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Speaker 1: This is Bloomberg Surveillance just certainly a heightened set of

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Speaker 1: risks in the U. S economy right now. And that's

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Speaker 1: because the United States isn't an island. We're part of

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Speaker 1: a global economy. Were throwing percentage on healthcare in ways

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Speaker 1: that no other country does. The big argument about accessive

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Speaker 1: low interest rates for very long term time is that

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Speaker 1: warped the investment pattern, real investment. Bloomberg Surveillance your link

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Speaker 1: to the world of economics, finance, and investment on Bloomberg Radio.

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Speaker 1: Good morning, everyone, Michael McKee and Tom Kane from Washington,

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Speaker 1: d C. After Super Tuesday. We've had some fabulous moments

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Speaker 1: here the last few days. Coming up the American economy

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Speaker 1: and our economic politics. Jared Bernstein joined us, joining us

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Speaker 1: with terrific research over the years on our dynamics of

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Speaker 1: inequality of income and wealth. Jared Bernstein, of course, uh

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Speaker 1: with a public service tenure with Vice President Biden as well.

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Speaker 1: Bloomberg Surveillance this morning and brought you by Cone RESIDUC Accounting,

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Speaker 1: tax advisory, regulatory changes can impact your business. See how

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Speaker 1: the experts at Cone RESNEC can help you navigate these complexities.

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Speaker 1: Find out more at cone resnec uh dot com and

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Speaker 1: Michael McKee uh. It's always a shock when you see it.

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Speaker 1: You never get over it. But earthquake news again, and

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Speaker 1: not of the funny kind whatsoever. No, this is a

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Speaker 1: magnitude eight point two quake some seven sixty three miles

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Speaker 1: southwest of Kuala Lumpur in Malaysia. There is the possibility

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Speaker 1: of a tsunami. We are waiting to find out whether

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Speaker 1: that is happening now. Magnitude eight point to earthquake is

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Speaker 1: about the size that struck Tokyo uh and Japan a

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Speaker 1: couple of years ago. However, um it all depends on

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Speaker 1: how deep it was and how far away it was

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Speaker 1: from land, and whether there's a tsunamic or not. So

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Speaker 1: we know there's a big earthquake, we do not know

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Speaker 1: what the outcome is going to be. Stay tuned. We'll

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Speaker 1: bring you the headlines as as soon as we get them. Yeah,

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Speaker 1: and looking at the map, still trying to locate any

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Speaker 1: number of them today. But this is again near UH

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Speaker 1: in the broader vicinity of Singapore as well. We'll give

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Speaker 1: you more details on that. This is just coming out now.

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Speaker 1: An earthquake near Malaysia with tsunami warning it was a

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Speaker 1: tsunami yesterday in politics, we thought we would give you

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Speaker 1: economic perspective. Jared Bernstein joins us. Now he's been such

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Speaker 1: a benefit to us with the Center on Budget and

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Speaker 1: Policy Priorities. Jared Burnstein, let me start first with Secretary Clinton.

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Speaker 1: You had service with Vice President Biden. Is there a

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Speaker 1: rationality to Secretary Clinton's budget promises? Oh? Yes, I think

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Speaker 1: there is. Uh. She is I think pretty disciplined in

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Speaker 1: her proposals in terms of figuring out how you raise

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Speaker 1: what we call here in Washington the pay for us,

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Speaker 1: that is, the revenues to pay for or the ideas

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Speaker 1: that she's espousing. Now, what she can tell us, and

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Speaker 1: I don't know that anyone could, is how she's going

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Speaker 1: to get a gridlocked Congress to get behind her. These

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Speaker 1: are not the kinds of ideas that you can do

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Speaker 1: by executive order or rule change, the kind of thing

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Speaker 1: the president can do herself. So there is the political dimension.

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Speaker 1: But I think it's actually interesting people don't typically accuse

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Speaker 1: Sari Clinton's numbers of not adding up, because I think

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Speaker 1: they probably do. So much of the critique on the

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Speaker 1: other side has been a budget policy of fiction, and

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Speaker 1: I think that's coming really from all angles. I'm remarkable, Jared.

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Speaker 1: All people that you don't speak to agree with Jared

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Speaker 1: Bernstein on this matter. What is the level of fiction

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Speaker 1: you here in Republican budget rhetoric right now? Is it

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Speaker 1: worst ever? Or is this just a normal process. It's

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Speaker 1: worst ever? And I can actually quantify that. I mean

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Speaker 1: everyone always says worst ever, but I can actually quantify it.

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Speaker 1: If you look at the largest tax cuts that have

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Speaker 1: ever occurred, they are significantly smaller as a share of

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Speaker 1: GDP than any of the ones the Republican candidates are proposing. Now.

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Speaker 1: That might be fine if if you really want to

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Speaker 1: cut the heck out of taxes, if that's where you're

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Speaker 1: coming from, and some people are, But in order to

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Speaker 1: not explode the deficits, you'd have to cut so much

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Speaker 1: other spending literally up to under some of these plans,

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Speaker 1: and nobody will ever accomplish that. It simply won't happen.

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Speaker 1: So yes, uh, deep fantasies on on the on the

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Speaker 1: Republican side in terms of taxics and to be fair

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Speaker 1: and on partners in here, um Bernie Sanders plan involves

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Speaker 1: a level of tax increases that we haven't seen in

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Speaker 1: the past, such that governments as a share of the

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Speaker 1: economy would go from its kind of traditional level of

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Speaker 1: about maybe to something closer. Now, that's not uncommon in

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Speaker 1: European social democracy. Said, in fact, the candidate tells you

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Speaker 1: that that's where he's coming from, So he's not trying

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Speaker 1: to pull the wool over anyone's eyes. But that's a very,

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Speaker 1: very different the sort of relationship between government and the

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Speaker 1: economy that we've historically had. But as you try to

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Speaker 1: put together UH an economic program for a candidate for

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Speaker 1: an administration, it's easy to move the numbers around, but

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Speaker 1: it's very hard to move public opinion around. Americans, UH

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Speaker 1: tax burden is much lower than it has been in

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Speaker 1: a very long time, and yet people would totally disagree

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Speaker 1: with what I just said and think that they are

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Speaker 1: overtaxed and underappreciated by their government. And you see the

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Speaker 1: Trump people, the Trump fans don't care that his numbers

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Speaker 1: make no sense. So how do you deal with that

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Speaker 1: part of it? Well, you are kind of telling the

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Speaker 1: story of my life right now. Uh, not to get

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Speaker 1: down in the psychiatrist couch, but it is pretty hard

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Speaker 1: for those of us whore in the facts business to

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Speaker 1: be operating in a world where facts don't have a

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Speaker 1: lot of of traction. I will say this, though, it's

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Speaker 1: easy need to kind of cast a spurt. I'm not

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Speaker 1: saying you were doing this, but it's easy to cast

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Speaker 1: dispersions at at people for their misperceptions. But I think

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Speaker 1: you have to admit that the federal government is uniquely

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Speaker 1: dysfunctional and not working in any way that any of

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Speaker 1: us would recognize. I mean, you guys go to work

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Speaker 1: and do your jobs. I go to work and do

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Speaker 1: my job. Lots of people who are angry right now

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Speaker 1: go to work and do their jobs. And yet for

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Speaker 1: all the taxes they're paying, and you're right, in historical terms,

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Speaker 1: they're not particularly high. Uh may feel that the people

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Speaker 1: on the other side of that of those tax receives

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Speaker 1: and don't go to work and do their job, And

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Speaker 1: then that source of things jared to switch gears. So

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Speaker 1: much of it is about economic growth. I believe somebody

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Speaker 1: long ago said, morning in America. What part of the

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Speaker 1: day is it in America? Right now? It seems like

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Speaker 1: a lot of people are doing better, are we really?

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Speaker 1: I wouldn't say a lot of people are doing better.

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Speaker 1: I would say it's kind of maybe mid afternoon. Um,

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Speaker 1: it's hard to say because we don't know where the

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Speaker 1: express and is. All we know is that this expansion

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Speaker 1: is about six and a half years old, and that's

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Speaker 1: longer than the average expansion. I think the idea of

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Speaker 1: morning in America kind of comes from the early nineteen

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Speaker 1: eighties being a period after a pretty deep recession, and

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Speaker 1: it was it looked, I think, very plausible that growth

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Speaker 1: was going to was going to increase. What they didn't

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Speaker 1: see then, and what we know now is that that

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Speaker 1: growth is going to be highly unequal. So yes, while

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Speaker 1: the economy has been growing consistently for six and a

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Speaker 1: half years, the labor market is particularly strong with low

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Speaker 1: unemployment and decent job growth, the benefits of growth are

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Speaker 1: only now beginning to reach more people. And that's pretty

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Speaker 1: late in the game for that to be occurring. Well,

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Speaker 1: I go back to, Um, what I was asking earlier

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Speaker 1: about how you deal with that, is there is there

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Speaker 1: a carrot that you offer people? Uh? Do you have

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Speaker 1: to be willing at this point to accept some additional

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Speaker 1: deficit spending to cut taxes again or as cutting taxes

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Speaker 1: just uh not gonna work given the level of expenditure

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Speaker 1: we have. Well, frankly, I don't think we can afford

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Speaker 1: to be cutting taxes given what we're looking at, even

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Speaker 1: just in terms of demographics. If we want to have

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Speaker 1: a sustainable UH budget going forward, we know that folks

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Speaker 1: like me and maybe you guys, I can't see you.

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Speaker 1: It's it's the radio are aging baby boomers, and based

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Speaker 1: on demographics alone, we're going to need to somewhat ratchet

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Speaker 1: up our expenditures to meet the entitlement programmer UH, social Security,

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Speaker 1: medicare to meet those demands. So I don't see a

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Speaker 1: rationale towards, you know, certainly large or significant tax cuts.

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Speaker 1: I know that I suspect Canada Hillary Clinton has talked

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Speaker 1: about at some point coming forward with some sort of

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Speaker 1: a tax cut for the middle class. We'll see what

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Speaker 1: that looks like. But I kind of walk around thinking

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Speaker 1: that the way forward is not so much to contemplate

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Speaker 1: cutting taxes. It's to think about an agenda that will

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Speaker 1: help reconnect people prosperity to the growing economy. So it's

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Speaker 1: really focused more on pushing back on these inequality trends

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Speaker 1: we've been discussing. Let's come back with Jared Bernstein with

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Speaker 1: the Center on Budget Policy Priorities will continue our discussion

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Speaker 1: here of the fiscal side and economic side. Um is

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Speaker 1: the auction process gets interesting to Michigan and then onto Florida.

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Speaker 1: Two weeks from yesterday, Mike McKee, I've never seen an

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Speaker 1: earthquake announced with so little information on the internet. It

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Speaker 1: is Mentawai. This is off of Bloomberg News. It is

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Speaker 1: a huge earthquake near Mentawi m E n t a

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Speaker 1: w a I southwest seven sixty three miles from Kuala Lumpur, Malaysia,

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Speaker 1: and it's just original. How little information there is on

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Speaker 1: this right now. I'm finding very interesting because there is

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Speaker 1: there are headlines out from the Malaysians and from the

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Speaker 1: Indonesian quake agencies, but nothing on the U S Geological

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Speaker 1: Survey earthquake site yet. So um Usually the U S

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Speaker 1: g S is sort of the worldwide authority and you

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Speaker 1: look to them first. So this is an interesting situation.

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Speaker 1: We will of course continue to monitor this and bring

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Speaker 1: you any news that we can as soon as we can,

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Speaker 1: and we want to be careful on that because again,

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Speaker 1: the news flow off of this is very very um

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Speaker 1: very very challenging. Will continue to give you headlines because

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Speaker 1: off the Bloomberg and eight point two a very large

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Speaker 1: earthquake uh in the vicinity of Malaysia and Singapore as well.

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Speaker 1: Futures of negative four down features of negative thirty oil

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Speaker 1: finally weaker after two three good days. Brent crude thirty

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Speaker 1: six seventy per barrel down oh ten cents this morning.

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Speaker 1: Now let's bring in Michael R. With the latest world

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Speaker 1: in national headlines. Michael, thank you very much. Mike and Tom.

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Speaker 1: Donald Trump and Hillary Clinton have wide their leads after

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Speaker 1: Super Tuesday contests. Overall, Trump and Clinton each one seven states.

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Speaker 1: As you had mentioned earlier, there is word of an

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Speaker 1: eight point to earthquake that has hit off Quala Lumpur.

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Speaker 1: Malaysian authorities. They're checking to see if there are any casualties,

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Speaker 1: but nothing yet so far from the U S Geological survey.

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Speaker 1: The UN Security Council votes today on the resolution that

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Speaker 1: would impose the toughest sanctions on North Korea in two decades.

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Speaker 1: The US and North Korea's traditional ally China, spent seven

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Speaker 1: weeks negotiating the new sanctions in response to be Young

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Speaker 1: Yang's latest nuclear test and rocket launch. Both are in

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Speaker 1: defiance of previous Council Resolutions Global News twenty four hours

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Speaker 1: a day, powered by our twenty four hundred journalists more

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Speaker 1: than a hundred fifty news bureaus from around the world.

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Speaker 1: I'm Michael Barr, Mike, Tom and Michael. Thank you so much.

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Speaker 1: See in weeker one fourteen twenty nine. That's a big

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Speaker 1: move over three days, one four nine from one twelve

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Speaker 1: handle earlier euro surance of one oh eight fifty seven

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Speaker 1: as well from wash Rington. This is Bloomberg's surveillance. There's up.

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Speaker 1: They brought to you by the Town of Hempstead Industrial

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Speaker 1: Development Agency. Find out how to put the Town of

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Speaker 1: Hempstead i DA to work for your business. Called one

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Speaker 1: h i d A dot org