to take from you.

Klein: No. No!

Regan: Even if they're not making $250,000 a year as a couple, you may aspire to make that and the government's going to take more. (crosstalk)

Klein: It's called the progressive income tax for a reason. Now conservatives want to abolish the income tax. That is so radical.

Regan: But you're discouraging productivity. (crosstalk) You're discouraging work.

Klein: So you want to hurt the people who are already hurting.

Page: Right.

Regan: What I'm saying is you don't necessarily want to discourage productivity. You want the country to grow.

Klein: There are ways to do that...

Regan: And there are ways to do that through tax cuts whether it be to...

Klein: Yes, productivity was really, really discouraged when President Clinton raised taxes. (crosstalk) I remember the Great Depression of the 1990's.

Regan: He did it at a time when the economy was growing. It's a very different situation.

Klein: He did it at a time when there was a recession.