Speaker 1: This is Bloomberg Wall Street Week with David Weston from
Speaker 1: Bloomberg Radio.
Speaker 2: The problem is that's led us two years and years
Speaker 2: of borrowing too much. We now have a debt that's
Speaker 2: about to be at record levels, interest payments that are
Speaker 2: the fastest growing part of the budget about to be
Speaker 2: larger than defense.
Speaker 3: That was Miyamaguinnis of the Committee for a Responsible Federal
Speaker 3: Budget talking about the great and growing US federal debt
Speaker 3: and deficit. This is a special Wall Street Week podcast,
Speaker 3: and we sat down with former Treasury Secretary Bob Rubin
Speaker 3: to take us through not just where we are now,
Speaker 3: but about how he helped President Clinton engineer a way
Speaker 3: out of a similar situation some thirty years ago when
Speaker 3: he ran the White House Economic Council. To fix the problem,
Speaker 3: we first have to figure out how we got here.
Speaker 3: Some like presidential candidate Nikki Haley say that the problem
Speaker 3: is that we're spending too much.
Speaker 4: Do you have to start cutting what you spend? Why
Speaker 4: is it everybody in this room balance as a budget.
Speaker 4: I balanced budget is Governor of South Carolina? Why is
Speaker 4: Congress the only group that refuses to balance a budget.
Speaker 3: Others like Willet Advisors Steve Ratner point to the Trump
Speaker 3: tax cuts.
Speaker 5: There are a lot of people who basically on Wall Street,
Speaker 5: who you and I would know, who voted for Trump
Speaker 5: once or even twice. Basically, look, I don't like the guy,
Speaker 5: but I like the policies, and they got what they wanted,
Speaker 5: the tax of the TCGA, the Tax Cut and Jobs
Speaker 5: Act being the most prominent.
Speaker 3: And the answer likely is both. That was why, according
Speaker 3: to Larry Summers, President Clinton both raised taxes and cut
Speaker 3: spending in his nineteen ninety three Omnibus Budget Reconciliation Act.
Speaker 3: That was the last time that the federal government really
Speaker 3: got serious about addressing the debt.
Speaker 6: I think he laid out the case, he brought people together,
Speaker 6: He was willing to do things that were painful for
Speaker 6: the people who were his friend. He was able to
Speaker 6: explain the case to the American people, and that's the
Speaker 6: kind of leadership we're going to need, and he reaped
Speaker 6: a benefit.
Speaker 3: And to explain to us where we are in the
Speaker 3: Debton deficit and where we were back in nineteen ninety three,
Speaker 3: were welcome.
Speaker 7: Now.
Speaker 3: One of the architects of that plan that President Clinton pursued.
Speaker 3: He is Bob rowin former Treasury Secretary. So, Bob, thank
Speaker 3: you so much for being on Wall Street.
Speaker 7: Rig David happy to be with you.
Speaker 3: So at the time, you actually were Director of National
Speaker 3: Economic Council and you helped put together a plan with
Speaker 3: Lloyd Benson the Treasury, but President Clinton really pushed it through.
Speaker 3: Give us a sense of how bad the problems were
Speaker 3: you were facing. Then what caused you to do what
Speaker 3: you did in ninety three Act.
Speaker 1: David, we met with the president elect Governor of Arkansas
Speaker 1: in Little Rock after the election, the economic team, the
Speaker 1: income economic Team, and we talked to him about what
Speaker 1: kind of an strategy he should have, and he said,
Speaker 1: listening to all this, our deficit is a threshold issue.
Speaker 7: And who want everything else?
Speaker 1: We've got to do that because we have to get
Speaker 1: our fiscal house in order, and that was really the
Speaker 1: our focus. Now we did it in the same time
Speaker 1: we did public investment. But the pressures, I think were
Speaker 1: very substantial. There was a lot of concern in the
Speaker 1: business community, there was a lot of concern in the markets,
Speaker 1: and there was a real public political environment, which unfortunate
Speaker 1: we don't have today. He not only had the substance
Speaker 1: of it, which is President Clinton, the few that this
Speaker 1: was the rest of the issue at threshold issue. We
Speaker 1: also have a political environment in which it was doable.
Speaker 3: If we can try to tease those two things out.
Speaker 3: How much of it was the market reaction what you
Speaker 3: were seeing? Basically we have the famous incidents supposedly where
Speaker 3: Jim Carvell said, I want to come back to the
Speaker 3: bond market.
Speaker 1: Well that was James said that he wanted to come well,
Speaker 1: because what happened there was we were having a debate
Speaker 1: within the administration should we focus on fiscal matters or
Speaker 1: should we focus on public investment.
Speaker 7: We end up doing both, but with a program, the ninety.
Speaker 1: Three Deaths Production program that was very heavily focused on
Speaker 1: death production. And that's when James said he wantause. We argued,
Speaker 1: and I think rightly argument and it turned out to
Speaker 1: be correct that markets would react very favorably if we
Speaker 1: were serious, and also the better reserve would react very favorably.
Speaker 1: So James and responses all that said he would I
Speaker 1: to come back in his next life is the bond market.
Speaker 3: So that is a somewhat market oriented approach. I mean,
Speaker 3: you'd come out of Goldman Sachs, you knew the markets
Speaker 3: terribly well you took that sort of approach. The whole
Speaker 3: question how much that that drove what it was? Was
Speaker 3: it really just almost dollars and cents in what was
Speaker 3: going on in the markets.
Speaker 1: It was more than just the markets, and I think
Speaker 1: this is something unfortunate that it hasn't been focused on,
Speaker 1: But it was the market's David. And when we got
Speaker 1: serious about deficit reduction, it was very favorable for the markets.
Speaker 1: And also green Spend reacted very well in terms of
Speaker 1: maintaining a relatively livable with a practical speaking, a FED
Speaker 1: funds rate that was consistent with growth, but it went
Speaker 1: way beyond that.
Speaker 7: We wanted to have the resilience after.
Speaker 1: If you're going to have if you have an economic
Speaker 1: or a noir security emergency of some sort, you want
Speaker 1: to be able to deal with it without creating fiscal havoc.
Speaker 1: And another thing, when I was at Goldman Sacks and
Speaker 1: Steve Freeman and I were the co CEOs of Coleman
Speaker 1: Sacks in ninety one and in ninety two, one thing
Speaker 1: that I had the impression was that business was very
Speaker 1: concerned about our fiscal position, not only because the fiscal position,
Speaker 1: per say, but also because it gave him the feeling
Speaker 1: government was incapable of dealing with our problems. So business confidence,
Speaker 1: I think was a very important factor. And once we acted,
Speaker 1: I think it had a really positive effect on business confidence.
Speaker 3: Giving me a sense of what that means as a pracuamatory,
Speaker 3: does that translate into investment or lack of investment?
Speaker 7: Exactly?
Speaker 1: Exactly what well investment plans in terms of expansion. John
Speaker 1: Maynor Kaine famously referred to animal spirits in his letter,
Speaker 1: his famous letter to President Roosevelt, and animal spirits make
Speaker 1: a confidence makes a very big difference. And yeah, it
Speaker 1: does in terms of hiring plans, expansion plans, investment, And
Speaker 1: that absolutely is what happened.
Speaker 7: Talk about the politics of it.
Speaker 3: You said that, then governor about to be President Clinton
Speaker 3: came in and said, that's a threshold issue of the deficit.
Speaker 3: It's hard to imagine right now an incoming president saying
Speaker 3: the same thing. But give me a sense of what
Speaker 3: was going on politically in the country that obviously President
Speaker 3: Clinton was reflecting to some extent what he thought the
Speaker 3: people felt.
Speaker 1: I think there was a feeling there was a broad
Speaker 1: public concern about our fiscal position. And then Songus ran
Speaker 1: for Paul Songus ran for president on a fiscal the
Speaker 1: unfortunately died as you know, in that process, but on
Speaker 1: a fiscal discipline plank if you want to call it that,
Speaker 1: or program, let's say, and that attracted a lot of
Speaker 1: favorable attention.
Speaker 7: Then Ross Bureau came along and he ran.
Speaker 1: Also on a fiscal discipline theory, and he got about
Speaker 1: nineteen percent of the vote if I remember correctly.
Speaker 7: President Clinton believed it to begin with.
Speaker 1: But then you had the politics I guess you call
Speaker 1: converge around this point of view as you saw songis
Speaker 1: and then as I said, Perro and President Clinton made
Speaker 1: that central to his economic program. But you know, David,
Speaker 1: he always combined it with vigorous public investment. Now, once
Speaker 1: we got there, what we found was that the prospects
Speaker 1: that the outgoing Bush omb was providing had gotten much worse,
Speaker 1: and so it forced us to cut back on what
Speaker 1: we would have done in public investment and to increase
Speaker 1: what we did on definit reduction.
Speaker 3: So when you decided to address this, I should say
Speaker 3: the president decided, The President.
Speaker 7: Absolute decided he was terrific. David.
Speaker 1: He really was steeped in this. So while all of
Speaker 1: us gathered together. We really were gathering with somebody who
Speaker 1: were ready was really very highly heavily.
Speaker 7: Informed on this.
Speaker 1: I mean by this, I mean on economic policy ramifications
Speaker 1: of various measures one might take.
Speaker 3: When one goes back and looks at the package, it
Speaker 3: looks like there was both tax increases as well as
Speaker 3: spending cuts.
Speaker 7: Correct.
Speaker 3: Was that the theory from the beginning, we have to
Speaker 3: do it both ways at the same time.
Speaker 1: The theory, well, the theory was we would do fifty
Speaker 1: to fifty, and we did do fifty to fifty. We're
Speaker 1: discussing then and not now. But if you looked at now,
Speaker 1: I think, unfortunately we face a very different empirical situation.
Speaker 1: But in those days, that exactly was our theory, and
Speaker 1: that's what we did.
Speaker 3: We're going to come back and talk about now, but
Speaker 3: before that, give us a sense of the effects once
Speaker 3: you got this through. By the way, it was a
Speaker 3: near run thing politically, as I recall the Towers we won.
Speaker 1: We had by one vote if I remember correctly, in
Speaker 1: the House of Representative and it was a tie I
Speaker 1: guess in the Senate and Gork cast inciting vote in
Speaker 1: our favor obviously, but it was a very close thing
Speaker 1: and I remember being in the Oval Office the night
Speaker 1: of the vote. You know, there's that little room that
Speaker 1: is adjacent to the Oval Office is the President's room,
Speaker 1: and we were all sitting there watching a television as
Speaker 1: people voted, and it was a very near thing, in
Speaker 1: a really nailbier.
Speaker 3: How did the results of it through the rest of
Speaker 3: the Clinton term.
Speaker 7: We're going to take it through there.
Speaker 3: Compare with what you expected when you first got it through.
Speaker 3: If you'd written down and said this is what I expect,
Speaker 3: it's good to compare with what happened. I gotta compare,
Speaker 3: you know, David.
Speaker 1: I think one thing that I saw and I think
Speaker 1: was right, was that our fiscal situation, for the reasons
Speaker 1: I already discussed, was having a real adverse effect on
Speaker 1: business confidence. And I thought if we did this, there
Speaker 1: was a reasonable chance that could affect that. But I
Speaker 1: think the effect of it was much greater than I
Speaker 1: thought it would be. President Clint went through eight years
Speaker 1: in which the business community felt that he related to
Speaker 1: the issues that they faced. They didn't always agree with them,
Speaker 1: or he didn't always agree with them, but I think
Speaker 1: they really felt that he related to their issues, and
Speaker 1: I think this played a major role in that. I
Speaker 1: thought something like that would happen, at least that would
Speaker 1: have been my expectation, But I think it happened to
Speaker 1: a greater degree than I thought. The market reacted very well,
Speaker 1: as you may or remember in terms of interest rates.
Speaker 3: One big difference between that now is we were very
Speaker 3: concerned at the time. I remember this personally with Japan.
Speaker 3: The rise of Japan is that I can have power
Speaker 3: that they basically had a better mouse.
Speaker 7: Trap than we did and they take us over.
Speaker 3: How important was that in helping drive this through to
Speaker 3: say we've got to actually catch up with Japan.
Speaker 1: As you correctly say, David, Japan reviewed as a goliath.
Speaker 1: And I can remember this so well when I was
Speaker 1: at Golden Sacks, because we were very much focused on
Speaker 1: where should our business go, where should we focus? And
Speaker 1: we very much focused on Japan for the very reason
Speaker 1: you just said, And I think that was part of it.
Speaker 1: I think there was a feeling of a real competitive urgency,
Speaker 1: if you will, imperative, real competitive imperative with respect of Japan.
Speaker 7: But it was more than that, David.
Speaker 1: I think there was just a general recognition, which we
Speaker 1: don't have today in the country that unsound, fiscal conditions
Speaker 1: were very dangerous, which I think they are very dangerous economically,
Speaker 1: and people sort of connected the dots and there was
Speaker 1: broad based support for fiscal discipline. It was a political
Speaker 1: reality within the context of which President Clinton acted and
Speaker 1: then eventually and Congress came along with it, as you said,
Speaker 1: by a very very narrow margin.
Speaker 3: You mentioned Chairman Greenspan, Alan green spent at the time.
Speaker 3: What role did he play and the FED play throughout
Speaker 3: this entire process.
Speaker 7: Well, I will tell you what it was.
Speaker 1: It's not been written this way sometimes, but Alan green
Speaker 1: Spin came down to a little rock. He conferred with
Speaker 1: the advice or President elect Clinton, and I think his
Speaker 1: advice was very sound. On the other hand, there was
Speaker 1: never although it was legs in some places that there
Speaker 1: was never a deal, and I've asked both President Clinton
Speaker 1: and Alan Greenspan about this. There was a never deal
Speaker 1: between the two of them pursuing to which, if you
Speaker 1: President Clinton will reduce the efic it, I'll keep interest
Speaker 1: rate flow.
Speaker 7: That never occurred.
Speaker 1: But what did occur was the advice that Alan green
Speaker 1: Spin gave to President Clinton and all of us, because
Speaker 1: we had a very good relationship about what at least
Speaker 1: he thought, and then we would deal with it as
Speaker 1: we saw fit.
Speaker 3: One of the key elements, as I understand it, economists
Speaker 3: tell us economic growth is productivity. Was there an effect,
Speaker 3: in your opinion, on productivity? What was the effect? How
Speaker 3: large was it?
Speaker 1: There was a substantial effect on productivity. And it's sort
Speaker 1: of interesting, at least in my opinion, David, because this
Speaker 1: was also, as you may remember, the nineties at the
Speaker 1: time the technology technology development took off, but even more important,
Speaker 1: maybe the application of technology took off. But it happened
Speaker 1: here and it didn't happen in Europe to merely the
Speaker 1: same degree. So the question is why, And I'll tell
Speaker 1: you what I think. I think the administration made enormous
Speaker 1: and President Clinton made enormous difference in this respect because
Speaker 1: I think what happened was what you were getting out before.
Speaker 1: I think there was an atmosphere of confidence. And it
Speaker 1: doesn't mean, as I said before, I'm repeating myself, it
Speaker 1: didn't mean the business agree with everything we did, because
Speaker 1: they didn't. But fundamentally they believed that this was a
Speaker 1: sound administration. And I think that had an enormous impact
Speaker 1: on investment and therefore on productivity. So we had a
Speaker 1: productivity boost from both the technology development and application, which Europe
Speaker 1: which had a different sort of political environment and a
Speaker 1: different sense of confidence in their case lack thereof.
Speaker 7: Than we did.
Speaker 3: So, Bob, we've been talking about what happened in ninety
Speaker 3: three when you were there in the White House. Now
Speaker 3: let's bring it forward to today, because there's a lot
Speaker 3: of talk about the debt and deficit, which is frankly
Speaker 3: a lot larger both and nominal now and in comparative
Speaker 3: dollars than it was back then.
Speaker 7: Let's talk about.
Speaker 3: What you learned in ninety three, what you did in
Speaker 3: ninety three, they could continuably be applied to twenty twenty four.
Speaker 1: It's also a lot bigger, David, And this is the
Speaker 1: really important thing as a percentage of GDP and the
Speaker 1: preenet of our economy, and that I think is the
Speaker 1: critical point. I think that the risks that we identified then,
Speaker 1: the multiple risks, the same as they are today. I
Speaker 1: think that the risks are even greater today because our
Speaker 1: debt GDP ratio is a proximal sumbio estimated about one
Speaker 1: hundred percent right now.
Speaker 7: It's the highest in the history of the country.
Speaker 1: Except for nineteen forty six and forty seven we were
Speaker 1: coming back out of World War Two. I think the
Speaker 1: risks are enormous, and some of them are materializing already,
Speaker 1: like higher interest rates and effect on inflation in part
Speaker 1: not full, and others haven't materialized yet, but I think
Speaker 1: they're out there and sooner related will materialize if we
Speaker 1: don't correct our our physical trajectory.
Speaker 3: You talked about some of the market indicators and even
Speaker 3: forces that you saw in ninety three that sort of
Speaker 3: pointed you in a direction quite at present, Clinton, in
Speaker 3: the direction of really making the depth set.
Speaker 7: Of special issue.
Speaker 3: Are we seeing those indicators of their forces today in
Speaker 3: the markets.
Speaker 1: I think that we are seeing the effects, but it's
Speaker 1: unfortunately from a political point of view, David, I don't
Speaker 1: think they're getting connected in a meaningful way with deficit
Speaker 1: reduction sure interest. I mean, the long the tenure was
Speaker 1: about I think one and a half percent, say two
Speaker 1: years ago, and now it's about four and a half percent.
Speaker 6: Now.
Speaker 7: That's a lot of factors that go into that, but
Speaker 7: I think.
Speaker 1: Part of it is our fiscal situation and the effect
Speaker 1: that's had on inflation. I think it's been an aggravator
Speaker 1: of he if you will an effect on inflation. And
Speaker 1: I think there's a general concern about the imbalance between
Speaker 1: supplying demand for savings and the excess demand that's created
Speaker 1: by our deficits, but it's not Unfortunately, from political point
Speaker 1: of view, I don't think the dots are being connected
Speaker 1: the way they were back in ninety two to three
Speaker 1: when we acted. Ninety three we acted, but ninety two
Speaker 1: when preddent Clinton was putting his plans together.
Speaker 3: There's a lot of talk these days when we talk
Speaker 3: about the feed about the neutral rate and debate about
Speaker 3: whether it is the neutral rate higher. And I guess
Speaker 3: my question is does the deficit and the debt normally,
Speaker 3: all the things being equal, drive the neutroid higher?
Speaker 1: I think over time, but I think you can also
Speaker 1: have a long period of time. And we had a
Speaker 1: long period of time, David, actually a long long period
Speaker 1: of time during which all this was having little effect,
Speaker 1: and then all of a sudden that the tenure went,
Speaker 1: as I said, a moment ago, from roughly one and
Speaker 1: a half to roughly four and a half. And I've
Speaker 1: been around markets, and these policies were for five decades now,
Speaker 1: and there's certainly our periods when you can have a
Speaker 1: long time when reality is out of or what's happening
Speaker 1: is out of sync with reality. But that doesn't go
Speaker 1: on forever, and when it corrects, it can correct savagely.
Speaker 1: A good example was the Eurozone, the sovereign Eurozone crisis.
Speaker 1: For years, a Greek bondstrated roughly speaking parody with ghivlie
Speaker 1: take with German buns, and then all of a sudden
Speaker 1: it exploded. And I think it's a good example of
Speaker 1: how what isn't sensible ultimately doesn't continue.
Speaker 3: There's the politics of it, which I want to talk about.
Speaker 3: Before that, Let's talk about the approach taken to it.
Speaker 3: Let's talk about, for example, the Biden administration. We can
Speaker 3: talk about the Trumpet search if you walk, but the
Speaker 3: Biden is when you were there back in the nineties,
Speaker 3: you came from Golden Sachs, you had other people there
Speaker 3: who knew the markets pretty well. There was a healthy
Speaker 3: dose of how are the markets reacting this? What does
Speaker 3: that do for us? Do we still have that or
Speaker 3: is it more ideologically driven because some people think we've
Speaker 3: sort of shifted the orientation, particularly the Democratic Party, more
Speaker 3: toward protectionism, more toward populism.
Speaker 7: Well, you've asked multiple questions, so I'll give you. I'll
Speaker 7: give you my view.
Speaker 1: I've given a lot of thought this, and I know
Speaker 1: the people there pretty well. If you look at the proposals,
Speaker 1: the major policy proposals that President Biden made, they were
Speaker 1: all paid for in the proposals. Now, ultimately they had
Speaker 1: to go through Congress, and when they went through Congress,
Speaker 1: they came out, some of them paid forwards and some
Speaker 1: of them not. I think he's actually pretty good on this.
Speaker 1: I think there are other issues were I might have
Speaker 1: a different view than he does, or maybe I would
Speaker 1: have it so say it an altered view rather than
Speaker 1: a different view. But I think on fiscal stuff, actually
Speaker 1: he's got a pretty good sense of it. I think
Speaker 1: on the proposals that they had three major bills I
Speaker 1: were chips and infrastructure, and in the original proposal and
Speaker 1: then of course for that build back better and all
Speaker 1: of those if you look at them, and this is
Speaker 1: correct because I looked at them, all of those the
Speaker 1: proposals were fully paid for that to go through Congress,
Speaker 1: and in Congress they in some cases they lost the
Speaker 1: pay for us. You know you mentioned I forgot how
Speaker 1: you put it now before? But did you say populism
Speaker 1: or progressive? Yeah, populism. If you look at what has
Speaker 1: been referred to as industrial policy, and they referred to
Speaker 1: as industrial policy, it's their label, but it's not picking
Speaker 1: winners and losers. Now it may be in the minds
Speaker 1: of some of those people, but if you look at
Speaker 1: those proposals, and I've talked to their people about this
Speaker 1: a lot, I think they actually make a lot of
Speaker 1: sense on a purely economic basis. Their externalities they basically
Speaker 1: dealt with, short for, with insecurities in our system, excuse me,
Speaker 1: in our economic system with respect to our economic security
Speaker 1: or economic function are geopolitical or national security functioning that
Speaker 1: markets were not going to meet and had to be
Speaker 1: met by government. So that I think is not industrial
Speaker 1: policy in the traditional sense. And let's pick winners and losers.
Speaker 1: It was let's fill holes that the private sector simply
Speaker 1: isn't filling, and those are holes of economic and incial security.
Speaker 3: So from your perspect the overall approach, you don't take
Speaker 3: much issue with. No do we end up with where
Speaker 3: we are, where we have increasing deficits in increasing debts.
Speaker 1: Oh weud a minute, what I talked about with the proposals. No,
Speaker 1: I think we're in a terrible place because unfortunately, once
Speaker 1: you get to legislating, there isn't the will. There's a
Speaker 1: lot of talk, but the talk is always divided politically
Speaker 1: between the Republicans who refused to raise taxes and the
Speaker 1: Democrats who won't deal with entitlements. Now, I think there
Speaker 1: was a reality to this, and that is I do
Speaker 1: think when we eventually get to doing this, or if
Speaker 1: we're going to do it after the next election, which
Speaker 1: the Good Lord would hope we will, but I.
Speaker 7: Wouldn't bet on it.
Speaker 1: About sixty percent or something of the increase in the
Speaker 1: debt from two thousand to twenty twenty two was because
Speaker 1: of the tax cuts, So if it hadn't been for that,
Speaker 1: the debt, instead of being one hundred percent CDP would
Speaker 1: about sixty percent. Another way to look at it is
Speaker 1: exactly what I just said, which is what percent would
Speaker 1: the debt be of GDP we had the two tax
Speaker 1: cuts is about the same number, around sixty three percent
Speaker 1: or something like that. So I think in very large
Speaker 1: measure what happened is we had two very big tax cuts,
Speaker 1: neither what we paid for, so we decided not to
Speaker 1: pay for what we were spending, and that's how we
Speaker 1: got where we are. But looking forward, we're gonna have
Speaker 1: to deal with both spending and taxes, though I think
Speaker 1: for the reasons I just said, when you get realistic
Speaker 1: about it, I think you're going to have to be
Speaker 1: largely on the tax side.
Speaker 3: On the tax cuts, the theory of that was to
Speaker 3: increase productivity, increase growth. Can we grow our way out
Speaker 3: of the problem. No, no, But let's go back one step.
Speaker 1: When the Trump tax cuts were enacted, one of the
Speaker 1: major investment banks put out a piece saying that on
Speaker 1: a ten year basis, they thought that the tax cuts
Speaker 1: had zero effect on investment and productivity and growth. Now
Speaker 1: that's the tax cuts in terms of their impact. On
Speaker 1: the other hand, what it did do is contribute greatly
Speaker 1: to our fist, to our deficits when it comes to
Speaker 1: really garnering support.
Speaker 7: Can we grow our way out?
Speaker 1: Look, if we could put in place a serious inclusive
Speaker 1: growth strategy and increase our rate of growth, that would
Speaker 1: certainly help. Because of those debt over GDP, so that
Speaker 1: would help. But I still think we're going to have
Speaker 1: to deal with our expending. But even mostly with our taxes.
Speaker 3: If we could put together a plan. As you look
Speaker 3: at the two likely candidates right now, Donald Trump Joe Biden,
Speaker 3: is either one putting forward a comprehensive growth plan.
Speaker 1: No, but I think natured I think is no. But
Speaker 1: I do think if you look at what President Biden
Speaker 1: has done, as I said a few moments ago, I
Speaker 1: actually think he's sort of pretty much in the right track.
Speaker 1: I think if you look at the major programs these,
Speaker 1: I believe our externalities they were dealing with, that is
Speaker 1: to say, areas where the economy needed the indrection of
Speaker 1: government to deal with what the markets were not. But
Speaker 1: I would say that neither one is at the present
Speaker 1: time put forward they program. But if you extrapolate what
Speaker 1: President Biden has done looking forward conceptually at least be
Speaker 1: pretty comfortable with subjects A caveat that we need to
Speaker 1: focus on our on the issues that we have unable
Speaker 1: to politically. But that of course gets you back to
Speaker 1: the politics.
Speaker 7: Trump is a different matter.
Speaker 1: I mean, Trump is talking about huge tax cuts and
Speaker 1: that will just exacerbate our problem. I don't think it's
Speaker 1: gonna have any effect at all and growth, just like
Speaker 1: an other trap tax cuts did I think a lot
Speaker 1: of other problems by the way around the Trump president
Speaker 1: that we could have run into the rule of law
Speaker 1: is fundamental to our economy. He's talking about weaponizing the
Speaker 1: Dust Department and the FBI. He's look, the fundamental of
Speaker 1: any democracy is the peaceful transfer of power. He's denying
Speaker 1: their legitimate in the twenty twenty elections. Still so, I
Speaker 1: think there are a lot of problems economically if he
Speaker 1: gets elected.
Speaker 3: When we talked about nineteen eighty three, we talked about
Speaker 3: Japan and the perceived threat of Japan, challenge of Japan
Speaker 3: and the business community more broadly, Can China play that
Speaker 3: role today? Where is China? Is it something that we
Speaker 3: need to focus on. Is it something that might cause
Speaker 3: the American people say, you know, we better address this
Speaker 3: or else we're going to be in trouble with China.
Speaker 1: I think people do say that to some extent, So
Speaker 1: that may be, but not it's not in the same way, David.
Speaker 1: I mean, Japan was a palpable in a lot of
Speaker 1: people's minds, a palpable and ever present risk at the time.
Speaker 1: I don't think China plays quite that role. Also, China China,
Speaker 1: and I wouldn't profess expertise as back to China, but
Speaker 1: a little bit about it. I think they've got some
Speaker 1: really serious problems. I think they're much more. Is not
Speaker 1: just a question of the way they reacted to COVID
Speaker 1: or something. I think there's some really systemic problems. It
Speaker 1: was a terrific article Foreign Affairs by Adam Posen a
Speaker 1: few months ago. I guess about what I would call
Speaker 1: the systemic issues that they faced, and I think they're
Speaker 1: very serious.
Speaker 3: That was former Treasury Secretary Bob Rubin. And this has
Speaker 3: been a special Bloomberg Wall Street Week podcast.
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