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Speaker 1: Global business news twenty four hours a day. It's Bloomberg

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Speaker 1: dot Com, the Radio plus Mobile Act and on your radio,

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Speaker 1: this is a Bloomberg Business Flash and I'm Karen Moscow.

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Speaker 1: Future is moving lower this morning. Let's go to the

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Speaker 1: First Word Breaking news desk for today's morning call, and

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Speaker 1: here's Bill Maloney. Good morning, Bill, Good morning Karen. US

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Speaker 1: features are under pressure today. Doubtfure is currently lowered by

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Speaker 1: a hundred and forty three points sp STROP sixteen and

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Speaker 1: as a futures fall by forty nine. The US ten

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Speaker 1: year falls to one point seven percent, and Europe is

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Speaker 1: also trading lower, led by greater than two percent losses

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Speaker 1: in France, Germany, Italy and Spain. The British pound sinks

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Speaker 1: to its lowest since two thousand and nine, while Credit

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Speaker 1: Agricol lowered Brazilian GDP forecast to a minus three point

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Speaker 1: eight percent on the US economic front. At night, forty

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Speaker 1: five Market US Services and Composite p m I, at

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Speaker 1: ten o'clock New home sales, and at ten thirty Deale

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Speaker 1: Energy numbers Regarding earnings this morning lows. EPs was in

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Speaker 1: line Mobile I B and target. EPs missed find me

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Speaker 1: some yearly walsheet upgrades and downgrades at Jeffreys PTC Therapeutics

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Speaker 1: upgraded to hold, Radius Health cuts to hold at Goldman Sachs.

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Speaker 1: No Agian Cruise Line raised to neutral. Macy's cut the

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Speaker 1: whole versus by over at steeple Ford, cut to underperform

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Speaker 1: at Created Sweets and found the drill clip cut your

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Speaker 1: neutral over at sun Trust. Live from the First Breaking

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Speaker 1: News Desk on Bill Maloney, Karen A right, thanks billan

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Speaker 1: to hear live breaking news over here. Bloomberg type squawk

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Speaker 1: a goo on your terminal. That's s qu a w

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Speaker 1: k go and that's a Bloomberg business flash. Tom and

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Speaker 1: Mind mc karen, thanks so much. Sterling on that March

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Speaker 1: two thousand nine low for Sterling Weakness one thirties seven

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Speaker 1: fifty three was a daily low Bloomberg surveillance bunch of

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Speaker 1: by Investco. Factor based strategies can help investors focus on

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Speaker 1: dot com Flash High Conviction. Michael, we have an esteemed

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Speaker 1: guest on our debt and on our deficit. And if

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Speaker 1: I'll send the Harvard University Economics Professor and Chairman Emeritus

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Speaker 1: National Verrea for Economic Research. Before the break party, you

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Speaker 1: were talking about the debt to GDP ratio becoming worrisome,

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Speaker 1: and given the austerity that we have been through, and

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Speaker 1: given the fact that the spending is gonna have to

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Speaker 1: rise as entitlements rise with the baby boomers retiring, I

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Speaker 1: would presume that your argument would be, it's less about

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Speaker 1: lowering the debt than raising the GDP to try to

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Speaker 1: take care of the problem. Well, it would be nice

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Speaker 1: to get faster GDP growth, and that's obviously an important

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Speaker 1: goal in itself, but in terms of reducing the debt

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Speaker 1: to GDP ratio going forward, it has to be done

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Speaker 1: by either cutting spending, raising revenue, or some combination of

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Speaker 1: the two. You cannot continue to run primary deficits and

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Speaker 1: expect to see the GDP ratio come down. Where would

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Speaker 1: you cut um if what's left? Well, that's a very

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Speaker 1: good way to put it, because if you look at

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Speaker 1: the outlook for defense, and you look at the outlook

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Speaker 1: for non defense so called discretionary meaning annually appropriated programs,

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Speaker 1: both of those are now forecast to head down to

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Speaker 1: two and a half percent of GDP. Those are the

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Speaker 1: lowest numbers we've seen for spending in those programs since

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Speaker 1: World War Two. So what that means is that the

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Speaker 1: only way to slow the growth of government spending is

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Speaker 1: to slow the growth of so called entitlements, meaning social Security, Medicare,

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Speaker 1: and Medicaid. And now, folks, we go where we fear

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Speaker 1: to tread a Professor Feldstein, you are owned to be

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Speaker 1: of the elephant persuasion within your service to America and

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Speaker 1: your service particular with President Reagan. Have any of the

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Speaker 1: I mean, I assume you're not campaigning for the senator

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Speaker 1: from Vermont super Tuesday in Massachusetts. Got okay, I got

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Speaker 1: it right. Good, I got one thing right today. Have

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Speaker 1: any of the candidates called upon you for fiscal wisdom? Yes?

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Speaker 1: I I spent some time talking with Jeb Bush and

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Speaker 1: you can in the country. Is there any yeah, I mean,

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Speaker 1: if you want to name names, fine, if not, just

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Speaker 1: give us policies. But is there anybody out there who

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Speaker 1: has suggested anything by way of an economic policy over

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Speaker 1: the next four years that would do anything for the country.

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Speaker 1: Several of the Republicans have said quietly that, um, whatever

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Speaker 1: else they do, we're gonna have to do going forward

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Speaker 1: slow the growth of social security benefits. So Bush said

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Speaker 1: at Christie said that others have said that so, and

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Speaker 1: I think, um, I think that has to happen. What

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Speaker 1: about UH in the short run to raise the GDP?

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Speaker 1: To get back to what I was talking about, Is

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Speaker 1: there any policy that you would advocate or that anybody

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Speaker 1: is talking about at this point? Well, I think some

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Speaker 1: of the tax reforms that have been discussed would help.

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Speaker 1: I think if we changed the corporate tax rules, we

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Speaker 1: got rid of this UH strange system that only the

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Speaker 1: United States practices, in which funds coming back from UM

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Speaker 1: from U S subsidiaries abroad get hit with the second

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Speaker 1: round of taxation in the US. I think that prevents

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Speaker 1: companies or discourages companies from bringing those funds back, and

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Speaker 1: that hurts the growth of corporate investment and the economy

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Speaker 1: in the United States. So wing to a so called

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Speaker 1: UM global system of taxation UM the way other countries do,

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Speaker 1: I think would be something that would help, not overnight,

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Speaker 1: not in the first quarter, but over the next several years.

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Speaker 1: Are you, as we go into the rest of two

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Speaker 1: thousands sixteen, optimistic or pessimistic given all the uncertainty out there? Well,

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Speaker 1: I'm as I look at the election situation, I'm pretty pessimistic.

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Speaker 1: I don't know what would happen if Trump becomes president UH,

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Speaker 1: and I don't like what the two leading Democrats are saying.

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Speaker 1: So it's hard to be optimistic in that environment. As

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Speaker 1: far as the UH and again, that's that doesn't begin

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Speaker 1: to happen until two thousand and seventeen and beyond. But

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Speaker 1: it puts a cloud over things. In the meantime. We

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Speaker 1: have too many things we did not speak of, including

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Speaker 1: your important writings, Professor, on the future of Europe, and

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Speaker 1: that is something that we hope to get to with

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Speaker 1: you next time. Martin Feldstein is a ten emeritus professor

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Speaker 1: at Harvard University, and of course served with the Reagan administration,

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Speaker 1: among other public duties. The ten ure yield one point

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Speaker 1: seven in by two basis points curve flattening this morning,

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Speaker 1: well under a hundred beats the difference in Yale between

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Speaker 1: the ten year and the two year seven basis points

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Speaker 1: point nine seven of a percentage point. That's something that

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Speaker 1: bears watching. Sterling. We're on the Sterling Watch one eleven.

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