GLENN: From Radio City in Midtown Manhattan, third most listened to show in all of America. Hello, you sick twisted freak. Welcome to the program. My name is Glenn Beck. Governor Mitt Romney is on the phone with me now and we're just talking a little bit about the bailout package and whether or not it is something that we should do. Governor, I have been against the bailouts of, you know, Bear Stearns, all of these bailouts I've been against. You could have made the case on AIG because it's an insurance company but here we go with a massive program that you're kidding yourself if you don't think that it's at least $2 trillion that it's going to end up being. A lot of people say where's my bailout, why should I bail these people out on Wall Street that have caused this problem.

GOVERNOR ROMNEY: Well, there's no question no one has any interest in bailing out the guys on Wall Street who caused this problem. In many respects the term "Bailout" is a misnomer. The people who caused this problem ought to lose jobs, ought to lose wealth and are going to face some hard times by virtue of their mistakes but what we want to make sure is that the people on Main Street and the homes all over America, that these folks aren't the ones who are suffering and if we had a meltdown of our financial system where banks and financial institutions couldn't make loans, where your life insurance policy was suddenly worthless, where awful these kind of dramatic changes occurred, you'd hurt a lot of people. A lot of people would lose jobs. You could even throw the country into, well, a very severe recession or even the D word which I don't want to use, but it's that which the treasury secretary and the Federal Reserve are worried about and that's why they are taking such extraordinary action.

GLENN: Explain a little bit of what happened last Wednesday in layman's terms. I don't know if America really has a handle on, we were talking about shutting the country off because of nobody was making loans to each other. Nobody trusts each other anymore.

GOVERNOR ROMNEY: Well, the challenge all started with exuberance on the part of Republicans and Democrats to give mortgages to people who really didn't have the capacity to pay back the money. Everybody hoped they would but, you know, it was just irrational exuberance as Greenspan used to call it and so all these mortgages were handed out and then the banks, investment banks and other institutions held onto these mortgages expecting to get paid back and when the inevitable happened, when it was clear that people couldn't pay it back and started defaulting, we recognized that these banks and investment banks didn't have as much money as they thought they had and therefore they had to stop lending to new people because they didn't have money to lend. And when you start seeing people having to stop lending, well, then you mean folks can't buy cars, the kids can't get loans for school, that people can't buy homes and you could slam the whole economy shut. And it was that that the Federal Reserve feared and that's why they are proposing such dramatic action.

GLENN: Okay. The country is not for this bailout at this point, and I think that is because nobody has been nobody will use the D word. But if you don't stop this in its spiral out of control, businesses, I mean small businesses, big businesses, it just closes shop almost overnight. Yes or no?

GOVERNOR ROMNEY: And that's you are absolutely right. That's the fear. The fear is if all the banks start going under, all right, if the investment banks start going under or if they just can't make loans anymore because they don't have a strong enough balance sheet, not enough cash, if you will, and reserves to make loans to people, well, guess what happens in this country. We have a massive economic slowdown unlike anything we've seen for 100 years.

GLENN: That's a real concern, though. People dismiss that as, oh, that's crazy, that will never happen. That's an actual real consequence of doing nothing or doing the wrong thing.

GOVERNOR ROMNEY: Well, that's precisely what Secretary Paulson and Chairman Ben Bernanke and people on both sides of the aisle fear. And you can't be 100% sure that would happen but that's what they fear. They are not trying to save the jobs of the folks on Wall Street. They are not crying over those. What they're concerned about is that if Wall Street and the banking sector and the insurance companies go out of business, why, the entire country can go out of business.

GLENN: Okay. Now, the other side, because I am because I now understand exactly, this is not and correct me if you disagree with me but I believe this is not necessarily we all hoped that it would work but this is not necessarily designed to just put everything back in rosy condition. This is to land the plane even in the middle of a field or a forest, just have some pieces of the plane left and not kill everybody on board.

GOVERNOR ROMNEY: Yeah, Glenn, I think you hit it on the head because even when this is done, there's still going to be dramatic change in our financial markets. Institutions are going to stop we're not going to have investment banks like we used to have.

GLENN: Right.

GOVERNOR ROMNEY: New York may cease being the center of financial activity in the world.

GLENN: Which is gigantic. The other thing is, is that we would whether this works or not, we're probably going to live more like my grandparents lived that they were saving the bacon grease, they never threw scraps away, you know, my grandmother fixed our shirts and our pants. I mean, we were thrifty because they went through the Great Depression. We're going to have to, one way or another, reset pretty close to that kind of a lifestyle again.

GOVERNOR ROMNEY: Well, I don't know that we're going to go quite that far. I'm not planning on saving the bacon grease, but I think people are going to be thrifty. We are with our automobiles now. We're looking at far more fuel efficient cars, we're looking at turning down the thermostats in our homes. We're just saying, you know what, in a world like the one we're living in, we can't afford to be as extravagant with energy and with spending as we've been in the past. And by the way, government is the place to start. We're going to have to rein in these politicians that keep adding new programs and new spending ideas. It's part of what's precipitated the crisis we have.

GLENN: Okay. Now, the other argument against not doing anything would be that we're printing money in the basement. We're adding more debt to some we're doing exactly what caused this. We don't have the money to do it but we're like, oh, no, we can just carry that; don't worry, we're good for it and somehow or another we'll figure it out, things will get better. And so we're doing what we all did in our own personal lives, not everybody, but a lot of people did in their own personal lives, we're doing it on the federal government scale to the Nth degree. How does it not end up destroying the value of our currency and not destroy, you know, the integrity and the credit rating of the United States of America?

GOVERNOR ROMNEY: There's no question but that the decision that we're taking to add more debt is something which weakens our currency which makes us more vulnerable in a global competitive world and has the very aspects you are speaking about. It's a question of which one is the worst. Those that are studying the effects of the two directions are saying, look, we're better off here buying some of these mortgages that aren't performing well, that aren't being paid back, we're going to buy them and then over time we're going to try and collect as much as we can from the various homeowners and sell homes and try and create stability. Because what the Federal Reserve is saying is look, when things go down in a fire sale mode, you are going to be in a lot worse shape than if you try and have an orderly, if you will, reorganization of the effort. So they are going to say we're going to add some debt but at the same time we're going to pay it back in a slow but sure way. And that's the you know, that's the there's no easy answer here. There's no obvious answer but it looks like the best one at this current juncture.

GLENN: Okay. The Democrats are trying to add a stimulus package, they are trying to say that judges should be able to be involved and renegotiate your mortgage payment, et cetera, et cetera. Is there anything here that you say, you know what, I'm for this bailout package but I draw the line here; this cannot happen?

GOVERNOR ROMNEY: Yeah, at some point if you load an aircraft up with too much baggage, it won't take off. And this is an emergency effort to keep our economy from going into a tailspin and congress, you know, should act pretty narrowly and then if they want to do other things, fine. They just passed a $300 billion program to help people stay in their homes and they want to get credit for doing more. You know, let's do that on a separate day if we can. By the way, I think John McCain is right to say, look, if the Federal Reserve steps in or the Treasury steps in rather and keeps a bank from going bankrupt, we better not watch this CEO pay himself a $10 million bonus and so we're going to limit how much these guys can take out of these banks because we're not saving it for them. We're saving it for the citizens who want to borrow.

GLENN: Right. I don't have a problem with that but I do have a problem with telling people that they should have a salary cap.

GOVERNOR ROMNEY: Well, it's a compensation cap of some kind.

GLENN: But is it only for failures?

GOVERNOR ROMNEY: Oh, yes. It's only for those that take money from the government.

GLENN: Then I have no problem. If you fail, you get 10 bucks.

GOVERNOR ROMNEY: Exactly. It's like saying, if you want the government to bail you out, to buy your bad debt from you, then the government is going to have a say about how much you are going to pay yourself because we're bailing you out so you can keep in business and lend money to our citizens. That's why we're not to pay yourself a big bonus.

GLENN: Good. I don't have a problem with that. Governor, I know you've got to run. Thank you so much.

GOVERNOR ROMNEY: Glad to be with you.