Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2: I'm Stephanie Flanders, head of Government and Economics at Bloomberg,
Speaker 2: and welcome to a bonus episode of Trumpanomics, the podcast
Speaker 2: that looks at the economic world of Donald Trump, how
Speaker 2: he's already shaped the global economy and what on earth
Speaker 2: is going to happen next. And we thought we would
Speaker 2: just throw your way another panel I did at the
Speaker 2: twenty eighth annual Milken Institute Global Conference called US Economic
Speaker 2: Competitiveness in a Changing World, with guest Gary Cone, vice
Speaker 2: chairman of IBM but former senior player in the first
Speaker 2: Trump administration, Peter Orsag, CEO and chairman of Blazard, but
Speaker 2: also previously budget director for Barack Obama, and Kevin McCarthy,
Speaker 2: the former Speaker of the US House of represent Sentives.
Speaker 2: My opening question, given the title of the panel, was
Speaker 2: what kind of US economy did they think would emerge
Speaker 2: from the policies of Donald Trump? Would it be more
Speaker 2: or less competitive and resilient than the US economy that
Speaker 2: Donald Trump inherited at the start of the inn.
Speaker 1: So, look, we're going to come out of this just fine,
Speaker 1: go back and take a reflection on the US economy
Speaker 1: let me see. We've lived through depressions, We've lived through recessions,
Speaker 1: we've lived through COVID, we've lived through the financial crisis,
Speaker 1: and every time when we thought it was really bad,
Speaker 1: it got a lot better. If you go ten years forward,
Speaker 1: twenty years forward, if you have any duration of time,
Speaker 1: this is an unbelievably resilient economy. The United States where
Speaker 1: the reserve currency of the world. We're going to stay
Speaker 1: the reserve currency of the world. We have huge capital here.
Speaker 1: We've got a great corporate system that wants to invest
Speaker 1: in this country. Look, we all have short term concerns.
Speaker 1: Long term, we should be really excited where.
Speaker 3: We're going with this country, Miss Speaker Kevin mccaffee.
Speaker 4: Look, they all talk economics. I think you ought to
Speaker 4: get in the brains of the president. He's different this
Speaker 4: time than the last time. Trump is a populist, but
Speaker 4: there's two things that are principal to him. I always
Speaker 4: have been tariffs and drugs cost too much. When he
Speaker 4: says he's going to put a ten percent tariff on,
Speaker 4: he'll put a ten percent terrify when he says it's
Speaker 4: going to be twenty five or higher. That's all about negotiations.
Speaker 4: We are in the middle of negotiations. He's also not
Speaker 4: a rigid person that will not adapt. He's always negotiating.
Speaker 4: So if you take him exactly what he's saying, you're
Speaker 4: going crazy. But what's happening is at the end of
Speaker 4: the day, he's not going to have the shelves empty.
Speaker 3: He knows he's got about sixty days to do something.
Speaker 3: I actually think we're.
Speaker 4: Going to be a lot better off, And I would
Speaker 4: point to one part of the history for the same
Speaker 4: reason we open the three communicates with China when we're
Speaker 4: dealing in a cold war. This is going to be
Speaker 4: a reset in China. When we get an agreement with
Speaker 4: India and Japan and the UK, it's going to be
Speaker 4: much more positive for America.
Speaker 3: Is their adjustment.
Speaker 4: Is there disruption, yes, but in the long run it
Speaker 4: will make us stronger.
Speaker 2: Feed site.
Speaker 5: Let's see three four really quick points on resilience. I
Speaker 5: think we will be more micro resilient and less macro resilient,
Speaker 5: by which I mean certain supply chains in pharma, etc.
Speaker 5: Will be more secure, but from a macro perspective in
Speaker 5: terms of our ability to project power abroad and our
Speaker 5: ability to sustain the fiscal trajectory that we're on and
Speaker 5: so on, I think.
Speaker 3: We will be more vulnerable.
Speaker 5: Second, we will have marginally higher manufacturing activity and manufacturing employment,
Speaker 5: but nothing like the nineteen fifties shares of either.
Speaker 3: The economy or employment.
Speaker 5: Third, I think we need to be a bit careful
Speaker 5: about I saw Simon Johnson in the hallway. The Nobel
Speaker 5: Prize in Economics was awarded for the last year for
Speaker 5: what drives long term growth?
Speaker 3: And rule of law.
Speaker 5: Inclusive rather than extract of approaches to policy making are
Speaker 5: all core to long term economic growth. And so we
Speaker 5: just need to keep that in mind. And then final
Speaker 5: point is, despite all of the discussion about tariffs, as
Speaker 5: Nuriel Rabini put it, tech Trump's tariffs, if you look
Speaker 5: out over the next three to five years, so what
Speaker 5: is happening on the digital payment stack, what is happening
Speaker 5: on the AI race, What is happening in quantum that
Speaker 5: is going to turn out to be more important than
Speaker 5: the next two or three months.
Speaker 2: Gary Kahn, whether it's IBM or anywhere else, can you
Speaker 2: respond into this changing incentives and support the kind of
Speaker 2: investments that the government administration wants to see. When you
Speaker 2: have zero clarity about what the twists rates are going
Speaker 2: to be and what the future is going to be.
Speaker 1: Look, I think all of us who run big companies,
Speaker 1: who have run big companies, we have to think long term,
Speaker 1: like no one's thinking of like we're thinking about the
Speaker 1: next ninety days because we have to. But honestly, we're
Speaker 1: making investments for a generational cycle. You know, everyone's talking
Speaker 1: about AI today AI. A lot of the investment that
Speaker 1: you're seeing in AI today didn't happen the last two,
Speaker 1: three or four years. We'll get the quantum. I mean,
Speaker 1: the amount of money that IBM and others are putting
Speaker 1: in the quantum today is just extraordinary. Quantum will pay
Speaker 1: results five years I'll say, five years from now. So
Speaker 1: we are making extraordinary investments in this country, in this economy.
Speaker 1: The one place I'll caution, because I think we need
Speaker 1: to talk about this to some extent, tax policy drives
Speaker 1: investment decisions in this country. It's if you want to
Speaker 1: boil down to any one major factor that drives decision
Speaker 1: making in this country, it is tax policy. When we
Speaker 1: changed our taxes in twenty seventeen, we affected corporate policy
Speaker 1: more than anything else that's happened in this country in
Speaker 1: the last thirty or forty years, when we deemed repatriation
Speaker 1: of money back to the United States, we forced a
Speaker 1: lot of this money back. When we changed the corporate
Speaker 1: tax rate, we became competitive with the OECD. We changed
Speaker 1: the way people thought about manufacturing and building businesses in
Speaker 1: the United States. When we look at accelerated appreciation, when
Speaker 1: we look at R and D credits, all of these
Speaker 1: things matter and they will drive policy more than anything
Speaker 1: else we're actually talking about. Because at the end of
Speaker 1: the day, when you're running big companies, you're a fiduciary
Speaker 1: for shareholder. You're trying to maximize the turn over a
Speaker 1: long period of time, and taxes will drive a lot
Speaker 1: of those decisions. So, look, one of the most important
Speaker 1: things that has to happen this year is we have
Speaker 1: to at a minimum extend the Trump tax cuts the job.
Speaker 1: So that to me is a minimum. If we can
Speaker 1: put something additional, they're great. If we can bring back
Speaker 1: we have, bringing back the R and D credits, bringing
Speaker 1: back to acceler depreciation, those have more impacts than anything
Speaker 1: else we're actually talking about here.
Speaker 5: No, Gary won't be Look, I think there's a large
Speaker 5: empirical literature on this question, and taxes matter, but it's
Speaker 5: not even close to the most important factor. A lot
Speaker 5: of things go into the future cash flows and expectations
Speaker 5: of future cash flows, part of which is taxes, but
Speaker 5: there are lots of other pieces that are arguably more important.
Speaker 5: And on that point, I do think we need to
Speaker 5: also highlight that a lot of the benefits that we
Speaker 5: are we have experienced historically in the United States comes
Speaker 5: from being the world leader in technology in particular, that
Speaker 5: is where a disproportionate share of the productivity growth has occurred.
Speaker 5: That is where, to the extent there are any differences
Speaker 5: with Europe.
Speaker 3: That is where the differences have shown up most.
Speaker 5: Prominently, and we need to be cognizant of that because
Speaker 5: there is some risk that we will disrupt the apple cart.
Speaker 5: I completely understand and empathize with the perspective that our
Speaker 5: leading universities went far off Kilture and how they handled
Speaker 5: the aftermath of October seventh in particular, But I think
Speaker 5: slashing the NIH budget, slashing funding to the leading universities
Speaker 5: of the United States, risks exactly what we're already seeing,
Speaker 5: which is Europeans and others are saying, come here, we
Speaker 5: will invest in science.
Speaker 3: We don't want that, So.
Speaker 5: That is just as important, if not more important, than
Speaker 5: tax policy.
Speaker 3: But obviously everything matters.
Speaker 2: Since we've got onto AI and technology. What outcomes were
Speaker 2: you hoping for from the Chips Act and was it
Speaker 2: successful and revitalizing US microchip manufacturing at Sir Georgia's posito,
Speaker 2: and also wondering what the next act like that would be.
Speaker 2: I think, I mean you a speaker, when the Bipartisan
Speaker 2: Chips Act was passed, there's been sort of different signals
Speaker 2: around it. But as far as you're concern, was it
Speaker 2: successful in doing what it was supposed to do?
Speaker 3: Not completely?
Speaker 4: No, I mean the company government invested in the most
Speaker 4: I don't know is going to make it all the way.
Speaker 3: AI is going to do.
Speaker 4: One thing for America is going to get our energy
Speaker 4: policy right, because we'll never capture AI without getting energy
Speaker 4: policy right. You'll do more than any climate change has
Speaker 4: ever done to our energy policy. Getting chips made in
Speaker 4: America is going to be an agreement with government and Taiwan.
Speaker 4: Taiwan is never going to give the full fobs here
Speaker 4: unless they get an agreement that they're going to get
Speaker 4: some type of support and that's actually happening now.
Speaker 3: So I believe there is enough capital out there.
Speaker 4: It's more a government view that in the Senate if
Speaker 4: they just throw money at Chips. I think there's a
Speaker 4: lot of capital in the market to get money for Chips.
Speaker 3: I don't think government needed to make that investment.
Speaker 4: This isn't normal. I tell my friends in Congress, China
Speaker 4: has a congress too. No one knows who they are.
Speaker 4: All the power has usurped to the White House. Trump
Speaker 4: has one term. You can tell them, oh, if you
Speaker 4: went really smooth. None of that's going to matter to him.
Speaker 4: He's got one term to get something done. He has
Speaker 4: his ten thousand hours that he knows how to do
Speaker 4: the job. He picked the cabinet that he wants that
Speaker 4: will follow what he wants to do. I believe investment
Speaker 4: is important, but under Republicans we increased in IH. But
Speaker 4: I don't think any of these colleges have been audited.
Speaker 4: Did you really think taxpayer money should give Harvard nine
Speaker 4: billion dollars? What are they doing with it? I actually
Speaker 4: believe coming after him will make every single college to
Speaker 4: start auditing.
Speaker 3: What are we doing with this money?
Speaker 4: And it will drive more towards research and development than prior.
Speaker 4: I firmly believe in the tax and it will get done,
Speaker 4: but it won't get done perfectly on the timeline that
Speaker 4: Congress does right now, but it's too much pain that
Speaker 4: they not do it. But Trump will cut regulation he
Speaker 4: did last time, even faster than Reagan. That combination will
Speaker 4: help energy more and AI will drive energy to do
Speaker 4: it more than anything of it.
Speaker 3: Yeah.
Speaker 5: Look, I think there is a very positive agenda here
Speaker 5: that has to do with expanding the supply, not only
Speaker 5: of energy, where honestly, the myth of the immaculate transition
Speaker 5: has dominated for too long, and I'm glad, I am
Speaker 5: glad we are past that in housing, which admittedly is
Speaker 5: mostly local, but is a huge impediment to the upward
Speaker 5: mobility of many families. By the way, people have not realized,
Speaker 5: but the mobility rates in the United States have been
Speaker 5: declining over the past two to three decades.
Speaker 3: And you know part of that is is.
Speaker 5: The rock and effects and the difficulty of finding housing
Speaker 5: and wherever you want to move to.
Speaker 3: This is a problem that needs to be addressed.
Speaker 5: And you can go down the list of expanding supply
Speaker 5: as a I mean EZRA client and Derek Thompson just
Speaker 5: wrote a book called Abundance, which is fundamentally about let's
Speaker 5: stop subsidizing demand and let's really focus on expanding supply.
Speaker 5: That is an agenda that you know, I'm one hundred
Speaker 5: percent behind.
Speaker 2: I just wanted to want to shift a little bit
Speaker 2: of that follows on from that, if you have a
Speaker 2: supply side approach to the economy. One of the things
Speaker 2: that investors and others were very were excited about in
Speaker 2: looking at this incoming administration was around deregulation and that
Speaker 2: whole agenda. But we also saw in the previous administration
Speaker 2: quite an aggressive approach to corporate power, which actually was
Speaker 2: also associated with an analysis of what was reducing labor moability,
Speaker 2: non compete clauses. You know, the corporate concentration was itself
Speaker 2: imped being economic competitiveness. So I just wonder how would
Speaker 2: you judge where the administration is on that and whether
Speaker 2: it's right to kind of be more relaxed about corporate
Speaker 2: concentration if that's if that's the case.
Speaker 4: The frustration I've had in past administrations, if one administration
Speaker 4: did something, the other one has to be opposed to it,
Speaker 4: which I didn't think good.
Speaker 3: Was when it comes to China.
Speaker 4: Maybe China has united everybody, and this isn't about preparing
Speaker 4: for war. We've become too dependent. This is about making
Speaker 4: sure we don't go to war and pure dependency. And
Speaker 4: it's the most bipartisan committee. And when the President of
Speaker 4: Taiwan came to see me, I held the meeting at
Speaker 4: the Reagan Library simply for the symbolism of defeating communists
Speaker 4: without going to war. And when we sat and had
Speaker 4: a press conference together with the Berlin Wall behind us,
Speaker 4: Andrew Mitchell gave the first question and she said, I cried,
Speaker 4: and I was with Reagan. We said, tear down this wall.
Speaker 4: And I feel just emotional as today that you are
Speaker 4: so united without Paul.
Speaker 3: And I think it's been one of the most positive things.
Speaker 3: And dependency.
Speaker 4: Just like they control ninety percent of the critical minerals,
Speaker 4: but ninety five percent of the processing, and that really
Speaker 4: comes down to Congress. Are they going to allow us
Speaker 4: if we have our own resources to be able to
Speaker 4: do that? And I think this is a place, this
Speaker 4: is where the TikTok band came from. This is going
Speaker 4: to be a very positive situation.
Speaker 2: Well happn't to that, but I did actually distract you
Speaker 2: from Kary Kayan? Do you want or do you want
Speaker 2: to take on the Batsy trust question.
Speaker 1: Look, I'm always troubled by this topic to some of
Speaker 1: the great because, look, we clearly want our companies to
Speaker 1: play within the rules. We don't want anyone to have
Speaker 1: an unfair advantage. So that's that's a given. On the
Speaker 1: flip side, you know, we sit here and we talk
Speaker 1: about we have to compete against China, which we do,
Speaker 1: and we have to win the battle. China's trying to
Speaker 1: build the largest companies in the.
Speaker 3: World to take over the world.
Speaker 1: We're trying to break up the larger companies they're successful
Speaker 1: in the United States. I think we got to decide
Speaker 1: which side this equation we want to come out on.
Speaker 1: I think we want to be able to compete globally.
Speaker 1: And if some of our companies are really successful, it
Speaker 1: happen to be very large, it's okay. It's probably good
Speaker 1: for us in this country, and they probably bring home
Speaker 1: a lot of tax revu and they probably employ a
Speaker 1: lot of people. As long as they're not prohibiting other
Speaker 1: people from competing in the space. I don't think we
Speaker 1: as Americans to that problems with it. We should actually
Speaker 1: be very prideful in the fact that we can build
Speaker 1: these companies from nothing. And the companies we're talking about,
Speaker 1: and I know we're smiling, a lot of these companies
Speaker 1: didn't exist thirty years ago, forty years fifty years ago,
Speaker 1: none existed. So you think about the creativity and this
Speaker 1: is why I started out being so bullish on this economy.
Speaker 1: You think of the creativity and the entrepreneurial spirit that
Speaker 1: exists in this country. We've built some of the largest
Speaker 1: companies in the last twenty years. Let's allow them to
Speaker 1: continue to thrive as long as they're playing within the laws.
Speaker 1: That's why we have loss in this country.
Speaker 5: So the biggest divergence that the biggest bad crowd had
Speaker 5: was because it's easy to kind of just say it's
Speaker 5: across the board, it's really quite specifically with regard to
Speaker 5: vertical integration. So that is a firm that is buying
Speaker 5: something that's a supplier or a distributor as opposed to
Speaker 5: merging horizontally. And there I think, honestly, there was a
Speaker 5: lot of rhetoric, often without a lot of evidence, and
Speaker 5: you're going to find that's where the differences will be.
Speaker 5: The most significant is a little bit of backing off
Speaker 5: from the all vertical integration is bad.
Speaker 3: And let me just.
Speaker 5: Highlight one area where this tension is paramount.
Speaker 3: I saw doctor Oz yesterday. He's here.
Speaker 5: I believe that CMS under doctor Oz will push very
Speaker 5: hard on value based care and healthcare, which is fantastic.
Speaker 3: We should pay for value and not for quantity.
Speaker 5: But as you do that, you're creating incentives for insurance
Speaker 5: companies and providers to act as one because that's effectively
Speaker 5: what most of the incentive undervalue based care does.
Speaker 3: And we have evidence.
Speaker 5: We're here in California, Kiser Pernaminity is a good example
Speaker 5: of fully vertically integrated healthcare players that perform better than others.
Speaker 5: So if you go after vertical integration, but you also
Speaker 5: want value based healthcare, which, by the way, the administration,
Speaker 5: the prior administration was saying simultaneously you have massive cognitive dissonance.
Speaker 5: One arm of the government saying don't do this, in
Speaker 5: the other arm saying do it. I think that will
Speaker 5: be better going forward.
Speaker 2: I'm going to change the subject, but I did mention
Speaker 2: the start. I mean, one of the things that economists
Speaker 2: had been quote unquote concerned about given how much it
Speaker 2: had been part of the growth model in the last
Speaker 2: few years. Was the much tougher stance towards immigration of
Speaker 2: this administration. Now, obviously the focus has been illegal administration
Speaker 2: immigration and companies don't tend to kind of stand up
Speaker 2: for the right to have loads of illegal immigrants working
Speaker 2: for them, and really want to get past that and
Speaker 2: just to a sort of core of what has been
Speaker 2: a source of economic strength for the US over the
Speaker 2: last few years, which is to be a very opening.
Speaker 1: Environment for legal immigrations.
Speaker 2: So foreign citizens, no, But if we have people who
Speaker 2: are now being we have foreign if foreign students who
Speaker 2: are studying here, maybe contributing potentially to entrepreneurship and inventions
Speaker 2: in the US and down the road, are being intimidated.
Speaker 2: If people are worried about I mean, we will know
Speaker 2: people here who have been told actually, if you don't
Speaker 2: need to come to the US, don't come, or do
Speaker 2: just take a burner phone. I mean, all of this
Speaker 2: is I'm sure exaggerated, but just about the sort of
Speaker 2: atmosphere that it creates for a country that's trying to
Speaker 2: attract foreign talent. I mean, Peter, do do you worry
Speaker 2: about it? It's not about these specific cases.
Speaker 5: There is I agree that we need to have secure borders,
Speaker 5: and I agree that you know no one can or
Speaker 5: should be in favor of a legal immigration. So let
Speaker 5: me just say that, However, even if the burner phone
Speaker 5: finalmon is anecdotal, anecdotes can become the telephone game and
Speaker 5: affect our ability to attract top talent. The number of
Speaker 5: foreign CEOs with whom I've spoken who say that they
Speaker 5: are going to be bringing a burner fund to the
Speaker 5: US is much higher than it should be.
Speaker 3: So I very much hope.
Speaker 5: That whatever's causing that changes because that is not good
Speaker 5: for our economy.
Speaker 2: Misspeaking, do you think do you just worry about the again,
Speaker 2: the tone of what's happened over the last few months,
Speaker 2: and maybe the overreach by some people in individual bits
Speaker 2: of homeland security, which then contributes to these stories.
Speaker 4: Look, I think the greatest strength of America is not
Speaker 4: our aircraft carri is the idea of America. Okay, But
Speaker 4: President Trump got elected on two main factors, the border
Speaker 4: and the economy, and I think eighty percent of America
Speaker 4: believes the border was out of control. So just like
Speaker 4: everything else, you have to actually make this statement to
Speaker 4: stop the illegal from coming. We're the most generous nation
Speaker 4: in the world. More than a million people go. Now
Speaker 4: you're going to get a gold cart, so you're going
Speaker 4: to get a whole other set. I think this is
Speaker 4: a small part. I think it'll make people rethink. I'm
Speaker 4: more concerned the relationship with Canada and Mexico because I
Speaker 4: believe that's a great deal of strength, and I think
Speaker 4: that has to be we have an agreement with them.
Speaker 3: We need to work through it.
Speaker 4: Because if you can't work with your neighbors that you
Speaker 4: have in agreement with, it's hard to make agreements with
Speaker 4: other people.
Speaker 2: Okay, and I want to go back to we started
Speaker 2: right at the beginning. You mentioned about debt, and you
Speaker 2: also about the importance of making the tax cuts permanent.
Speaker 2: You know, that is one of the things that if
Speaker 2: you're again just doing a sort of classic economic health
Speaker 2: check of the US, you'd say, that's the kind of
Speaker 2: scariest bit of the scariest chart is what happens to
Speaker 2: debt under any reasonable assumptions. So do you see a
Speaker 2: path given the relatively modest gains of DOGE, given the
Speaker 2: kind of cuts that are on the table in Congress,
Speaker 2: do you see a path to meaningfully flattening the US trajectory.
Speaker 1: There's always a path. Do we want to take the path?
Speaker 1: We're going to have no choice. I think we're going
Speaker 1: to have to get to the point where we take
Speaker 1: the path. So if you look at what DOE is
Speaker 1: trying to do in like waste frauden abuse, as the
Speaker 1: Governor said, as the Speaker said, there's waste broaden abuse everywhere,
Speaker 1: it's hard to go in and find those pieces. I
Speaker 1: actually think we'd be better off to take a step
Speaker 1: back and figure out what can we actually eliminate. It's
Speaker 1: a lot more cost effective to start eliminating things. So
Speaker 1: I'll go back to my former former former life. You know,
Speaker 1: when you look at the banking sector in the United States,
Speaker 1: I think we have eight to eleven regulators in the
Speaker 1: banking sector in the United States. If you look at
Speaker 1: the UK, you look at Hong Kong, you look at Japan,
Speaker 1: you look at Singapore, you'd say, all they have pretty
Speaker 1: good markets, pretty good banking systems. They have a maximum
Speaker 1: of three regulators in each of those countries. They don't
Speaker 1: have an SEC, they don't have a CFTC, they don't
Speaker 1: have an OCC. I could keep naming names of things
Speaker 1: they don't have. They have a potential regulator and a
Speaker 1: market in a central bank, and they have a regulator
Speaker 1: that protects the public. We could do that really efficiently
Speaker 1: in this country, and we could cut out real, real
Speaker 1: spending long term. Now, look, it will take my friend
Speaker 1: over here and his colleagues in the Capitol to get
Speaker 1: rid of a bunch.
Speaker 3: Of these agencies.
Speaker 1: But these agencies in many respects I think have probably
Speaker 1: outlived their needs, outlived their services. So if we're gonna
Speaker 1: get serious about taking money out and keeping it out,
Speaker 1: because the dose money, I hate to say it, in
Speaker 1: the next administration could come back in the way to
Speaker 1: keep it out. Take it out is the remove part
Speaker 1: of the organization that actually doesn't need to be there today.
Speaker 2: I guess you only find out if you needed it
Speaker 2: once you get rid of it.
Speaker 5: But Pisa, Look if I told all of you that
Speaker 5: there was a country running seven percent of GDP deficits,
Speaker 5: as far as I can see, that the debt to
Speaker 5: GDP of that country was one hundred percent, that the
Speaker 5: political system was deeply polarized, that the country was arguably
Speaker 5: alienating a third of its investor class, and that that
Speaker 5: country was also toying with the idea of whether the
Speaker 5: central bank should remain fully independent or not. That would
Speaker 5: not be a combination of factors that would be confidence inspiring.
Speaker 3: So I agree with Gary this is in my opinion.
Speaker 5: Now there was a decade and now I will say
Speaker 5: even I, as a former CBO director and a former
Speaker 5: budget director, sort of had just tuned out all the
Speaker 5: chicken little kind of the sky is falling fiscal stuff
Speaker 5: because all of the dire predictions were not happening, and
Speaker 5: it kind of got a little tiresome to keep hearing them.
Speaker 3: But if you.
Speaker 5: Compare where we are now to where we were a
Speaker 5: decade ago, it's a lot different. The deficits twice as
Speaker 5: high interest rates are dramatically higher. I am particularly pleased
Speaker 5: that Secretary of Bison has cleaned up the question of
Speaker 5: whether the administration is doubting whether it being the reserve
Speaker 5: currency is a benefit or not. I think there were
Speaker 5: statements from other administration officials which were not helpful. That
Speaker 5: is a very dangerous thing to be doing, given the
Speaker 5: combination of facts that I had. So this is I
Speaker 5: think it's time to worry again about this trajectory and
Speaker 5: I do hope that we get serious about what we're
Speaker 5: going to do, because you don't want to be in
Speaker 5: a situation where it gets away from you. And I
Speaker 5: think the risk that it gets away from us are
Speaker 5: higher now than it was over the past decade.
Speaker 2: Mister speakers, as Gary said, it's all down to your colleagues, Well.
Speaker 4: Then I'd be really worried. Structure dictates behavior. There is
Speaker 4: not one person who gets elected that they're going to
Speaker 4: go in and cut It doesn't show up on any poll. Now.
Speaker 4: We had this exact same problem in nineteen ninety with
Speaker 4: the collapse of the Soviet Union, and there's not one
Speaker 4: member of Congress who's going to raise their hand that
Speaker 4: we've spent the last forty years developing a military to
Speaker 4: fight the Soviet Union. Who's going to raise their hand
Speaker 4: and said close my base. So they know the structure
Speaker 4: wouldn't work. So what did they do. They created bract
Speaker 4: base re Alignment Enclosure, so every leader got to appoint
Speaker 4: to it. If they came up with the plan, this
Speaker 4: is all they were promised. They'd get a vote on
Speaker 4: the floor in the House and no amendments.
Speaker 3: You know what happened.
Speaker 4: It would pass and it would be bipartisan, because then
Speaker 4: you're boxed in. I actually made this offer to Biden
Speaker 4: during the debt ceiling. I said, let's do it and
Speaker 4: let's vote after the election. You got the tax bill,
Speaker 4: and you've got some provision in some Obamacare coming due.
Speaker 4: So technically, in the tax bill, if you took some revenue,
Speaker 4: you're not raising taxes because they're all going up automatically.
Speaker 4: You're actually decreasing them. In Obamacare, some of them are
Speaker 4: going to go. Provisions were leaving, So if you reform
Speaker 4: that from a Democrat, you weren't destroying Obamacare. And if
Speaker 4: you did it after the election, you got a little
Speaker 4: aim duck. The greatest strength any politician has is the
Speaker 4: first day they're elected, and it goes down each day
Speaker 4: to the next election, then it goes back up. So
Speaker 4: and if you did it together, no one will lose
Speaker 4: their job over it. Now you can eliminate things in
Speaker 4: government that's not going to do anything for you. The
Speaker 4: drivers today are the government programs, and if you do
Speaker 4: nothing eight years and nine years, they'll automatically be double
Speaker 4: digit cuts to them and few options. It's the greatest
Speaker 4: threat we have.
Speaker 2: Okay, but help me out here because when you look
Speaker 2: at the only serious cut in a non discretionary that's
Speaker 2: on the table that is actually gaining some momentum in
Speaker 2: Congress never been not medicaid. But the President has said
Speaker 2: multiple times he doesn't want to see cuts the many
Speaker 2: without that number. Without that cut, it's very hard to see, say,
Speaker 2: how you start to pay for the tax cuts. So
Speaker 2: I'm just wondering, how do you've given your history, your experience,
Speaker 2: how do you think that's going to be resolved?
Speaker 4: Okay, my experience in the dead saying I got two
Speaker 4: trillion dollars and I lost my job over it. Even
Speaker 4: in this reconciliation, they're not coming anywhere near that. And
Speaker 4: it's a Republican White House or Republican Senate, Republican House.
Speaker 4: So that's why I say I don't put my trust
Speaker 4: in them. Getting it's kinna becomes such a big problem
Speaker 4: that no longer anybody can ignore it. But you have
Speaker 4: to change the structure otherwise the members will just the
Speaker 4: minority will fight who's ever in the majority. Take it
Speaker 4: out of the argument, and bring it back in one vote,
Speaker 4: and that's the way you have to get it done.
Speaker 2: Thank you very much, thank you, Thanks for listening to
Speaker 2: Trumpnomics from Bloomberg. It was hosted by Me, Stephanie Flanders
Speaker 2: and I was joined by Gary Cohne, Peter Orsac, and
Speaker 2: Kevin McCarthy. Trumponomics is produced by Samasadi and Moses and
Speaker 2: Them with help from Chris Martlou and Amy Keen. Sound
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