Moody's Talks - Inside Economics - China and Cris Votes No

Episode Date: July 16, 2021

Dan White, Director of Public Sector Research at Moody's Analytics, joins Mark, Ryan, and Cris to debate the economic impact of the bipartisan infrastructure deal and other proposed government spending.  A full transcript of the episode can be found here.  Questions or Comments, please email us at [e-mail]. We would love to hear from you.  To stay informed and follow the insights of Moody's Analytics economists, visit Economic View. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Inside Economics. I'm Mark Sandy, the chief economist of Moody's Analytics. Glad to have you joining us today. I'm, as is always the case, joined by my two colleagues, Chris DeReedys. Chris is the deputy chief economist and Ryan Sweet. Ryan is the director of real-time economics. And we also have a guest today, Dan White. Dan is another one of our colleagues. Dan is the Director of Public Sector Research. Dan, how long have you been with us at Moody's Analytics? Going on 12 years now. 12 years.

So, and you came to us, as I recall, from the state of New Mexico. Is that right? You were at the state of New Mexico before you came to Moody's? I was. Yeah, I worked for the legislature in New Mexico for the legislative finance, committee doing revenue forecasting and economic analysis around finance and public debt and all that fun stuff. Yeah. And how did you find us? How did you find Moody's? What was that link? You know, I grew up in a lot of places when I was a kid. And when my wife and I had our oldest son,

we looked at a bunch of places to live. And one of the places I grew up in was Pennsylvania around the Pittsburgh area. And so I applied to a bunch of jobs in Pennsylvania and not knowing where a lot of them were, hoping they were close to Pittsburgh. And boy, was I wrong with Westchester? It couldn't have been further away from Pittsburgh. But it was an awesome fit for us. And my wife and I are super happy in the area and it's been a great move for us being with you guys in Westchester.

Yeah. And I think you were a football player, right? You played football, didn't you? I did. I played football. I played football in New Mexico State and got my butt kicked by some of the best football players in the country. Is that? Would we know any of those players?

Are they in the pros now? Oh, yeah. We played against everybody. My first game I ever played in in college, actually, was against Vince Young. And Darren Sproles, I played with him and, you know, a bunch of guys. Really? Daryl Sprouls. Wow.

he's a pretty tough guy to tackle. What position did you play? So I was an outside linebacker and a long snapper for punts and extra points. And I remember I touched Darren Sproles twice as he ran by me on punt returns. He returned two punts against us. He was tough to bring down. Yeah, he's a tough player. He's a tough player.

Well, while we're on sports, you must be pretty happy, Chris, right? I'm thrilled. Yeah. Tell the listeners, why? Why? Two reasons. Italy won the Euro Cup, and Argentina run the Copa America. Oh, I didn't know about Argentina.

Why do you care so much about Argentina? Well, we all know you're Italian, so that's why you care about the Italian team. I'm Italian. I was actually born in Argentina. You know what? I thought I knew everything about you. I did not know that. That's a little factory.

But I live there very briefly. So. Bronsare's or somewhere else? Yes. Yeah, we've got a lot of links, Argentina, at Moody's. Yeah. Hey, Ryan, while we're on sports, just to flesh things out, did you play baseball in college? I did.

You did? And who did you play for? Washington College. It's a small school in Chester Town, Maryland. Wow. And what position did you play? Third base. Third base.

Well, guys, I'll have to say, I'm a little bit of a nerdy geek. I didn't, I mean, I ran track a little bit up until middle school. I played a little football, maybe, actually, I was pretty good up until, you know. American football or soccer? No, American football, American football. I can't picture you. No, no, no, no. Hey, when I, I was a strapping young guy at one point.

Yeah. But I was up to sixth grade. But I, Mike, I was a, I played in band. I don't know. It sounds like so geeky now relative to you guys. I played in a jazz band when I was in high school. Toured around. Actually, we went to Spain.

We were on the, I don't know if this is true, but they told me that we played on the Johnny Carson of Spain, touring around. We played in jazz competition. So, but you know, you guys just feel a little out of place with all their prowess. You get hit and head a lot less playing in the jazz band, so that's probably better for being an economist. That's a good point. That's a good point. Well, it's good to have you, Dan. Thanks for joining. And just for the listener, Dan and I, we've done a lot of work over the years. We've had a boatload of fund over our presidential election modeling and also evaluating the policy proposals put forth by various presidential candidates over the year.

years, you know, the various presidential elections, we've done a lot of work and a lot of debates because Dan is, you know, as you can tell, I might be a little around the left of center. Dan's a little, I'd say, can correct me if I'm wrong, Dan, I don't want to mislabel you, or maybe I shouldn't label you at all, but I think of you kind of sort of a little bit right of center. Would that be fair? I think that's fair. Yeah. And I, and I, and I, DeReedy's in sweet. I don't know where hell they are on the spectrum. They're on the they like to keep you very close to their vest. Yeah, they do. They do indeed. Well, it's good to have you. So as everyone knows, who's been listening

to the podcast, we begin with the statistics and then we'll turn to the big topic after that. And of course, apropos to having Dan on, we're going to be talking about fiscal policies, a lot going on in Washington, a very fiscal policy packages proposals kind of winding their way through and we'll talk about that. But before we get there, let's talk about the statistics. And Ryan, you go first this week. What's your statistic? All right. A ton of stuff came out, but I'm going with 1.3%. One point three percent. You got to think outside the box. It's an important one, so you can't give me any crap about it. Oh, Chris seems like he knows.

I know what, well, there might be more than 1.1.3% but go ahead far away. I think retail sales X auto? Nope. No? Are you sure about that? No, it could be. That's not the number I'm thinking of. No, no, I can't, well, I don't know.

Retail sales were up 0.6. What was retail sales X auto? I think it was closer to 1.1 maybe. Oh, was it that strong? I didn't know. Yeah, it was strong. Okay. So, okay, so Chris, maybe you should check it out.

I'm checking it out now. Check it out. You can fact check. That's fine. You said this is a little out of the box? Yeah, from our normal discussions. All right, so I'm broadening out. Okay.

So it's a non-U.S. number. Oh, you said, that's quarter to, I know, Chinese GDP growth. There you go. That's quarter to quarter. Dan, are not impressed? Wait a second. Dan, are you impressed I got that? Somebody's got to be impressed.

I got that. I'm impressed you got the quarter to quarter number because I didn't look at the quarter to quarter number. I don't know. It was the Daniel number. No, you can't look at anything year over year right now because it's all screwed up. Only you and Ryan look at that quarter to quarter number. Well, probably half true. There's got to be somebody out there that knew that number other than Ryan and I.

1.3%. But that that was. So tell us about that. Why did you pick that number, Ryan? So I've been paying very close attention to what's going on in China because it's likely what the U.S. is about to go through. I mean, they got out of the gate after the pandemic very, very quickly, a lot of support from fiscal stimulus and reopening of the economy. Then things slowed down a little bit. And you can see that in the Citigroup Economic Surprise Index for China. It's been below zero. If it's zero, it means the incoming monthly,

quarterly data is in line with expectations. It's been below zero for several months now. And that may have contributed to the Chinese central bank cutting the reserve requirement recently. But the good thing is the economy is picking back up. So I think we might have a similar case in the U.S. We go through a little bit of a lull as the fiscal impulse response fades a little bit. And then we find our feet again and start running. Yeah, you know, I think there's a reasonable probability. that the U.S. economy is measured by real GDP growth, year over a year of real GDP growth, will be stronger than Chinese real GDP growth over the next couple, four quarters. Because as you point out, the Chinese economy has slowed.

It benefited from the surge of its reopening earlier, and now is on the backside of that, and we still have a lot of growth related to the reopening. And I think in our forecast, we have U.S. real GDP growth. stronger on a year-over-year basis, stronger than China through starting this quarter, Q2, and extending through, I think, Q2, 2022. Guess when the last time that happened? Guess when that last time? Yeah.

You want to take a crack at that? When's the last time U.S. growth on a year-over-year basis was stronger than Chinese GDP growth? It's got to be a while ago, right? I mean, China entered into the WTO, I believe, in 2001, right? So after that, it's been blistering growth in China. 1990, it to go back to 1990. Yeah, we just see that. I think we, that's that, I think China, in the U.S.-China relationship should be a podcast, don't you think?

We should get, sure. Yeah, I agree. We should dig deeper into that, yeah. Anything else on that, Ryan? You wanted to mention about China, Chinese growth? No? No, I think we covered it.

Okay. Okay, very good. Chris, what's your statistic? I'll give you an easy one because Ryan's was tough. 80.8. But before I go there, 1.3% was retail sales ex-auto. Okay.

No way. Really? Not X-O and gas, X auto. Just X-A-A-O. Just X-O-Y. I think you've been boning up for this podcast. You bet.

You bet. I think we all are. Hey, not me. I just knew that 1.3%. All right, 80.8. All right, Mark. I'll let you go first. 80?

You know this off the, you know this right away? Well, what is it? What is it? 80.8. University of Michigan consumer confidence. Yep. Oh, I didn't know that. It came in a lot weaker than what people were expecting.

I wonder if like the inflation, what do you think, Chris? Do you think it's the inflation jitters? I think gas prices, inflation jitters, yeah. And inflation expectations were up in the survey. So I think that's part of it. And I also think it's this latest round of COVID. Oh, you do. I think that might, you know, certainly not compensative.

Well, you know, there's this growing gap between the conference board survey of consumer confidence and the UMISC sentiment index. I guess that's because the conference board survey is more labor market oriented. Is that correct? Right. Yeah. Yep. Where Michigan is much more personal finance tied. So to Chris's point, higher gas prices, things like that are going to affect Michigan more than conference board.

I would have thought that higher stock prices and housing values, though, would have lifted UMIS. But I guess it's more about gas prices. Yeah. Okay. Oh, the buying expectations were down as well, though. Were they? In terms of home, people feeling like it's a good time to buy a home or a car or clients. Hey, Chris, you're coming in a little bit light, your sound. So I don't know. Okay. Let me see what I can do. Yeah. That's better. That's better. Okay. Okay. Hey, Dan, I, you know, I don't mean to put you on the spot. but do you have a statistic you want to to call out? I'm an economist, Mark.

I've always got a statistic in my back pocket just in case. Oh, is that right? How about 202%. 202%. Would this happen? It dovetails very nicely with our discussion today. Okay, 202%. Is that something like?

This guy has something to do with deficits or debt, probably, right? That's my guess. Yes. Is that the, it's kind of a weird thing to look at, but is it the increase in the size of the annual budget deficit? It's not an increase, so it's a share of something. Oh, 202%. Well, overall debt, better. federal debt is more like 100%, a little over 100% of GDP, right?

That's 100% of GDP. So that can't be it. Well, you're on the right track. It's a projection that recently came out from CBO. Oh, so is it, so is that where we're headed? That's where the debt to GDP ratio is headed? That's the current law baseline estimate. It's the one I always look at for 30 years from now.

I have four boys, as you guys know, and one of them is exactly 30 years younger than I am. And so I always figure out, well, when he's my age, what will that the GDP ratio be? And under the baseline, so the best case scenario, so assuming there's no more recessions for the next 30 years, CBO estimates it'll be 202%. Oh, man, I didn't know that. That's current law. So that means that if there's no changes in policy whatsoever, based on their economic assumptions, 30 years from now, the nation's federal debt to GDP ratio will be over 200% right now.

And so it's going to double over the next 30 years. Yep, it'll double over the next 30 years. And that's huge because just two years ago, so pre-pandemic, the same report, it's that annual long-term outlook that CBO puts out. they estimated that 30 years from now, we'd be at about 145, 150% of GDP. So we've basically, we've fast-forwarded a generation in terms of the debt-to-GDP ratio. Wow, that's a pretty sobering statistic. You know, we create this statistic called fiscal space.

Fiscal space is the difference between the nation's debt-to-GDP ratio, actual debt-to-GDP ratio, And that debt-to-GDP ratio above which you get into a self-reinforcing negative cycle where investors begin to lose faith that they're going to get repaid in a time of the way because of the high debt load. Interest rates start to rise. That increases the interest expense of the government adds to the deficit in debt. You get into this kind of vicious death spiral. And according to our analysis, we've got about a 200, 250 percentage point. of GDP left before we run out of space. So it feels like under the CBO scenario, we're getting pretty close to that death spiral.

That is pretty sobering. Yeah. Wow. Yeah. And if you look at some of their more realistic cyclical forecast, it gets up above 230, 240%. Yeah. Yeah. Well, that is good.

We'll come back to that in just a minute. I've got a statistic, but it's not fair, really. So, but I'm going to try anyway. As usual. I do. No, I actually am pretty good. I come up with statistics that, you know, they're doable. But this one I don't think is doable, but it does highlight a point.

And I won't make you suffer very long, but I'll go ahead and say it. 33 out of 36. 33 out of 36. And I'll give you one, two, three. I'll give you a hint. It has to do with the stock market. It has to do with earnings. It has to do. How many companies have beat earnings projections already? Excellent. Excellent. Excellent. Very good. Yeah. Of the 36 companies in the S&P 500 who have reported, 33 have beat analyst expectations. So, you know, that highlights how strong businesses are doing. corporate earnings are very, very good.

You know, it hasn't helped the stock market out so much. Stock market's been going sideways here. But, of course, the stock markets come a long way in a very short period of time. Valuations are extraordinarily high, so not too surprising. But, yeah, businesses are rip-warn here. Despite the pandemic, despite the tight labor market, despite the stronger wage growth, despite the disruptions of the global supply chain and higher prices for materials and everything

else, they're doing well. They're doing really well. So businesses are, you know, raking it in. So is this as good as it gets? Or do you see more? I think so. I think it's going to be pretty tough, you know, going forward. I mean, they benefited obviously from the surge in demand coming out of the pandemic. They benefited from some cost cutting and restructuring that they did during the pandemic. I mean, we've seen productivity gains improve quite a bit during the pandemic, and that goes right to the bottom line. And of course, a lot of it's been driven by, you know, the companies that are reporting first, a lot of them are financial, you know, like JP Morgan Chase or Goldman Sachs, and they're benefiting from the wide yield curve. So, you know, short-term interest rates are pinned to

zero. Even though long-term rates are very low, they're very high relative to zero. So, you know, you can make a lot of money just borrowing short at a low interest rate and lending at a longer rate and booking that spread. And I think a lot of that is going. And of course, markets are strong. And that goes to trading volumes and commissions and that kind of thing. And M&A activity has been merger acquisition activity has been very good. So the financials have done very well. But broadly, I think companies, but I think it is the high water mark, you know, in terms of corporate growing growth. That's what we have in our forecast. Yeah. Is that what we have in the forecast? Yeah, we have, I mean, I look at margins.

So profit margins, corporate profit margins are expected to decline in the second half of this year in our forecast. Yeah, well, yeah, makes sense. Which makes sense, yeah. It makes a lot of sense. Okay. We have been following a few statistics on an ongoing basis. And first up, Chris's U.I claims, unemployment insurance claims, what did they do last week? They had a good week, $360,000.

So down $26,000 from the week before. So good movement. Four week average is 383,000. So below 400,000, that's good. We're moving in the right direction. So all in all, quite positive. Yeah. But we're still well above what we would consider normal at 250,000.

Or prior to the pandemic, we were as low as 210,000, I believe. Anything in the UI data that goes to the department? debate over the impact of unemployment insurance, the supplemental UI on labor markets? Did you notice anything in the data? I didn't. I thought it was still too early to detect. But Ryan, I know you parse out the data as well. Adam, Adam Kamens, one of our colleagues, he wrote a very, it was a great piece on economic view, looking at that debate, you know, that debate, you know, is there any evidence in

UI data that, you know, ending the supplemental UI benefits early is, you know, causing claims to fall. He does see, he identified some, you know, disparity that those states that did end it, you're seeing claims fall more quickly than others. But then he points to the home-based data, Google mobility, and there's not a lot of evidence there that it's having a big impact. So I think the jury's still out. I think we need a few more weeks or a couple months.

I see. We, I know, because that's tough, right? Yeah, exactly. I know we got data today for June labor market data, employment data at a state level. And I was looking at that. Hard to discern any impact of, it's probably, it's still very early. But we had a few states. I think you had four states, four or five states that ended the supplemental UI during the June survey week.

The Bureau of Labor Statistics conducts a survey during the week of the 12th of the month. and you had four states who ended the supplemental UI during that week. And based on that, you can't see anything. I mean, in fact, employment in those states actually fell, whereas in May it increased. So that wouldn't be consistent with it. And then there were, there's more states. There's probably, I'm making this up, so I don't have it exactly right. But six, eight states that ended supplemental UI by the end of June.

early July. And if you look at that, there's a few states where the June employment data is stronger than May, but there's a few states where the June employment data is weaker than May. So again, pretty hard to discern anything. But again, it's too early to tell. We'll have to wait at least another month, I think, or two before we have enough data. I did see, I think, I don't know if it was morning console or indeed, they did a survey. And they asked respondents, like, if you're not in the labor force, what's the primary reason? And UI benefits. was the lowest, the percent of respondents. Number one was child care issues and number two was health concerns. That's interesting. Which I think that is the correct rank. Yeah. I think that that'd be consistent with what I would say. But we'll see.

We'll see. I'll get a good sense of it soon. Mine was, my statistic I've been following is copper prices. I didn't look today. Maybe, Ryan, you did or Chris, but they still remain very elevated of $4.25. cents for dollars 30 cents per pound and no real change that's where we've been uh it's off the high but it's still very elevated anything over four bucks a pound is consistent with strong global economy and a lot of pricing pressures out there so that has not abated to any

significant degree no change there but pricing remains a problem and issue globally and ryan yours is have you seen lumber prices I thought they had stayed they'd been cut in half from the peak and they've stabilized, no? Or are they still coming in? In the last couple of days, they've dropped a lot. Yeah. Yeah. I think that's what we're banking on for all these other commodities that they start to come back down.

Come back down. Yeah. And do we know why they're coming down? Lumber prices? Any particular reason? Is it just a confluence of stuff? Yeah, less demand. Yeah.

That's right. Yeah, also there was, there have been reports of some speculation that had been going on there, so some reversal of the trades. Yeah. You're concerned about the coffee prices for your Wawa boost every morning, and coffee's been. You know, I haven't paid attention. Should I?

What's going on with regard to coffee prices? Coffee's going up. I think there was a bad season or something. No, really? I didn't notice that. In addition to demand. Yeah. You haven't noticed.

So Wawa is keeping the, keeping, towing the line so far. Not necessarily. I mean, I'm on autopilot. Every morning I get up. They're keeping it at a dollar for now.

That's all you need. Yeah. I mean, I get up. I take a shower. I let the dogs out. I hop in my car, go five minutes to Wawa.

I get my coffee, 16 ounce. You know, I chat with the folks outside a little bit because there's always a little bevy of, you know, people out there, you know,

congregator around the Wawa and I come home and I just you know stick in my debit card pay I don't I don't really look maybe I should be looking I don't know you pay at any any price I would pay any price for Wawa coffee at seven in the morning absolutely yes yeah no no problem no problem whatever it is I'm paying Dan are you a Wawa coffee fan what kind of what kind of coffee do you drink I don't drink coffee I if I you've seen me the energy level I I have, Mark, if I have coffee, I'm going to be awake for five days. So my wife drinks it all. The only time I ever drank coffee in my life, my wife used to be a barista at Starbucks,

and I drank coffee a lot for about a month, and then I gave it up cold turkey. That is great. So you don't need any unnatural caffeine is what you're saying. If I get caffeine in me, watch out. I'll be awake for three days. You'll see a lot of reports all of a sudden just appear if I have coffee. Now, I'm going to go out on a limb here and say Chris does not drink wah-wow coffee. He's got some kind of weird machine that drips coffee.

I do have the weird machine, but I also enjoy a wawa coffee. They make a good espresso there. Oh, okay. All right. My whole percentage has changed with that. You know, that was key. Ryan, Ryan is definitely a wawa drinker. No.

Do I have that wrong? No, I don't drink coffee. I'm like Dan. Oh. But my white doesn't. I don't know. She's a Duncan Dunance person, though. Oh, that's good too.

Duncan Dunes are good too. I like that. Yeah. They're very good. Okay, Ryan, you got, we're up to the last statistic that we follow. Ten-year treasure yields. And I think we will fill everyone in on where we are on 10-year treasury yields. And I think we've done a lot of work over the last week or so trying to understand this better.

Maybe you can fill folks in on, you know, what we've learned. And I hear you snickering, Chris. So the tenure now. 1.3. Oh, go ahead. Yeah, 1.3. Oh, they're 1.3. Oh, that's another 1.3.

Are they actually 1.2? Yes, yes. That's 1.3. Is that why you were snickering? Yes, yes. Because everything is 1.3 today. That's the magic number. That's the magic number.

That's low. Why are they so, geez, Louise, what's going on, Ryan? How you feel about your 10-year-old forecast? Hey, it's yours, too. You're in with there with me, right? No? Whoa, we can go back to the first podcast. I had a lower 10-year treasury yield than you.

Oh, wait, wait, wait. We got a long way to go for that bet, right? I mean, I'm feeling more confident. Okay, we have a ways to go. We have ways to go. Well, why are they down? I mean, what have we learned over the, I ask you this every week?

And we learn a little bit every week. So what do we learn this past week about why they're doing? Well, we have the Treasury drawing down their cash account of the Fed. And they got to get that down by the end of this month to $450 billion to be in compliance with the debt ceiling. So that's requiring less issuance to finance the stimulus. Concerns about the Delta variant, I think is also weighing on the treasury market. this idea that growth is pete, not only just in the U.S., but, you know, in Asia, and I think that's also weighing on the bond market.

And I think you and Chris brought up a good point that 1.3 is low, but they're positive, where they're negative elsewhere in the world. So the U.S. is still an attractive investment. Yeah. Yeah, I didn't realize that debt ceiling is, I think, important, right? Because to be compliant, that debt ceiling will be reinstated. The Treasury debt ceiling will be. reinstated at the end of the month, July, to be in compliance with that, the Treasury can't

hold too much cash on hand. They had a lot of cash. They've been drawing down that cash, and the result is they haven't been issuing any bonds. So the net treasury issuance, the amount that they're selling versus the amount that are being redeemed or that come to maturity has been very modest in recent last few months. And that probably is weighing on yields. The demand is held up, but the supply has been, like everything else, supplies less than the demand. Price of the bond goes up, the interest rate goes down. But that would suggest that on the other side of the deficit, the debt ceiling, whenever that is. Hopefully, when we get these fiscal packages through Congress, then we'll start to see more issuance and yields will normalize.

That's my expectation. Is that consistent with your thinking? Yeah, I just think they're going to normalize more gradually than you do. So right now in the forecast, we have 1.9% at the end of the year. You're saying, is that okay? Or is you still, you feel uncomfortable with that at 1.9? Each passing day, I'm getting more uncomfortable about it. That's fair.

You too, Chris? Is there anything that in economics that you like, I mean, there's nothing I don't like less than the debt ceiling? Oh. Oh, yeah. In terms of policy, you mean? Yeah. Well, actually, let's ask Dan that question. Dan, what do you think of the debt ceiling?

Segway. It's one of the dumbest things in the government. And that's saying something. And that's saying something. Right. Exactly. Yeah, that's how I feel. Should we explain what the debt ceiling is?

Yeah, go ahead. Fire away. Well, I'll look, Dan, yeah, he's the expert. You want to explain the debt limit, that debt ceiling? Right. Well, the reason it's what it is is it's basically a limit on the amount of debt that could be outstanding at any one time for the U.S. government. And the reason that it's stupid, that's a very technical economic term,

is because we're basically issuing debt to pay for spending that we've already approved and authorized. And so it has to just be extended because we're just basically, we're funding things that we've already done. Where we get in trouble is that we try and tie that to future spending, and so a lot of times things get held hostage because of the debt ceiling. So what most states do, for example, is they pass a debt bill and a spending bill concurrently at the same time so that they're basically approving enough debt to be issued to pay for whatever they're passing in terms of spending.

And they don't have to come back after the fact and extend that out in the future and create these fake crises that Ryan loves because they throw off his near-term forecast. Yep, that's a great explanation in exactly why it is stupid, by the way, is a good technical term. We should use that more often, I think. I teach my kids of Illinois that every, every, all the freshmen, so you have to learn that it's a very important economic term. It's something stupid. You should call it stupid. All the stupid. Okay, well, this is a good segue into the topic, the big topic, and that's all the fiscal policy discussions, debate. that's all going going in Washington.

So what I thought I do is I just spend a minute, explain kind of what's going on, turn to Dan. Dan, you can fill in any holes that I have left or, you know, if I've interpreted anything that you disagree with, you know, you can provide your color. And then I thought I'd say, here are the things I like about, I'll do this. Or we can do it another way if you think it's better. I'll say what I like about the things that are going on with regard to the fiscal policy discussion and get your reaction and see how you feel, how you guys feel about it.

Does that sound like a good game plan to go forward? Okay. All right. So step one is, let me just explain what's going on. There's really two packages, fiscal packages, making their way through the legislative process in Congress, more specifically at the moment in the Senate. The first is this bipartisan package around infrastructure. It's mostly traditional infrastructure. It's bipartisan because all the Democrats are on board. And while there's some hand-wringing about this,

it looks like there's roughly 10 Republicans that are on board. That's key because you need 60 votes in the Senate to break any filibuster and get something through law into law. And it's pretty small. It's about 600 billion in additional infrastructure. Again, traditional infrastructure, roads, bridges, dams, some other stuff like broadband and power and resilience, infrastructure, but mostly traditional infrastructure, 600 billion over 10 years. And at least on paper, and we can debate and discuss this as well, it's paid for. You know, they on a dynamic basis. And we can come back and we can talk about what dynamic means, but on a dynamic basis. The other package that's making its way through the process, and this is earlier in the process, is a $3.5 trillion set of increased government spending, some tax breaks, credits, and then some tax increases to help pay for it over the 10-year budget. budget horizon. This includes some additional kind of non-traditional infrastructure, say,

housing-related or global supply chain related, manufacturing-related. There's a fair amount of spending tax breaks with regard to addressing climate change, you know, everything from subsidies for electric vehicles to, you know, allowing the federal government to buy more energy-efficient kind of equipment and retrofitting buildings. There's a fair amount in there for child care, family, paid family leave, a lot on health care, you know, expanding out the ACA, Obamacare, expanding out Medicaid in those states that did not take advantage of the Medicaid expansion under Obamacare. And then on the tax side, you know, some tax increases on large corporations, multinationals, the well-to-do, and some other tax cuts. There may also be some rolling back of the

cap on state and local tax deductions of salt, so-called salt. So, you know, that's a really quick summary. There's a lot of moving parts here, but that kind of gives you sensitive. So 600 billion over 10 years plus 3.5 trillion. Over 10 years is 4.1 trillion. And, you know, that's kind of sort of roughly in the same ballpark as what President Biden proposed in his American families planning jobs planned back a month two, three ago, the so-called build back better agenda. So at least in spirit, scope, size, roughly, it's kind of in the ballpark with the built back better agenda. Okay, that's a quick, did it as fast as I could. Hopefully that made some sense. Let me ask the group, beginning with Dan, Dan, any holes in what I explained? Did I get anything

wrong? Is it roughly right? No, I think you did a good summary there because there's a lot in there to summarize, as you mentioned. I think the only thing, and I think there's some proper criticism being aimed at the $3.5 trillion bill is they're trying to say that it's paid for, but if you look at a lot of the assumptions they're making to pay for that, it's really not paid for. So I think there's a lot more controversy around that piece than the infrastructure bill, which is probably why they've been able to get those 10 Republicans on board for the infrastructure bill and nobody for the other side. Well, hold that thought for a second. Before we get there, though, let me ask Chris and Ryan, anything else you want to add in terms of the description of these policies, anything I miss

that you think is important to point out? No, I think you got it all. Yeah, Chris. I level. I level. I think you did it all. Okay, so I was going to say one of the reasons I like the plan, the plan ands, is that it is, it roughly pays for itself, you know, over the 10 year budget horizon on a dynamic basis. But I'm going to stop right there. Dan, you explain to me why you think, it sounds like you don't think that's right that is not going to be paid for. So what are you, what are you looking at when you say that? So I think the infrastructure piece probably, I mean, depending on how you score it, static or dynamic, and we should probably explain what that means. So on a static basis, we go through and you estimate how much something is going to cost all those equal kind of on its own. So you don't take the impacts of itself in of itself, I guess, if that's a way to put it. So we did this a lot in 2017 with the Tax Cuts and Jobs Act on a static basis. It didn't pay for itself.

And on a dynamic basis, it probably still didn't pay for itself, but it paid for a lot more of itself than it would. The reason being that if you give somebody a tax cut, it's going to generate more economic activity, which is going to result subsequently in more tax revenue, which is why you can kind of offset some of that. So they're using similar math to what was done for the Tax Cuts and Jobs Act to try and explain why these pieces are paid for over time. And that's a dubious way to do budgeting. I'm a big fan of budgeting on a static basis. It's a much more conservative way to go about things and prevents kind of downside surprises.

But if you look at a lot of the analysis that's come out so far, and it's difficult to say with certainty around the congressional proposals because we don't have a lot of hard numbers on all of those things yet. But when we looked at the Biden administration plan, for example, it's that $3.5 trillion piece that really is a bit scary. There is some budget maneuvers going on into those calculations to make things look a little bit more paid for than they really are. Some of that is because some of those spending programs don't go out into perpetuity, but the tax increases do. But if you look at a lot of those spending programs, especially in the social benefits stuff, those are going to be things that are impossible to repeal.

So even though they're scoring it is that they're going to end or sunset, those things are probably around forever once you actually pass them. The other thing is there's a lot of things, especially in tax compliance, so they're counting on a lot of money. If they give more money to the IRS, that the IRS is going to be able to close that tax gap. Those are really kind of nebulous numbers, and to budget off of those in terms of a pay for it is difficult to do. And so while I think that that $600 billion infrastructure plan, you can probably make a good case for being paid for, that $3.5 trillion really scares me, given, you know, that 202% number that we talked about just a little while ago. Yeah, you know, on the $600 billion plan in that, they do hope for some dynamic benefit, right? So of the $600 billion, I think they're counting on $50, $60 billion in a dynamic benefit.

Again, that's the increased infrastructure spending helps support economic growth. That economic growth means more tax revenue. It also means less government spending because the economy is stronger, so you don't need the same kind of spending for various types of government support. And if you count for that, I think they're expecting 10, 15% of the $600 billion to be paid for on a dynamic basis. Which, by the way, I think that's perfectly reasonable. I mean, all the budgeting we do is uncertain. There's a lot of assumptions, a lot of uncertainty around the estimates, even on a static basis. And while that applies to trying to understand the dynamic benefits of these packages, I think that gives us a more realistic understanding of where we're going to land with regard to the fiscal costs.

It's just not accounting for the economic effects, I think it means it's just a less accurate forecast of, you know, what the fiscal impacts will be. But nonetheless, that's there as well. But you make a good point on, you make a lot of good points. I think they're all really good. And by the way, just a level set, I think it is critical that we, you know,

we pay for these programs that, you know, at the end of the day, you know, as close as we can, roughly speaking, given all the uncertainty, that with an economy that's now on the track to get back to full employment, we need to put, if we're going to put forward policies, and I think we should, those policies need to be paid for one way or the other. So I agree with you on that.

And I'm not in the camp that thinks that deficits in debt don't matter. I think they will matter and they'll matter again relatively soon. And I do think you make a really good point on the amount of money being raised through closing the so-called tax gap, you know, the cheating that goes on, which I think, I think everyone agrees there's a lot of cheating going on. People aren't paying, you know, their fair share, but actually making them pay, getting them pays is going to be pretty difficult. Okay. So Chris, Ryan, you want to weigh in on this? I mean, Dan's making a point that, you know, this, you know, maybe on paper is paid for, but in reality, maybe it doesn't get close enough.

I'm saying, okay, there's some, I agree with that. but I think we're close enough. Do you guys have any views on that particular issue? I guess I'm closer to Dan on this one. I worry about some of the claims and assumptions about, say, productivity growth. If you take the infrastructure plan, for example, I think that's more about loss avoidance than gain, right?

We're likely just to repair infrastructure that we have, right, to prevent a loss in GDP growth in the future, rather than installing a new interstate highway that's going to suddenly give us a predictivity gain. So I think I would err on the side of caution in terms of reading into the gains we might get from these programs. So more than the standard. I don't get that argument at all, that one you just made because, you know, I think we have been underinvesting in infrastructure for a long time. There's such low-hanging fruit. I mean, the returns on any type of infrastructure spending you do now because we have not

in investing should be higher. I mean, when I say returns, I mean, economic returns, the gains to productivity. You know, we don't have to build a new inter-you're right. I mean, if we build a new interstate highway, that would be a game changer. But, I mean, just repairing roads so that, you know, we don't, you know, blow a tire while we're going down the road. That's a, that's a big game. It's a small game, I think. No, really? I think it's a small game. And I also, I also worry about how this thing actually gets implemented and executed, right? Okay, that's a great point. There are probably some bridges in all of us.

We probably shouldn't repair. We probably should knock them down there, right? They're already at a local level, though, if you give control, the local authorities are going to say, I want to repair every bridge in my jurisdiction. I think you need to step back. Jeez, that's an argument that we, let's not do any infrastructure spending because Oh, not at all.

Yeah. I mean, of course you're going to have that problem. By definition, going to have that problem, right? I mean, because you have to make a decision about this road or is that bridge and you're going to have that issue, but you've got to make that decision. That's not a reason not to do it. I'm saying not to do it. I'm saying we need to do it, but we have to be smart about how we execute. If you just throw out the money at a local level, everyone's going to look at their own little road and it's going to be inefficient. Yeah, and to both of those points that Chris made,

Mark, I think one of the things he's, and I think a lot of people have said this is there definitely will be some anytime we do infrastructure this big multiplier effects, especially near term, given all the construction money that goes into those things. But in terms of long-term productivity gains, you're not going to see, you know, that might move the needle for GDP for the next three, four years, but moving it 15 years from now, repairing that road probably doesn't, you know, doesn't carry a whole lot of weight. Oh, I don't, I'm not so sure about that. I mean, I don't know, Ryan, I mean, fix the Schukel Expressway a little bit. I'll make a huge difference forever. Reduce its congestion costs. I'm with you. I'm with you on this one, Mark.

But I'm also, I think we have to do it. And I think we shouldn't worry too much about how we pay for it. Interest rates are so low. And if you look at the governments, basically their debt service burden. So their interest payments as a share of GDP is really low. Like now is the time to do it. And I'm afraid we're going to make the same mistake we did after the great recession. We shifted to fiscal austerity too soon. Took a lot of wind out of the economy sales. This seems like we haven't learned our lesson. Right, but this is not fiscal austerity, Ryan. This is not increasing down the road.

This is the first step to fiscal austerity. But what about his point, though? I mean, you've got 1.3% 10-year treasury. I literally, I could put a map of the United States on my wall over here, shut my eyes, throw a dart, lands anywhere. I assure you I can find a project randomly selected that has a return that's greater than 1.3% for it. Yes. Sure.

Which is why I don't think a lot of people are arguing with the $600 billion. It's a $3.5 trillion piece of this. That really has all the controversy around it. No, no, but Chris is arguing about the infrastructure. He's arguing that the returns are low. Yeah. I'm not saying, again, I think loss avoidance is a great. reason to do it, right? If we don't do it and the bridges actually do fall down, right? We're

going to have even more of a productivity drag. So I think it, I think there's for it, but don't expect some type of economic miracle from this, this plan. It's really just about keeping the current as quo, right? Okay, well that's a, uh, a debating ploy. Don't expect a miracle. No, no, no, we're not talking miracles. Just the blocking attack line. Okay, well, those are all good, all fair debates and discussions. Let me ask you one other thing I like about the plan, at least in spirit. Just curious as to your perspective.

And that is, and this is how I frame it, that this is a plan designed to help support growth. You know, I think infrastructure will lift productivity growth. It's not a miracle. It's not a game-changing event, but it's going to move the dial. And a lot of the other spending, and we can talk about this too, will, and tax breaks are about lifting labor force participation and labor force growth, which is going to be very important going forward. But here's the point. The benefits of that stronger economy of the economic growth will go to lower middle-income households, and part because the most, a lot of the programs that are getting funding here are designed. to help lower income, lower middle income households. And in part because the tax increase is used

to help pay for all this, you know, the incidence of that fall largely on higher income well-to-do. So it's about trying to lift long-term growth, but also making sure that the benefits of that long-term growth go to the groups, the lower middle-income groups that have been left behind over the last, you know, 30, 40 years worth the skewing of the income wealth distribution. What do you think about that kind of frame? How do you think about that? Do you think that's a good argument or not so much?

I think that's a great goal and a great way to kind of start the discussion about this. But in terms of practical standpoint, I don't know that, especially that $3.5 trillion, though I don't know that it does that very well. But I agree that that's where we should want to, to move things. Absolutely. Yeah. I think there are parts of it that are very clear, right?

So I'm a big fan of the earned income tax credit. I think that that has a proven track record, bipartisan support. I think that's a program that certainly will achieve or get us closer to achieving that objective. Child care, some of the health care. Chris, just really quick on that. The EITC is being expanded for childless workers as part of the plan. So it's an expansion of the EITC, right? Okay, that's right, that's right.

And I think that's a good thing. You're targeting, you write there are income limits, right? So you're targeting a very specific population at the lower end of the income distribution. So that seems very clear. There's a lot of economic theory to support it. So I think that's a, that's very clear. Electric vehicle subsidies, that's, I think in that case, it's become, it certainly becomes less clear who's going to actually benefit from that plan.

So I think we need to take this thing apart and look case by case. I think there are certainly aspects that will achieve your stated objectives, but others that less so. Oh, yeah, yeah, I totally, right, because there's so much going on here, right? I mean, there's so many moving parts, so many, not all of them are going to be helpful just to low middle income groups. It's not that, that would be hard to believe, you know, given all the things that are going on.

But the totality of it, if you look at the broad, strokes of it, particularly on the tax side. I mean, who's going to bear the incidents of the tax, the tax increases? That is, it looks like it's working to help low-income households and the higher income households, the high net worth households are paying for it. But there are other, it's just like you were saying, there's some stuff in there, too, like the salt reduction. I mean, that's all goes to high-income taxpayers and they want to get rid of that. Yeah, that's true. Absolutely true. Yeah. That's one of those things where it feels like that has to be in there for political reasons to get that through, get enough Democratic votes to vote for it. Because, you know, obviously, yeah, it's the New England. It's Northeast. It's California. Those are the areas that got hit hardest by the cap on the salt deduction, no doubt about it. Yeah. I do agree with you with regard to, I think you said executioner risk. Did you say?

that, Chris? Yes. Was it a executioner? There, I totally agree with you. It is a complex set of proposals. You know, some of it is expanding. You know, I think it's good that a lot of it is expanding out, scaling up existing programs. Like so, for example, to help housing, build more affordable rental housing, the plan calls for an expansion of the

Trust Fund, which right now is a very small program. They want to, in part of the plane, expand that out to provide a lot more resources for rental housing. But a lot of it is new programs as well. So they're talking about as part of it a carbon border tax. That's a big, massive change in the tax code. So I do think, in my view, the most significant. threat or risk here is the execution risk.

You know, how it's going to take some pretty depth governance to make this work out in a way that is, lands us in the place where we want to land. So I totally agree with that. And I assume you do as well, Dan. Now, that's something you, I'm sure you're concerned about. Very much so. Yeah, especially in some of those social benefit programs, because as, you know, we talked about earlier, a lot of those are, or some of those are expected to sunset at a certain time.

and it's going to take that whole time just to get those programs up and running properly. And so I don't think those programs are going away anytime soon. And so you're building out a huge amount of recurring spending going forward that it's just not going to be paid for. And also it's shown historically to grow at a much faster rate than your other kind of discretionary spending items in the budget. Sounds like Dan's at an infrastructure site right now. Yeah, I'm seeing the bill in in in I'm seeing the bill put into to effect already. These guys are expecting that money. Yeah. Dan, by the way, listener, Dan's in transit.

He's somewhere, where are you in Virginia somewhere? Is that what you said? I'm just outside Harrisonburg, Virginia. Nice spot. Nice spot. Hey, before we leave this topic, one other sort of controversial debate discussion is around the tax increases, particularly the tax increases on corporations. So President Trump in his tax legislation, the tax cut in Jobs Act, TCGA, passed at the very end of 2017 implemented in 2018, lowered the top marginal rate for corporations from 35% to 21 in the proposals that are being debated. Now it's not quite clear what there was being proposed, but it's either going from 21 back up to 25 or 21 back up to 28, something like that.

there's a lot of hand-wringing, particularly in kind of conservative circles, that that would do a lot of economic damage to the economy, that going back, you know, rolling back the TCGA tax cuts from 21 to 25 or 28 would do a lot of damage. How do you think about that, Dan? Do you think that's a big deal? Would that do a lot of damage to economic growth in the long run? I think it's kind of, I wasn't surprised to see that. I think everybody thought it was coming. What I was really surprised to see was to see that and the higher capital gains rates simultaneously

because that's really a change in the way that tax policy thinkers have been looking at this. There's been a lot of push from the conservative folks lately to get rid of the corporate income tax altogether, but in exchange for that, you would tax capital gains as normal income. The problem is if you do both, and that capital is being taxed twice,

both at the personal level and at the corporate level, and that could definitely have some negative effects. But if you take the existing tax structure and just increase the corporate income tax up to 25%, I don't think, as Chris said, I don't think that's a game changer for most corporations. I think that's something that most of them would have built in contingencies for already. I mean, the tax cuts didn't do anything for business investment when you strip out the energy-related effect. So why are you on the reverse?

are people expecting a big hit? Yeah, that's from saying that in and of itself, I don't think is a huge hit. But I think what most people are maybe not only the tax nerds like myself are really thinking about is doing that and the higher capital gains taxes at the same time are going to have some interesting effects, especially on certain companies. Yeah, and of course that goes back to the point about who bears the burden here, you know, raising the top marginal rate and raising the cap gain. tax, obviously, the incidence of that is on the well-to-do, high-income households.

So I think you're right, that could have some more negative economic consequences. But again, the idea is to place the burden of paying for this, or at least partially paying for this on the well-to-do. Actually, Ryan, go ahead, Dan. I'm sorry. There's a strong argument. And I don't completely buy into the argument, but there's a strong argument that that Taylor's tax increase could be passed on to workers as well.

And I think that's very industry specific, but that's definitely a concern that's out there. And I think it's worth mentioning. Yeah, actually, worth pointing out, Bill Gale and a colleague just put out a paper, Brookings paper, looking at the TCGA tax cuts and on investment, on wages, on repatriation. what else? On share repurchases. And I thought it was pretty convincing. They looked at the two years, 2018, 19.

They didn't do 2020, obviously, because of the pandemic. And they compared that to 2016-17. So the two years prior to the TCGA implementation and the two years after, I recommend everyone go take a look at that. I mean, they pretty much showed that the impacts were pretty much on the margin, I thought, you know, not very large and consistent with our work. Okay. Yeah, I thought it was a good piece.

Yeah, it was a good piece. Oh, by the way, I have a good piece coming out on Monday, just saying it on these proposals. So you'll get my own, along with Bernard Yaros, or one of our other colleagues who's been on the podcast before. We're running these fiscal packages through our models and we'll produce a paper on Monday. So look out for that. Okay, we're going to end it this way because I know Dan needs to get on the road here. Okay, imagine you're each a senator. You can pick any state you want.

In fact, I'd like to know which state you'd like to be senator of, but, you know, you're the senator. You now have to vote on the bipartisan package first and then vote on the $3.5 trillion. And I know, you know, things haven't been nailed down yet. it's a little opaque. You're not sure what you're voting for, but let's just go with it. Okay. You know,

read, imagine that you know exactly what's in the plan, similar to what's been described. Okay. I'll go with, I'll go with Ryan first. So Ryan, where are you,

Senator from? I'm going to go to Massachusetts. Okay. Give all the fringe benefits of, you know, going to the Red Sox games, Patriots. That's right.

That's right. A good point. Very good point. So, okay, bipartisan bill is up for a vote. Oh, I vote for it. And the $3.5 trillion? I'm for it. Okay, got two votes.

Chris, where are you a senator from? I'm trying to think. I would say Washington, D.C., but, you know, that's... I'll take Maryland. Maryland, okay. Yeah. Any particular reason why Maryland? it's a pretty state it is a pretty state yeah between us he went to school there went to school

there johns hopkins right there you go yeah okay so how are you going to vote chris i know this is this actually this is this is this is really the single most important because i knew how ryan's going to vote i have a kind of a sense how dan's going to vote although he might surprise me but chris i just can't he can't read me he's like he's like down the middle so okay chris exactly so No swirling out of it. You've got to tell us who you, are you voting for that, for the bipartisan bill? Yes. Okay, yes. The $3.5 trillion? No. Oh, no. Oh, no. Oh, no. And it's clear in form, no. We're doomed. Okay, I'm going to come back to you a second. I'm going to come back to you in a second. Don't go anywhere. Don't go anywhere. Dan, Dan, Dan, how are you going to vote on the bipartisan bill? Oh, no, wait. What's

state are you senator from? I live in Pennsylvania for a reason, Mark. I love it too much. Although, looking around me at the mountain, looking around me in the hills in Virginia, I don't know that this would be a bad place either, though. I would say yes on the bipartisan deal and a hell no on the $3.5 trillion. Hell no. Okay, so we got two votes against.

Oh, the bipartisan bill, that's a done deal then. Yeah, we're done. Yep. That's going to pass. Okay, on the, now we got one vote for the 3.5 trillion and two against, you know, I'm definitely voting for it. So we're tied.

We're tied. We need Camilla Harris to come in and break the deadlock here, vice president, obviously. But before. Well, hang on, Mark. You didn't say what state you were. Oh. Well, well, you know,

Dan, you and I are going to have to vie for that Pennsylvania seat. I know, you'd make a... Two senators. Actually, you would make a great senator. I'm not in all fairness. I think you, I would vote for you, Dan. Absolutely vote. Would I contribute to his campaign?

Yeah, that would do that too. There's a seat opening up. Yeah, I contribute. Yeah, you're, I think you're a really very reasonable guy, and you'd be very good for the state. But I, yeah. Mark, I think if you and I were the two senators from P.A. the whole Senate would be a better place. You know what?

I like that idea. I like that idea a lot. Yeah. We should think about that. But here's what I wanted to ask. So, Chris, first. What would have to change in the $3.5 trillion bill for you to vote for it? Or is it just no way?

There's just nothing. Dan said hell no. So I can't imagine there's anything there that can swing his vote. But this is really key. Now, this is really key, Ryan. What is it in the legislation that you would change that would swing your vote over to a yes? So this is Joe Manchin. Joe Manchin.

I think the size, I think it's too big. It's too, or biting off too much in one bite. Okay. How big? You just skinning it down. I'd be more comfortable with something in the 1.5 to 2 trillion max. probably a trillion would be my gambit, but that's not going to fly.

And then I think there's a compromise then on the tax portion of it. What do you mean? I think the tax rates go up, but maybe they don't go, what do we say, 24, 25, I think there's some compromise there as well as on the capital gains, right? So I think there's some

right sizing, if you will, of the tax as well as just the spending. Oh, that's interesting. I wouldn't have thought would have gone there. I thought you would have gone on the spending side somehow, but you, you're more worried about the tax increases. I think to get it passed and at least give some olive branch in terms of bipartisanship here. We're listening. Yeah. Interesting. Interesting. Very interesting. Okay. Okay. Before we, we wrap this up, any else you, Dan, anything else you want to say? I mean, I kind of led the conversation, but so is there something you'd want to say that we didn't get to?

Just to emphasize, again, how important the long-term fiscal assumptions are here, because if you're talking about trillions of dollars, that's going to have an impact in that 30-year number, whether you like it or not. So it's really important to keep an eye on. I know that you're going to have some folks on in a couple weeks to talk about that in more detail, but really important what those long-term fiscal assumptions look like. Yeah, just to make that clear, Maya McGinnis, who's the director of the – I think it's called the Center for – responsible budget, I believe. It has been a, you know, very outspoken voice on budget issues and the need for fiscal discipline, which again, I think, you know, entirely appropriate. It's going to be on, I think, two weeks or three weeks from now. So we're very much looking forward to that. And, Ryan, you need to be on best behavior for that conversation. I know, you know, you give our

guests a lot of, you know, flak. So, you know, just rain it in a little bit, please, you know. I mean, you just got to remember in the long run, we're all dead. Yeah, that's true. That's very true. Our children aren't. Yeah. Hey, you know, this podcast has run on a long time. Sorry about that, Dan, but, you know, it was a really interesting topic and a lot to talk about. And I thought the way we ended, it was kind of pretty cool. It kind of summarizes the reality of the situation that, you know, there are folks that are on board, folks that are not on board, and there's folks in the middle. And those folks in the middle, you know, are, I think, appropriately worked. worried about the size of this and what it means for deficits in debt long run and what it means

for our families 30 years from now. So I think we kind of encapsulate exactly the debate that's going on in Washington. But in our forecast, we are expecting a fiscal package to get through. And actually, it's about $3.5 trillion in total over 10 years. So, you know, say that with some intrepidation, but that is in our baseline forecast. So we are expecting a package to get through the reconciliation process. That bipartisan bill will get passed, and that's part of our forecast. But we'll see. I do want to mention that we have now added to our website,

economy.com, a place where you can go and tell us what you would like us to talk about. What topics do you think we should be talking about? By the way, deficits in debt are towards the top of the list so far. But please go to economy.com. You'll see the banner. Click on that. Go to Inside Economics and tell us what you want us to talk about. And we'll get the right guests and we'll dive deeper into that.

So with that, I want to thank you for attending and talk to you next week.