WEBVTT 1 00:00:00.120 --> 00:00:02.520 And very cold Tonight lows ten to fifteen ACUA the 2 00:00:02.520 --> 00:00:05.839 real field scepter falling below zero with those strong winds 3 00:00:05.879 --> 00:00:08.000 that it's still going to be windy through Tomorrow, mostly 4 00:00:08.000 --> 00:00:09.919 sunny and very cold to I, I have twenty five 5 00:00:10.359 --> 00:00:13.240 real fields and the single digits plustery and bitterly cold. 6 00:00:13.279 --> 00:00:15.560 Tomorrow night clear to part the cloudy lows near ten 7 00:00:16.039 --> 00:00:18.320 sun will be followed by increasing cloud's Wednesday a high 8 00:00:18.399 --> 00:00:20.960 twenty nine and then mainley cloudy. Thursday will be cold 9 00:00:21.000 --> 00:00:23.559 at the period of snow likely which could accumulate one 10 00:00:23.600 --> 00:00:26.879 to three inches, especially near and south of Boston. Storm 11 00:00:26.920 --> 00:00:29.199 track even farther south could even mean less snow for 12 00:00:29.239 --> 00:00:31.800 the area and then not as cold into Friday. I'm 13 00:00:31.800 --> 00:00:35.560 accuate with the Vida realogist Brian Hopson WBZ, Boston's News Radio. 14 00:00:36.119 --> 00:00:39.719 Are you responsible for utilizing healthcare IT consulting and staff 15 00:00:39.719 --> 00:00:43.320 augmentation for a major medical facilities IT department? If so, 16 00:00:43.640 --> 00:00:47.719 Henry Ellioting Company is your solution for professional assistance. You 17 00:00:47.759 --> 00:00:51.159 can rely on their professionalism and expertise to help you 18 00:00:51.200 --> 00:00:53.759 get the best possible outcomes. Please look for them at 19 00:00:53.759 --> 00:00:57.439 the upcoming HYMNS conference in Las Vegas, or visit HENRYE 20 00:00:57.600 --> 00:01:01.799 dot com for quality healthcare, IT casulting and staffing solutions. 21 00:01:02.200 --> 00:01:05.840 That's HENRYE dot Com, Henry Elliott and Company. 22 00:01:06.760 --> 00:01:10.439 The Four Nations Face Off tournament underway now in Boston 23 00:01:10.439 --> 00:01:14.040 at the TD Garden this afternoon, Canada beating Finland five 24 00:01:14.079 --> 00:01:17.760 to three. Canada will play for the championship Thursday night 25 00:01:18.079 --> 00:01:21.760 at the Garden against Team USA, who have already qualified 26 00:01:21.799 --> 00:01:26.079 for that big game. USA, though still has a preliminary 27 00:01:26.159 --> 00:01:30.319 game to play tonight against Sweden. After one period of play, 28 00:01:30.560 --> 00:01:34.319 USA ahead one to nothing. NBA has been on its 29 00:01:34.319 --> 00:01:36.959 All Star break, but now teams getting ready to begin 30 00:01:37.000 --> 00:01:39.799 the stretch run leading up to the playoffs. Celtics getting 31 00:01:39.840 --> 00:01:42.599 back to work on Thursday night when they traveled to 32 00:01:42.760 --> 00:01:46.319 Philly to play the seventy six ers. WBZ News time 33 00:01:46.400 --> 00:01:49.799 is nine oh seven. Back now to Dan Ray and Nightside. 34 00:01:49.920 --> 00:01:50.840 I'm Al Griffith. 35 00:01:51.920 --> 00:01:58.560 It's Night Side with Danray on WBZ Costin's News Radio. 36 00:01:58.799 --> 00:02:00.400 Welcome back everyone, Thanks you very much. 37 00:02:00.400 --> 00:02:00.599 Al. 38 00:02:01.239 --> 00:02:04.920 We have heard a lot of talk recently about, certainly 39 00:02:04.959 --> 00:02:07.840 in the last month, cuts in Washington, DOGE, the Department 40 00:02:07.879 --> 00:02:12.240 of Government Deficiency, Elon musk As the head of that, 41 00:02:12.479 --> 00:02:15.479 and I think it's time for us to sort of 42 00:02:15.599 --> 00:02:17.599 take a couple of steps back and talk to someone 43 00:02:17.639 --> 00:02:21.280 who knows a lot more about the status of our 44 00:02:21.360 --> 00:02:25.840 federal debt than any of us. Someone who I have 45 00:02:25.960 --> 00:02:28.439 had on this program on several occasions, want to welcome 46 00:02:28.439 --> 00:02:33.000 back Professor Jeffrey Myron of Harvard University. Professor Myron, how 47 00:02:33.039 --> 00:02:33.560 are you tonight? 48 00:02:34.599 --> 00:02:36.280 Fine? Thank you, nice to be here. 49 00:02:36.680 --> 00:02:40.199 Great to have you back. You're at Harvard. You are 50 00:02:40.280 --> 00:02:44.840 a senior lecturer and director of undergraduate studies in Harvard's 51 00:02:44.879 --> 00:02:51.199 Economics department. You also are you have a position with 52 00:02:51.360 --> 00:02:54.919 the Cato Institute, which many of my many of my 53 00:02:55.000 --> 00:03:00.000 listeners are familiar with. And it's this is a very 54 00:03:00.120 --> 00:03:04.680 difficult issue for people to get their arms around, and 55 00:03:04.879 --> 00:03:08.960 I would like to just to try to start from 56 00:03:09.000 --> 00:03:14.759 from this perspective. To get to one billion, you need 57 00:03:14.759 --> 00:03:19.680 to have a thousand million. That gets you to one billion. 58 00:03:20.080 --> 00:03:24.000 Then to get to one trillion, you need a thousand billion. 59 00:03:25.039 --> 00:03:31.680 And we're at about thirty six trillion in debt. Are 60 00:03:31.719 --> 00:03:37.520 we well? I think technically we're underwater. But is that 61 00:03:37.680 --> 00:03:40.960 a debt that that we need to be as concerned 62 00:03:40.960 --> 00:03:44.240 about to me, it's it's one of them. It's one 63 00:03:44.240 --> 00:03:47.039 of the most one of the things that worries me most. 64 00:03:47.199 --> 00:03:50.439 Not for my generation I'm a baby boomer, but for 65 00:03:50.560 --> 00:03:53.759 subsequent generations. Am I a war reward? 66 00:03:55.759 --> 00:03:58.199 You know? I think you're right to be worried. I 67 00:03:58.240 --> 00:04:01.159 would emphasize that it's not just the level of the debt. 68 00:04:01.280 --> 00:04:04.439 Of course, the level of debt is a relevant thing 69 00:04:04.560 --> 00:04:07.240 to know, but it's that it's likely to be growing 70 00:04:07.599 --> 00:04:10.240 at a fast rate, at a much faster rate than 71 00:04:10.280 --> 00:04:12.960 the economy is likely to grow, and so it's going 72 00:04:13.000 --> 00:04:15.680 to get worse and worse and worse. So debt per 73 00:04:15.719 --> 00:04:18.639 se is not necessarily bad. Billions of people are in 74 00:04:18.720 --> 00:04:21.319 debt because they all on their mortgages, but they have 75 00:04:21.480 --> 00:04:23.959 enough expectation of future income they think they'll be able 76 00:04:23.959 --> 00:04:26.439 to pay it back. The US is in a position 77 00:04:26.519 --> 00:04:29.240 where we in effect have such a huge mortgage in 78 00:04:29.319 --> 00:04:32.519 terms of commitments to future programs like storal security, medicare, 79 00:04:32.759 --> 00:04:35.120 that we're never going to be able to pay for them. 80 00:04:35.680 --> 00:04:37.800 Okay, so let's go to the end of the road. 81 00:04:38.399 --> 00:04:40.839 If we get to that point where the debt now 82 00:04:40.959 --> 00:04:44.319 again trillion dollars trillion, here trillion. There it's thirty six 83 00:04:44.399 --> 00:04:49.680 point two trillion zero, getting towards thirty seven. Our national 84 00:04:50.839 --> 00:04:55.560 domestic product, our GDP gross national product is about twenty 85 00:04:55.639 --> 00:05:00.519 seven trillion, So our debt dwarfs the the amount of 86 00:05:00.839 --> 00:05:03.720 economic activity that we have in the United States in 87 00:05:03.759 --> 00:05:06.720 an entire year. It would be as if someone was 88 00:05:06.759 --> 00:05:11.279 making one hundred thousand dollars and their debt now was 89 00:05:11.360 --> 00:05:17.199 one hundred and fifty thousand dollars. Is that too simplistic 90 00:05:17.519 --> 00:05:19.560 a way to look at it? Is it? Or is 91 00:05:19.600 --> 00:05:20.639 it even worse than that? 92 00:05:22.120 --> 00:05:24.120 I think it's worse than that. I mean, we can 93 00:05:24.160 --> 00:05:28.879 easily imagine someone who has the expect a has a 94 00:05:28.959 --> 00:05:31.600 job as an expectation the job will continue, and say 95 00:05:31.680 --> 00:05:34.319 is going to earn one hundred thousand dollars a year 96 00:05:34.439 --> 00:05:36.920 just to take a nice simple round number and purchase 97 00:05:37.000 --> 00:05:40.560 as a house worth a million by taking out an 98 00:05:40.560 --> 00:05:43.720 eight hundred thousand dollars mortgage. Well, that's a case where 99 00:05:43.720 --> 00:05:46.920 the debt is way greater than the rate of income 100 00:05:47.000 --> 00:05:50.600 for that individual. But assuming this person doesn't spend a 101 00:05:50.639 --> 00:05:53.240 whole hundred thousand each year, say some each year pays 102 00:05:53.240 --> 00:05:56.959 off the mortgage over twenty thirty years, everything will be 103 00:05:57.000 --> 00:06:00.360 totally fine. The problem is not just the leafe levels, 104 00:06:00.560 --> 00:06:03.839 it's the growth rates. It's the projections, which of course 105 00:06:03.879 --> 00:06:06.959 will never be perfect. But if anything are being too optimistic, 106 00:06:07.000 --> 00:06:11.560 it's projections that expenditure, especially on Medicare and Social Security, 107 00:06:11.759 --> 00:06:15.160 are going to keep growing faster than GDP, and so 108 00:06:15.319 --> 00:06:18.439 that makes our ability to service that debt at some 109 00:06:18.560 --> 00:06:19.519 point impossible. 110 00:06:19.800 --> 00:06:24.399 Okay, so you focus on Medicare and Social Security, which 111 00:06:24.560 --> 00:06:30.600 are I guess, the pillars of the retirement couch. For 112 00:06:30.839 --> 00:06:34.959 most baby boomers, they have a little social Security coming in, 113 00:06:35.079 --> 00:06:39.920 they have Medicare available. What is the problem, as you 114 00:06:40.000 --> 00:06:44.720 see it, with those the exponential growth of those two programs, 115 00:06:44.800 --> 00:06:47.040 I guess is what you're saying to me. Explain it 116 00:06:47.120 --> 00:06:49.720 so everybody understands it. 117 00:06:49.720 --> 00:06:53.959 It's that we have promised to make payments to say, 118 00:06:54.000 --> 00:06:59.959 support a level of retirement income that is not affordable 119 00:07:00.519 --> 00:07:03.040 given the size of our economy and the likely growth 120 00:07:03.079 --> 00:07:06.279 rate of our economy. Same thing, we've committed to paying 121 00:07:06.680 --> 00:07:10.399 more and more for healthcare for the elderly under Medicare, 122 00:07:11.120 --> 00:07:14.319 at to a degree that we can't possibly afford because 123 00:07:14.319 --> 00:07:16.879 there just won't be enough tax revenue to possibly pay 124 00:07:17.319 --> 00:07:21.120 all of those expenditures. Now, to be clear, we do 125 00:07:21.240 --> 00:07:25.199 not need to eliminate these programs. Nobody is talking about 126 00:07:25.240 --> 00:07:28.439 eliminating those programs, but they need to be growing at 127 00:07:29.600 --> 00:07:35.000 non surely slower rates than they're currently growing, and unfortunately, 128 00:07:35.040 --> 00:07:37.639 no politicians are talking about even doing that, even making 129 00:07:37.839 --> 00:07:41.279 modest tweaks to those programs so that they're not bankrupt 130 00:07:41.279 --> 00:07:43.000 f in the economy at nearly the same rate. 131 00:07:43.639 --> 00:07:47.360 Now, are these programs Medicare and soci security? Are they 132 00:07:47.439 --> 00:07:50.560 what is referred to as unfunded liabilities? 133 00:07:52.000 --> 00:07:54.560 Yes, they can certainly be preferred that also often referred 134 00:07:54.560 --> 00:07:58.079 to as entitlements. There's roughly two kinds of programs with 135 00:07:58.160 --> 00:08:02.079 the federal government runs under those which are renewed every 136 00:08:02.120 --> 00:08:05.439 single year. The Defense budget is are authorized every year, 137 00:08:05.560 --> 00:08:08.560 the Department of Transportation, Housing most of the things that 138 00:08:08.600 --> 00:08:14.600 we think about, but source security, Medicare, Medicaid, Obamacare. They 139 00:08:14.600 --> 00:08:17.439 have been created in a way that they keep spending 140 00:08:17.480 --> 00:08:21.360 money every single year at higher, higher rates, even if 141 00:08:21.360 --> 00:08:25.279 Congress does nothing at all. So Congress has to actively 142 00:08:25.319 --> 00:08:28.199 step in to adjust the rate that they're spending money. 143 00:08:28.560 --> 00:08:31.199 So far, Congress seems to have zero appetite for doing 144 00:08:31.199 --> 00:08:33.159 that because, of course for all the people getting them 145 00:08:33.480 --> 00:08:35.559 and people expecting to getting them in the near future. 146 00:08:35.639 --> 00:08:39.159 These programs are super popular, but at some point they're 147 00:08:39.200 --> 00:08:40.000 going to be gone. 148 00:08:40.480 --> 00:08:43.519 Okay, So at some point right after this break, we're 149 00:08:43.559 --> 00:08:47.279 going to talk about these programs, going to talk about 150 00:08:47.360 --> 00:08:54.080 what is being undertaken by the newly inaugurated Trump administration. 151 00:08:54.559 --> 00:08:57.960 They are coming up on their one month anniversary later 152 00:08:58.039 --> 00:09:01.120 this week, so they've been in business now for four weeks, 153 00:09:01.159 --> 00:09:05.600 actually four weeks this very day. The Trump administration has 154 00:09:05.720 --> 00:09:11.639 been in office. They're getting tremendous criticism from their efforts 155 00:09:12.440 --> 00:09:19.399 to ask federal employees to resign except severance packages. We 156 00:09:19.480 --> 00:09:21.559 know a little bit about all of this. You know 157 00:09:21.679 --> 00:09:24.200 a lot about all of this. We'll talk about this. 158 00:09:24.279 --> 00:09:27.039 We'll talk about what can be done. 159 00:09:27.960 --> 00:09:28.159 Now. 160 00:09:28.360 --> 00:09:30.960 Back to Dan Ray live from the Window World of 161 00:09:31.039 --> 00:09:35.639 Legs sist Year. I'm doing BSY News Radio. 162 00:09:35.840 --> 00:09:39.200 Talking with Professor Jeff Myron of Harvard Universities and an 163 00:09:39.200 --> 00:09:44.879 economist and someone who this is what he lives when 164 00:09:44.919 --> 00:09:47.279 we talk about one thing which I think a lot 165 00:09:47.320 --> 00:09:50.320 of people get confused, Professor, and this is such an 166 00:09:50.360 --> 00:09:54.759 elementary question for you. I'm almost hesitant to ask it. 167 00:09:55.039 --> 00:09:58.120 The difference between the federal deficit and the federal debt. 168 00:09:58.240 --> 00:10:04.559 Many people use those those terms interchangeably. Just a quick clarification, 169 00:10:05.159 --> 00:10:07.039 difference between deficit and debt. 170 00:10:08.159 --> 00:10:12.559 Sure, the deficit is what's happening in this period, say 171 00:10:12.600 --> 00:10:15.639 this year. So this year the government had some revenue, 172 00:10:15.759 --> 00:10:20.200 it had some expenditure, and the difference is the deficit. Okay, 173 00:10:20.600 --> 00:10:25.440 The debt is adding together all the past deficits. So 174 00:10:25.639 --> 00:10:28.120 in one year, if you had a deficit of one 175 00:10:28.240 --> 00:10:31.720 hundred billion dollars, that at the end of that year, 176 00:10:31.759 --> 00:10:33.559 your debt would also be one hundred billion. But the 177 00:10:33.559 --> 00:10:36.679 next year you have another deficit of another one hundred billion, 178 00:10:36.960 --> 00:10:39.919 your debt is two hundred billion dollars, because it's the 179 00:10:40.000 --> 00:10:44.159 past deficit plus any new deficit that you've accumulated going 180 00:10:44.200 --> 00:10:46.559 forward a year, and you just keep adding that up. 181 00:10:46.679 --> 00:10:48.879 So the debt is the sum of all of our 182 00:10:48.960 --> 00:10:52.000 past deficits and surpluses. And the fact that we have 183 00:10:52.120 --> 00:10:54.879 such a large debt relative to GDP means that on 184 00:10:54.919 --> 00:10:57.879 the whole, we've almost always had deficits, and increasingly, in 185 00:10:57.919 --> 00:11:01.039 the last sort of ten years, bigger and bigger deficits. 186 00:11:01.440 --> 00:11:03.360 So that the death is just going to keep getting 187 00:11:03.600 --> 00:11:04.440 bigger and bigger. 188 00:11:04.679 --> 00:11:08.519 Yeah, it's growing exponentially. So again, these are just some 189 00:11:08.519 --> 00:11:10.399 figures that I know figures are tough on radio, but 190 00:11:10.519 --> 00:11:16.399 just your comment on these. Nineteen seventy that's obviously long 191 00:11:16.440 --> 00:11:19.320 time ago, that's fifty years ago, but it's within the 192 00:11:19.360 --> 00:11:23.000 memory of many people in my audience. Our federal debt 193 00:11:24.000 --> 00:11:27.720 was about a third three hundred and seventy one billion dollars. 194 00:11:27.720 --> 00:11:31.000 It was the third of the trillion dollars. Now our 195 00:11:31.080 --> 00:11:34.840 debt has ballooned to thirty six point two trillion dollars 196 00:11:34.919 --> 00:11:38.720 as of last month, and it just seems to grow. 197 00:11:39.039 --> 00:11:42.440 In two thousand, it was up to five trillion. In 198 00:11:42.480 --> 00:11:45.759 twenty ten, more than double it was two. It was 199 00:11:45.840 --> 00:11:49.440 thirteen trillion twenty twenty. Another ten years, it was twenty 200 00:11:49.480 --> 00:11:53.720 six trillion two thousand and twenty four. Obviously COVID had 201 00:11:53.720 --> 00:11:56.519 a big part to do with this. It really exploded 202 00:11:56.559 --> 00:12:01.120 to thirty five, which is what we're concerned about. How 203 00:12:01.320 --> 00:12:05.200 we get out of this. We talked earlier today, and 204 00:12:05.399 --> 00:12:09.159 you have kind of a dystopian view that that even 205 00:12:09.240 --> 00:12:13.960 what what Elon Musk is attempting to do is not 206 00:12:14.000 --> 00:12:15.519 going to make a huge difference. 207 00:12:15.759 --> 00:12:19.440 Correct, Correct, I don't think it's just my view. I 208 00:12:19.440 --> 00:12:21.399 think of that majority of that. 209 00:12:22.080 --> 00:12:24.919 I'm not just contributing it to you. I apologize. 210 00:12:25.759 --> 00:12:28.240 I mean, and it's pretty simple arithmetic. If you take 211 00:12:28.639 --> 00:12:34.399 the salaries of all federal employees, all of them, for 212 00:12:34.600 --> 00:12:39.639 every possible department, divisions, agency, and get something like four 213 00:12:39.720 --> 00:12:46.360 hundred billion dollars, but the government expenditure is something close 214 00:12:46.399 --> 00:12:51.480 to seven trillion dollars. So you could cut every single employee, 215 00:12:51.480 --> 00:12:54.440 eliminate their salaries, eliminate their pensions, and you still would 216 00:12:54.519 --> 00:12:57.480 make a very very small dent in the amount that 217 00:12:57.480 --> 00:13:01.120 we're spending per year because of very large percentage of 218 00:13:01.120 --> 00:13:03.799 what we spend is medicare, another large percentage of so security, 219 00:13:03.840 --> 00:13:06.399 another large percent is the interest on the debt that 220 00:13:06.399 --> 00:13:09.799 we've already accumulated, plus government spending, and then all the 221 00:13:09.840 --> 00:13:13.159 other stuff that Dooze is worrying about, some of which 222 00:13:13.200 --> 00:13:15.919 should absolutely go. I'm not that's a different question, but 223 00:13:16.120 --> 00:13:18.840 in terms of balancing the budget, it's going to make 224 00:13:18.879 --> 00:13:20.679 it most a tiny difference. 225 00:13:21.159 --> 00:13:26.039 So if we're spending seven trillion, we're only taking in 226 00:13:26.519 --> 00:13:29.399 how many trillion are we taking in in all taxes, 227 00:13:29.440 --> 00:13:32.120 what for maybe four trillion, five trillion. 228 00:13:31.879 --> 00:13:33.519 And I think it's a little higher than that, but 229 00:13:33.519 --> 00:13:35.519 I don't think we're out quite deficits of two trip. 230 00:13:35.600 --> 00:13:37.799 But yes, in that ballpark. I mean, so we have 231 00:13:37.919 --> 00:13:41.600 that it's trillions of dollars per year each year we're 232 00:13:41.639 --> 00:13:44.600 coming short in terms of having expenditure that's greater than 233 00:13:44.679 --> 00:13:47.919 revenue by several trillion. That starts to add up at 234 00:13:47.919 --> 00:13:48.960 a really fast rate. 235 00:13:49.639 --> 00:13:54.279 Okay, So if if Elon Musk came to you that said, 236 00:13:54.879 --> 00:13:57.200 what can I do to really have an impact? I mean, 237 00:13:57.240 --> 00:14:00.000 he's got people marching in the streets right now because 238 00:14:00.080 --> 00:14:03.879 they're asking for people to take a severance package. There's 239 00:14:03.879 --> 00:14:05.679 a lot of people out there would like a severance 240 00:14:05.799 --> 00:14:09.639 package who are ready to retire. And you mentioned that 241 00:14:09.720 --> 00:14:11.759 some of the people who have taken the severage package 242 00:14:12.159 --> 00:14:15.440 were prepared to retire within a couple of months and 243 00:14:15.480 --> 00:14:17.799 now they're going to be get a severance to September. 244 00:14:18.679 --> 00:14:21.440 What you're saying is something's going to be done with 245 00:14:21.480 --> 00:14:23.600 soci security, something's going to be done with medicare. What 246 00:14:23.720 --> 00:14:29.200 can be done with social security realistically or unrealistically, take 247 00:14:29.240 --> 00:14:30.080 whichever you want. 248 00:14:30.240 --> 00:14:34.320 Well, at some level. Almost everything sounds unrealistic because it's 249 00:14:34.320 --> 00:14:36.480 put all the changes that would go in the right 250 00:14:36.480 --> 00:14:39.799 direction are politically unpopular, but things that one can imagine 251 00:14:39.919 --> 00:14:44.320 would be slowly, not all at once, but gradually phasing 252 00:14:44.360 --> 00:14:48.120 in slightly higher ages of eligibility for people to start 253 00:14:48.120 --> 00:14:51.240 collecting Social Security paths its. First of all, that happened 254 00:14:51.240 --> 00:14:53.559 once in the United States, in nineteen eighty six, we 255 00:14:53.600 --> 00:14:56.440 passed the law that has been over the past roughly 256 00:14:56.480 --> 00:14:59.480 forty years, phasing in higher and higher ages. Roughly, it 257 00:14:59.559 --> 00:15:02.440 used to be everybody's got it at sixty five. Now 258 00:15:02.600 --> 00:15:06.399 people's age of full benefits is postponed to sixty seven, 259 00:15:06.480 --> 00:15:09.320 sixty eight, et cetera. So that goes in the right direction. 260 00:15:10.000 --> 00:15:13.279 You could have the rate at which benefits go up 261 00:15:14.080 --> 00:15:19.360 not be quite as big, a slightly less generous formula 262 00:15:19.399 --> 00:15:25.120 than has been the case in the past. 263 00:15:23.200 --> 00:15:24.759 As a cost a living increase. Right. 264 00:15:25.440 --> 00:15:29.440 Other two pieces, Once you start collecting benefits, the benefits 265 00:15:29.440 --> 00:15:32.519 you get per year goes up with the consumer price index, 266 00:15:32.720 --> 00:15:36.159 but the amount that we pay the new beneficiaries goes 267 00:15:36.240 --> 00:15:38.519 up with the rate of growth of wages, which is 268 00:15:38.559 --> 00:15:41.399 typically sort of one to two percent higher than the 269 00:15:41.480 --> 00:15:44.240 rate of growth of prices, So you could imagine cutting 270 00:15:44.279 --> 00:15:46.919 that back a little bit. And the point is that 271 00:15:46.960 --> 00:15:50.000 would be have a very very small effect on people 272 00:15:50.039 --> 00:15:52.159 retiring in the next you know, three to five years. 273 00:15:52.200 --> 00:15:54.480 They have a slightly bigger effect on people retiring pay 274 00:15:54.559 --> 00:15:57.919 ten years from now. So it would not be crushing anyone. 275 00:15:57.960 --> 00:16:00.960 It would not be yanking the rug out from under 276 00:16:01.000 --> 00:16:04.440 in a major way. It would be spreading the adjustment 277 00:16:04.879 --> 00:16:07.639 over decades and decades over generation. And you could do 278 00:16:07.720 --> 00:16:12.039 analogous things with medicare. Instead of everybody getting in sixty five, 279 00:16:12.600 --> 00:16:14.759 people who are say sixty or younger don't get it 280 00:16:14.840 --> 00:16:17.799 till there's sixty five and a half. They not ideal, 281 00:16:18.320 --> 00:16:21.320 obviously from the perspective of those people, but not catastrophic. 282 00:16:21.360 --> 00:16:23.879 And then people who are fifty five and younger face 283 00:16:23.960 --> 00:16:27.279 a little bit longer delay and things like that. So 284 00:16:27.440 --> 00:16:30.159 these are things which you know, economists think are sort 285 00:16:30.200 --> 00:16:33.919 of natural, but they don't pull well. No politicians seems 286 00:16:33.919 --> 00:16:36.080 to want to endorse them. So it's hard to figure 287 00:16:36.080 --> 00:16:37.960 out what sucks are going to happen until we just 288 00:16:38.000 --> 00:16:41.159 get to some crisis so huge that we end up 289 00:16:41.200 --> 00:16:43.799 kind of defaulting on the debt and that's a form 290 00:16:43.879 --> 00:16:48.840 of a huge tax levee. But it's not. It's a 291 00:16:48.879 --> 00:16:50.440 painful way to do it. There will be a lot 292 00:16:50.440 --> 00:16:52.519 of chaos and a lot of waste resources that go 293 00:16:52.559 --> 00:16:53.720 along if we do it that way. 294 00:16:53.919 --> 00:16:58.159 Okay, let's assume that we wrote we increase taxes, and 295 00:16:58.240 --> 00:17:06.000 we taxed literally at the rate of ninety of of 296 00:17:06.200 --> 00:17:09.240 you know, an immense number of people. Or let's say 297 00:17:09.240 --> 00:17:14.240 we taxed everybody at one hundred percent. That would have 298 00:17:14.279 --> 00:17:16.839 an impact, but not going to have a great impact 299 00:17:16.960 --> 00:17:19.440 besides destroying the economy. Correct. 300 00:17:19.440 --> 00:17:21.640 I think that would have a very counter productive impact. 301 00:17:21.640 --> 00:17:24.880 Because if you have tax rates that are above some range, 302 00:17:25.240 --> 00:17:28.400 it's probably not much different than the current range. People 303 00:17:28.440 --> 00:17:31.839 start evading and avoiding, moving to Canada, moving to Europe, 304 00:17:31.920 --> 00:17:34.319 finding Swiss back. They will do all manner of things 305 00:17:34.359 --> 00:17:36.720 to avoid having to pay those super high tax rates. 306 00:17:37.039 --> 00:17:39.559 So you will have made the economy less productive, you 307 00:17:39.599 --> 00:17:42.000 won't collect any extra tax revenue. You will be on 308 00:17:42.039 --> 00:17:44.880 the wrong side of the Laffer curve if you increase 309 00:17:44.960 --> 00:17:48.440 rates by those sort of amounts. And so that's not 310 00:17:48.759 --> 00:17:52.119 a sensible thing to do that because a it won't work. 311 00:17:52.279 --> 00:17:55.359 It's just it's it's incredibly counterproductive. 312 00:17:56.880 --> 00:18:04.119 So we're in a conundrum here from which politically there's 313 00:18:04.200 --> 00:18:06.319 going to be You won't have enough members of the 314 00:18:06.359 --> 00:18:08.440 four hundred and thirty five members of the House or 315 00:18:08.480 --> 00:18:10.559 the one have been members of the Senate who would 316 00:18:10.559 --> 00:18:15.559 bite the bullet in maybe maybe right the end of 317 00:18:15.599 --> 00:18:18.960 their political career. Is that's really the problem, as I 318 00:18:19.000 --> 00:18:20.240 see you outlining it. 319 00:18:20.920 --> 00:18:25.160 That is exactly the problem. And sometimes weird things happen. 320 00:18:25.440 --> 00:18:28.119 Maybe when people start to get really scared, there will 321 00:18:28.119 --> 00:18:32.400 be some grand bargain that will address the issue, but 322 00:18:32.440 --> 00:18:34.319 in a way that doesn't kick in for ten or 323 00:18:34.359 --> 00:18:37.359 twenty years, so it's not so relevant or the current 324 00:18:37.400 --> 00:18:40.640 members of Congress. But we haven't seen that many countries 325 00:18:40.680 --> 00:18:42.680 ever do that. We've seen a lot of countries have 326 00:18:43.359 --> 00:18:46.440 fiscal meltdowns where they did default on their debt. They 327 00:18:46.480 --> 00:18:50.240 did have huge disruptions to their economy because they kept 328 00:18:50.319 --> 00:18:52.119 kicking the can down the road until all of a 329 00:18:52.160 --> 00:18:54.160 sudden there was nowhere left to kicket. 330 00:18:55.039 --> 00:18:58.200 And when there's nowhere left to kick it, the currency 331 00:18:58.279 --> 00:19:00.480 is devalued. Is that not the to move? 332 00:19:01.960 --> 00:19:05.839 So I mean it is in one level of solution. 333 00:19:06.000 --> 00:19:09.440 If the government starts printing more and more money that 334 00:19:09.519 --> 00:19:13.240 creates higher inflation. That inflation reduces the value of the 335 00:19:13.279 --> 00:19:15.720 debt we owe, and so it's a form of a 336 00:19:15.799 --> 00:19:20.359 tax increase, but it does likely lead to such high 337 00:19:20.440 --> 00:19:23.680 rates of inflation that it's incredibly disruptive of the economy. 338 00:19:24.079 --> 00:19:26.599 So you'll not only have this tax increase, but you'll 339 00:19:26.640 --> 00:19:29.599 have all sorts of counterproductive behavior going on as people 340 00:19:29.599 --> 00:19:32.960 try to avoid this inflation. Dex will be like Argentina was, 341 00:19:33.119 --> 00:19:35.079 and lots of other countries have been that ended up 342 00:19:35.119 --> 00:19:38.319 in hyperinflations. So that's not an ideal way to address 343 00:19:38.359 --> 00:19:41.680 the issue, either, doing something like slowing the growth of 344 00:19:41.680 --> 00:19:45.839 expenditure in a gradual way that doesn't throw people out 345 00:19:45.880 --> 00:19:49.240 on the street, but that still over decades, does get 346 00:19:49.279 --> 00:19:53.000 the growth rate down. I think that's the least bad 347 00:19:53.000 --> 00:19:54.200 thing to do given where we. 348 00:19:54.160 --> 00:19:58.640 Are, and it's still there's still time, but time in 349 00:19:58.640 --> 00:20:03.160 that hourglass is quickly slipping away. According to what I 350 00:20:03.240 --> 00:20:05.279 hear from you and from what I know, you firmly 351 00:20:05.319 --> 00:20:07.160 believe yes. 352 00:20:07.200 --> 00:20:09.839 And I think what bothers a lot of economists is 353 00:20:09.839 --> 00:20:13.920 that it's been hard to predict in past episodes in 354 00:20:14.000 --> 00:20:17.720 various countries when the hour glass is going to run out, 355 00:20:18.160 --> 00:20:20.359 and you can sort of see it coming, and yet 356 00:20:20.359 --> 00:20:22.599 things are going along okay, and they keep seem to 357 00:20:22.599 --> 00:20:24.880 go along okay, and then people start to say, gee, 358 00:20:24.880 --> 00:20:28.880 you've been crying wolf for years now and everything's okay, 359 00:20:29.400 --> 00:20:32.240 and so you keep going. But then boom, out of nowhere, 360 00:20:32.559 --> 00:20:35.400 something pushes you over the edge. And that has happened 361 00:20:35.440 --> 00:20:37.720 to lots of economies over the centuries. 362 00:20:38.799 --> 00:20:41.880 My guest, my extraordinary guest, is my friend, Professor Jeffrey 363 00:20:41.880 --> 00:20:44.839 Myron of Harvard University. Now he's the senior lecturer, director 364 00:20:44.880 --> 00:20:48.480 of Undergraduate Studies at Harvard's Economic Department. We will take 365 00:20:48.559 --> 00:20:51.480 questions for the callers right after the break. Professor, thank 366 00:20:51.519 --> 00:20:53.720 you so much for your time tonight, and I'm going 367 00:20:53.799 --> 00:20:56.359 to try to prevail upon you to stick with us 368 00:20:57.359 --> 00:21:00.160 until the end of the hour. I know, I I 369 00:21:00.200 --> 00:21:03.559 assume classers are back tomorrow, so I'm probably. 370 00:21:03.559 --> 00:21:06.799 Probably have I'm happy, happy to stay well. 371 00:21:06.839 --> 00:21:09.200 I'll tell you you're reaching a lot of people, and 372 00:21:09.720 --> 00:21:11.720 these are people who are hearing what you say. You 373 00:21:11.839 --> 00:21:15.359 explained it so clearly. It is truly a gift that 374 00:21:15.480 --> 00:21:17.799 you have. But it's a gift that my audience now 375 00:21:17.799 --> 00:21:20.759 can enjoy. We'll get to phone calls. The only line 376 00:21:20.799 --> 00:21:24.720 that is, I only have one line six one, seven, nine, three, one, 377 00:21:24.880 --> 00:21:27.319 ten thirty. All the other lines are full up. I'll 378 00:21:27.359 --> 00:21:28.960 let you know when they open up, but right now 379 00:21:29.000 --> 00:21:31.279 six one, seven, nine, three, one, ten thirty and again, 380 00:21:31.440 --> 00:21:36.359 questions not speeches, please everyone coming back on Nightside. 381 00:21:36.920 --> 00:21:40.920 It's night Side with Dan Ray on w B Boston's 382 00:21:40.960 --> 00:21:41.960 news radio. 383 00:21:42.319 --> 00:21:45.799 My guest, Professor Jeffrey Meran of Harvard University. We'll go 384 00:21:45.880 --> 00:21:48.240 to phone calls. Here we go. We're going to start 385 00:21:48.279 --> 00:21:52.920 off with Andrea in Newton, Massachusetts. Andrea, welcome to Nightside. 386 00:21:52.920 --> 00:21:54.839 You're on with jeff Myron of Harvard University. 387 00:21:54.839 --> 00:21:57.960 Go ahead, Andrea, Hi, good evening, Thank you for taking 388 00:21:57.960 --> 00:22:02.720 my call. CAN certainly stand what you're saying. My house 389 00:22:02.759 --> 00:22:05.039 budget doesn't work if I work in a deficit. I 390 00:22:05.119 --> 00:22:09.559 understand that. But what I don't understand is why part 391 00:22:09.559 --> 00:22:11.519 of the conversation on my question is part of the 392 00:22:11.559 --> 00:22:18.240 conversation isn't that all these boomers that are responsible for 393 00:22:18.279 --> 00:22:25.359 this raging increase have been paying into this involuntary government 394 00:22:25.400 --> 00:22:30.119 investment account for forty five years in the understanding that 395 00:22:30.160 --> 00:22:33.039 they would have so security and medicare at the end 396 00:22:33.079 --> 00:22:37.000 of it. Why wouldn't it be a subject of a 397 00:22:37.000 --> 00:22:41.240 class action suit for having taken all this money from 398 00:22:41.640 --> 00:22:45.799 these taxpayers and psycho payers for all these years and 399 00:22:45.799 --> 00:22:48.440 not find it at the end when they were expecting 400 00:22:48.480 --> 00:22:48.920 to get it. 401 00:22:49.440 --> 00:22:51.640