Good, Bad News in Local Econ Report

Episode Transcript

Speaker 1 (00:00):
Time for another Ernesto Manifesto with our official economist, Creating
University Jack McAllister, Chairing Regional Economics Professor Ernie gods Earny,
Good morning.

Speaker 2 (00:13):
Hey Gary, good to be with you. Rosie and Lucy.

Speaker 1 (00:15):
Finally got your whole title right that time. Huh how
about that?

Speaker 2 (00:20):
Yeah, the title is longer than everything I write, you.

Speaker 1 (00:23):
Know, a long business card. Well, you're out with your
two April economic surveys. What's the good news and what's
the bad news.

Speaker 2 (00:31):
Well, the good news is we're expanding, but the bad
news is at a very slow rate, and the inflation's
ticking up a bit. And of course we've got overspending
by the federal government and that's also not good. Of course,
it's going the spinning Bill is going to Senate right now,
and what's going to come out is have to be
not very good either.

Speaker 1 (00:54):
I just saw an item here, Ernie, that there are
twelve million boomer owned businesses up for grabs this year.
The boomer generation. I guess like forty percent of businesses
are owned by by boomers and they're, you know, the
tail end of that is getting to the point where

(01:15):
they wanted to go retire and do something else. So
this is a great opportunity for younger people I guess,
to buy businesses and become entrepreneurial. How do you see
that affecting the overall economy.

Speaker 2 (01:28):
Oh? Absolutely, there's going to be a huge wealth transfer
from the baby boomers to those younger generations. I'm one
of those baby boomers, and not that I'm transferring a
lot of wealth, but nonetheless that we a lot of
wealth transfer that's going to be positive for the economy now. Unfortunately,
right now, the younger generations are facing a housing issues

(01:50):
related to housing and increasing cost of housing, and that's
having a negative impact on the younger generations.

Speaker 1 (01:57):
Yeah, this is a little in Gem's pointed this out too.
This is a little bit of an unusual cycle, is
it not. I mean, typically you would see either the
bond market or the stock market behaving differently than it
is given all of these economic pressures. Yeah, the bond

(02:17):
market is kind of stress. Now what is the impact.

Speaker 2 (02:20):
Of that that's pushing up mortgage rates? For example, the
ten year treasury, As you said, the yield has been
moving upward, and that's just a it's called sometimes called
bond vigilantes. Those individuals investors that are looking for higher yields,
and unfortunately, with inflation have to tick up, they're looking
for an increase in the yields, and that's that We're

(02:41):
going to continue to see that. Now the inflation has
moved a bit lower, but not low enough. Inflation is
still but well abow the inflate the federal reserves target
of two percent. We're probably two and a half to
three percent. I think it's even probably going to tick
up even higher in this at the end of this year.

Speaker 3 (02:58):
What is your take on the big, beautiful budget bill
that Trump has managed to vice grip through the House
but now has been swamped in the US Senate. And
Ron Johnson, the senator from Wisconsin, says, let's just go
back to pre pandemic level spending, which is fifty percent
less than what we're paying now. How did we get

(03:20):
to a fifty percent increase in expenditures, Ernie, And how
difficult will it be to trim it back to pre
pandemic level spending.

Speaker 2 (03:27):
Well, Rosie, it is big, but it's not beautiful, and
certainly that's one of the issues. We got there with
the Chips Act of twenty twenty two. We got there
with the Inflation and Deficit Reduction Act. They took it,
they had a good sense to take out the word deficit.
It did not reduce the deficit. Those contributeds that went
with the yearly deficit spending went from six up to

(03:51):
six to seven trillion dollars. And that's what we're seeing
now from the federal government. We need to see some cuts.
We will not see any cuts. And what we're going
to see if they don't extend this of the twenty
seventeen tax cuts, we're going to see a big tax
increase in beginning in twenty twenty six.

Speaker 1 (04:09):
Yeah. So, so there's no good answer here.

Speaker 3 (04:14):
Can't they cut that spending out? Why can't they cut
out that spending? They can, but they won't. They won't.

Speaker 2 (04:19):
Well, what it is we need to see from the
baby born yesterday in Omaha to Naomi Whitehead, the oldest
living American at one hundred and fourteen, all of us
had to contribute. No one wants to cut their spending.
They want somebody else's spending to be cut. We have
to cut Social Security for example, that's the third rail.
We need to cut that. We need to raise the

(04:39):
retirement as there are lots of spending cuts that could
be made that won't be made.

Speaker 3 (04:45):
Well, I just think a performance audit on Medicaid, and
it would not be done in thirty days. They would
have to be done over six months to a year.
But if you did a performance audit on two of
the three biggest expenditures, which is Medicaid in the Department
of Defense, because technically Social Security, he's paid for by
those who contribute to payroll taxes, although we all know
that's not true. If you did a performance audit, then

(05:06):
you could say to Josh Holly, the senator from Missouri,
this is why we need to cut medicaid. It's not
going to close down your rural hospital and knob Noster, Missouri,
which is what he's afraid will happen if we touch
medicaid right.

Speaker 2 (05:20):
And there could work requirements for Medicaid also in there.
And I'm a veteran and a military veteran, and i
would argue we close the VA hospitals and give veterans
a voucher to go to private facilities, that that would
be a plus for cutting the deficit.

Speaker 3 (05:38):
I've said that for years. Forget about VA hospitals, just
give them a credit card and say go anywhere you
want to get any care you want.

Speaker 1 (05:45):
Will pay the bill absolutely, But why is that so difficult?
The thing is you can't get a consensus. There's too many,
too many constituencies, and too many politicians want to get reelected. Right,
that's really what it comes down to. I mean, we
am here and get it done in the House of Representatives.
One boat, yeah, too many bus All right, Ernie, thanks,

(06:05):
always great to have you with us. You on the
summer break.

Speaker 2 (06:09):
Now always not a break. We're continuous. And then I'm
lucky to lucky to have a job, so I'm right
I'll be working.

Speaker 1 (06:16):
Knock it off your fire, Official economics doctor, Ernie Goss