Episode Transcript
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Speaker 1 (00:00):
Maya McGinnis is president of the Committee for a Responsible
Federal Budget and she joins me today to talk about
one of my favorite subjects, and that is the national debt. Maya,
welcome to the show.
Speaker 2 (00:11):
First of all, thank you, thanks so much for having me.
Speaker 1 (00:15):
So anybody who listens to this show for any length
of time knows that I'm a deficit hawk. I have
long been a deficit hawk. I am extremely concerned about
our national debt, and even more concerned about the fact
that our political class doesn't seem to be concerned at
all about the debt. So let's start with what is
(00:35):
our debt right now, at this very minute.
Speaker 2 (00:40):
So there's actually two debts out there.
Speaker 3 (00:42):
There's the debt that's held by the public, which is
how much we've borrowed from open markets. That's about twenty
eight trillion dollars. Twenty eight trillion dollars. There's a total debt,
which includes the debt we owe to ourselves because we've
actually borrowed from Social Security and a couple other trust funds.
That's thirty five trillion dollars. That debt held by the
public is the one we usually think about. And what's
(01:04):
important to know is how it is as a share
of the economy, and it's just about to hit one
hundred percent, so that the debt we have borrowed, the
debt that the public goes, is as large as our
entire economy, and that is close to the record, which
was one hundred and six percent we sent right after
World War Two. We're going to hit that in about
(01:24):
three years, which is astronomical that we would be doing
that without a world war.
Speaker 1 (01:29):
And the thing about that is you knew that the
World war was going to have an end, right you
knew it was going to come to an end. And
after the war was over, there was a massive contraction
of government spending that led to a boom in America
in the nineteen fifties when so many families entered the
middle class and so many good things happened. But because
(01:50):
we don't have a quote war to end, there's no
end in sight. And as I said, is there any
seriousness in Washington, d c. About doing something about the
national debt?
Speaker 3 (02:01):
No, you are so right, And I love talking to
someone who knows her debt history, because right after World
War two, of course, we brought that debt back down.
We bran budget surpluses, and that was just in a
matter of years.
Speaker 2 (02:13):
On the other hand, where we are now, we're.
Speaker 3 (02:15):
On track to borrow trillions more over the next decade.
Well over twenty trillion dollars is in place, even if
we don't add more borrowing, which we probably will.
Speaker 2 (02:26):
The problem is our politicians are.
Speaker 3 (02:29):
Unwilling to talk about this issue realistically, and they're unwilling
to do any of the things that would need be
needed to change it.
Speaker 2 (02:35):
The bottom line is it's really hard.
Speaker 3 (02:37):
To fix a fiscal situation that like the one we're in.
You have to make a number of hard choices. You're
going to have to talk about reducing spending. You're going
to have to fix Social Security and Medicare, which are
both headed towards insolvency, and we're going to need more revenues.
We want to grow the economy as best as possible,
but all of those things are going to have to
be part of it. Our politicians are so busy fighting
(02:58):
with each other and trying to win a less by
pandering that no one's really coming out and telling the truth.
And I think that's really jeopardizing the health, the strength,
even the national security of our country because we're just
sweeping this under the carpet.
Speaker 1 (03:11):
Are we close to a debt crisis? And what does
that look like if we are.
Speaker 3 (03:16):
So interesting, because nobody knows when that will happen. Certainly,
we are already at a point where our debt is
creating much damage, and it's economic in that it's slowing
our economic growth. Our standard of living is already lower
than it would have been if we hadn't borrowed so
much in the past. We are at the point where
our interest payments on our debt single fastest growing part
(03:37):
of the budget and second largest item in the budget,
larger than national defense, which if that isn't a warning
about how much trouble countries and I don't know what
it is. And it also means that when we have
a next crisis, whether it's a session or a pandemic
or something we don't even know what it might be,
our ability to borrow then, which is when we should borrow,
will be compromised. But I would make the case it's
(04:00):
towards from that now that we're starting to see that
our debt situation is actually undermining our economics, our national
security as well as our economic strength, and that our
ability to respond to the crises around the world is
compromised by how we've already borrowed and the fact that
we're dependent on other countries for borrowing.
Speaker 2 (04:17):
So those are the things that are already happening.
Speaker 3 (04:19):
A debt crisis will take place if other countries or
domestic lenders suddenly say, the US has so much debt.
I don't I'm not comfortable with such a low return.
I want a higher return, which means higher interest rates.
Higher interest rates slow the economy and make our interest
(04:40):
payments higher, which.
Speaker 2 (04:41):
Then creates a vicious.
Speaker 3 (04:43):
Cycle higher interest payments, higher interest rates, more that we owe,
more that we borrow, and it tanks your economy in
a way that's very difficult to get out of.
Speaker 2 (04:50):
And when it happens, it happens very quickly.
Speaker 3 (04:53):
And there's really no sign we wanted to study countries
before they got hit with these kinds of crises.
Speaker 2 (04:58):
Was anybody warning about it right beforehand?
Speaker 3 (05:01):
And the newspapers are filled with good news, So everything's
fine until suddenly it's not, which is why we really
need to get ahead of this problem.
Speaker 2 (05:08):
Before the last minute.
Speaker 1 (05:09):
Let's talk about history for a second, because I love
to talk about to follow of the Roman Empire. That's
one of my favorite things to discuss as well, and
it was a debt crisis situation that led to their downfall. Ultimately, historically,
have any nations been able to pull themselves back in
a significant enough way at the beginning of a debt
(05:30):
crisis to be able to survive, at least economically.
Speaker 3 (05:36):
I mean countries they have fiscal turnaround where they recover
over time, but never without an immense amount of pain.
So if you get to the point where you're in
that debt spiral, the people of that country suffer tremendously.
You have hyperinflation, so anybody who has savings that's basically
can be wiped away. You have massive recessions, and you
(05:56):
certainly wore depressions. You generally, as if you look back
in history, as you are, lose your standing or role
in the world, as the great nations have, many of
them have lost their staying in the world because of
over indebtedness. George Washington warned the country when it was
beginning that one of the biggest risks of one of
(06:19):
the biggest risks is an overly indebted country. And so no,
there haven't been any countries where they've hit the point
where the crisis already hit them, where they were able
to come out of it without pain. And again, the
US has this incredible, remarkable advantage, which is we are
right now the reserve currency.
Speaker 2 (06:36):
It is so much easier for us to handle these situations.
If we are able to.
Speaker 3 (06:41):
Make changes now gradually, modestly, just kind of shared across
all parts of the budget, we can do this without
incredible pain for the country. But if we wait until
that crisis starts, that big interest payments go on, interest
rates go up, you can't stop it, then it will
be very painful.
Speaker 1 (06:58):
So I want to ask you to maybe take that
out a little bit more in the sense of, you know,
what would the country? What would you if you could
wave the magic wind and create the policy that we
had to live under in order to bring this under control? Now,
what would that look like? Do you have any specifics
or is it just you know. One of the things
I love about Senator Ran Paul Is I met him
(07:19):
when he was running for office the first time, and
he had created a budget that at the time cut
one percent across everything, and he had it all lined out,
and it was the penny plan. Well, now it would
have to be like a nickel or dime plan. It's
gotten that severe since he got elected. Do you guys
have a strategy that you recommend.
Speaker 3 (07:39):
Yeah, we aptleually do, and that's right. The cost of
waiting is immense. It goes from very modest changes, particularly
in just something like social Security by every year we
wait to fix it because it's going to be insolvent
within a decade, which means they'll be huge across the
board cuts. An average couple retiring when that happens will
lose sixteen thousand dollars a year because Congress refused to
(08:00):
fix this situation. We do have a plan basically at
this point, it's sort of break glass. If there's an emergency,
we hope people will pull it out and use it.
But listen, everything is a part of it. So we
have everything on the table. You're going to have to
fix social Security and medicare. You have to look at
raising the retirement age because we're living longer, not for
people close to retirement, but for younger people.
Speaker 2 (08:22):
We need to slow the growth of some benefits and
social security.
Speaker 3 (08:24):
For the people who don't need them at all, so
we can preserve them for people who do.
Speaker 2 (08:29):
We're going to need new revenues, but I would.
Speaker 3 (08:31):
Argue, let's do it in a way that help grows
the economy by getting rid of as many tax breaks, cuts, caps, credits, deductions, exemptions,
exclusions as possible, rather than raising rates. If that's something
that we're able to do, We're going to have to
deal with how to extend the expiring tax cuts next year.
Speaker 2 (08:51):
We're going to have to cap discretionary spending.
Speaker 3 (08:53):
It's like the Penny plan, but you just put in
a cap so it can't grow more than it otherwise would.
And importantly, we need to look at parts of the
budget should get rid of completely and eliminate some of
the programs that are redundant and overlapping. Education I believe
I don't think we'd spend too much on education necessarily,
but the way we spend it. I believe there's eighty
programs at the federal and state levels which are redundant
(09:14):
and overlapping, which you could streamline for.
Speaker 2 (09:17):
Better targeted spending there. But we have to do it all.
Speaker 3 (09:21):
There's a lot of savings in healthcare and national security,
I should say, but I'm now concerned that a lot
of those national security savings and how we do things
inefficiently will actually have to be plowed back into higher
spending in other parts of defense if things like cybersecurity
continue to.
Speaker 2 (09:35):
Grow as threats. It's every part of the budget.
Speaker 3 (09:39):
It sounds like, spread their agriculture taxes, it's all there.
Speaker 1 (09:43):
Spread the pain basically, like everybody should feel it, everybody.
This is a shared sacrifice situation. Is that kind of
what we're looking at right now?
Speaker 2 (09:50):
I think that's politically yeah. I think that's the politically
fair way to do it. Nobody's gonna like.
Speaker 3 (09:56):
A deficit reduction plan, but nobody should say, like, you know,
I'm not a part of that. It's something that we
all got ourselves into this problem. Both parties did, many
generations did. We're all going to have to fix it.
It's going to have to be a compromise, which I
acknowledge our politicians don't do very well right now, But
there's going to have to be something that everybody's a
(10:17):
part of. So we're politically in it together. But also
the problem is so large. You need about seven trillion
dollars of savings over ten years just to keep the.
Speaker 2 (10:26):
Debt from growing. You'd need maybe seventeen trillion to bounce
a budget that's not even going to happen.
Speaker 3 (10:33):
I think the most important thing is we stop pretending
that we can have spending increases that we don't pay
for or tax cuts that we don't offset with lower spending.
Speaker 2 (10:41):
We start getting real about this and we put together
a debt deal.
Speaker 3 (10:44):
If we can't do it the way I just said
with those specifics, which I know everybody's like.
Speaker 2 (10:48):
Ooh ooh, I don't want to do that. I don't
want to do that's not very fun. We could also
put in place of.
Speaker 3 (10:52):
Fiscal Commission, which would help insulate some of the really
tough politics.
Speaker 2 (10:56):
Of these tough choices, where members.
Speaker 3 (10:58):
Would work together for a year or so to figure
out exactly where those compromises are.
Speaker 2 (11:02):
Between the different points of view that exists.
Speaker 1 (11:05):
One of the things that I think has to be
addressed is that we have over the last thirty to
forty years taken a lot of people off the tax
rolls entirely. And we have a lot of people and
I'm not saying that you know, we've we're going to
get out of this on the backs of people at
the lower socioeconomic level, but when people don't pay into
the system, and they don't feel any personal point personal
(11:28):
points of pain. They are far more likely to vote
for people who are promising to give them twenty five
thousand dollars for a first time home buyer, and they're
far more likely to vote for big spending ideas and
big spending plans because they're not on the hook. But
is that even politically possible to say we need to
have a more shared responsibility because everybody loves to talk
(11:50):
about paying their fair share, but they're only talking about
the richest of the rich. They're not talking about people
that are literally getting money back and not participating at all.
Speaker 3 (12:01):
Yeah, that goes right into one of my biggest pet peeves,
which is how politicians spin these political miss out there
and try to make it look like what they're talking
about is so easy. So there's definitely a problem of
people who aren't feeling any of the responsibility of government.
It seems to be free, always wanting more. That happens
when some people don't pay any taxes, though many people
(12:23):
pay payroll taxes even if not income.
Speaker 2 (12:25):
And it also happens when you deficit.
Speaker 3 (12:27):
Finance if you're borrowing, seems to be free, even though
what you're doing is you're passing that bill on to
the kids.
Speaker 2 (12:32):
But I do worry about when people say, don't.
Speaker 3 (12:35):
Worry about it, we're going to have the millionaires and
billionaires pay for this.
Speaker 2 (12:38):
There's just not enough money there. And I also worry about.
Speaker 3 (12:42):
It when people say I promise never to I promise
never to raise taxes, because we looked at that and
it turns out over ninety percent of people who promised
never to raise taxes did raise spending, and which really right,
isn't that a little tricky? So what you really want
is people say, I promise no new debt, I promise
(13:02):
not to increase the debt. That would be a political
promise from politicians that would be useful.
Speaker 2 (13:07):
But I really agree with you that.
Speaker 3 (13:09):
When people think something is free there's no cost to it,
of course they want more. And I think deficit financing
is the biggest problem that causes that.
Speaker 1 (13:17):
One of the things that I find very upsetting is
that the level of just basic economic understanding is so
low for the average American that when we start talking
about the things we're talking about, we're talking about debt service,
and we're talking about you know, medicare and social security.
Everybody seems to drop back into their well, you can't
touch my social security, you can't touch my medicare, you
(13:40):
can't touch my whatever. And until we have that true
shared sense of responsibility and start making these changes so
everybody recognizes why this is important, because you know, the
Dark Ages happened after the fall of the Roman Empire.
They called them the Dark Ages for a reason, right,
And it's not just about us being the world's reserve currency.
It's about us being a geopolitical leader and projecting strength
(14:04):
and if we bankrupt ourselves, those projections are all paper tigers.
Speaker 2 (14:10):
Yeah, I mean, I don't think that we should be
so naive.
Speaker 3 (14:13):
It's to not think that our rivals around the world
aren't cheering us on to borrow more and more. Right,
that is one of the things that absolutely weakens us.
And we don't come from a position of strength or
preparedness or versatility, like the ability to respond to different
things when our physical foundation is so weak, and it's
really hard for us to kind of wag our finger
(14:34):
and tell other countries how to act when we're not
willing to do it.
Speaker 2 (14:37):
I also think our politicians, I mean, you know.
Speaker 3 (14:41):
I'm deeply independent, and I think that there is great
things about both parties, and I also think there's huge
fiscal recklessness in both parties. And what you have right
now is both parties selling peddling these free lunches, are
leading candidates promising not to fix Social Security and Medicare,
which is the.
Speaker 2 (15:00):
Worst thing you could do for current retirees.
Speaker 3 (15:02):
Current retirees should be really concerned when they hear that promise,
because they will have benefit cuts in nine years if
those candidates keep their promises of not touching anything, and
you have them all kind of making up stories of
don't worry, we can print money, or don't worry, text
cuts could just pay for themselves, and none of these
are true. The bottom line is if you want a budget,
(15:23):
if something's worth doing, you have to pay for it.
And we're going to have to come to terms with
all the borrowing of the past and figure out a
way to get it under control. And it is so
past partisanship and pointing fingers, but we are in a
very polarized moment where it's hard to have people talking
about the things you're saying, like there's some really hard
choices out there that have to be made.
Speaker 1 (15:44):
Maya McGinnis is my guest. She is the president for
the Committee for a Responsible Federal Budget. That's like the
most boring sounding name ever, though, Maya, it's just so
you know, it is more for a Responsible Federal Budget.
But I am so great that you guys are out
there and you're sounding the alarm because I mean, I
have a fifteen year old daughter. I have grandkids already,
(16:06):
not for my fifteen year old daughter, just to be clear,
but I have great kids, and I worry about this
a ton. This is the kind of stuff that keeps
me up at night. What we're leaving for these young
people who think they think they have that hard now
they have no idea what's possible, how bad things can
get if we don't take care of this.
Speaker 3 (16:28):
It worries me so much, and in particular because I
think they're facing a.
Speaker 2 (16:32):
Very difficult world out there.
Speaker 3 (16:33):
There's so many challenges that are bigger than we've been
able to grapple with, and our over indebtedness not only.
Speaker 2 (16:39):
Is a huge problem for them, it makes there it.
Speaker 3 (16:42):
Compromises their ability to solve every one of those other problems.
We are not leaving them a budget or the flexibility
strength to compete and deal with all of the challenges
that they have on top of these huge interest payments
in this national debt.
Speaker 2 (16:58):
So I agree with you on that. Unfortunately, I also
agree with you that we have like the worst name.
No one can remember it. Our acronym is PERFA. I
know it's bad, but it's very clear. Also a laugh
line because there is no responsible budget.
Speaker 3 (17:12):
But I'll tell you what the work is fascinating and
talking with people who care about the issue and trying
to get people more engaged and tell their politicians like,
don't pander to me.
Speaker 2 (17:21):
We're grown ups here. We actually want to do.
Speaker 3 (17:23):
Right by our kids and grandkids. Don't pander to me.
Tell me how we're going to fix this. And that's
that's what we like to hear when people are talking
about my.
Speaker 1 (17:31):
I appreciate my jam and all. Yeah, I appreciate your
time so much. I'm sure we'll talk again in the
future up too, all right, that is Maya McGinnis
Maya McGinnis is president of the Committee for a Responsible
Federal Budget and she joins me today to talk about
one of my favorite subjects, and that is the national debt. Maya,
welcome to the show.
Speaker 2 (00:11):
First of all, thank you, thanks so much for having me.
Speaker 1 (00:15):
So anybody who listens to this show for any length
of time knows that I'm a deficit hawk. I have
long been a deficit hawk. I am extremely concerned about
our national debt, and even more concerned about the fact
that our political class doesn't seem to be concerned at
all about the debt. So let's start with what is
(00:35):
our debt right now, at this very minute.
Speaker 2 (00:40):
So there's actually two debts out there.
Speaker 3 (00:42):
There's the debt that's held by the public, which is
how much we've borrowed from open markets. That's about twenty
eight trillion dollars. Twenty eight trillion dollars. There's a total debt,
which includes the debt we owe to ourselves because we've
actually borrowed from Social Security and a couple other trust funds.
That's thirty five trillion dollars. That debt held by the
public is the one we usually think about. And what's
(01:04):
important to know is how it is as a share
of the economy, and it's just about to hit one
hundred percent, so that the debt we have borrowed, the
debt that the public goes, is as large as our
entire economy, and that is close to the record, which
was one hundred and six percent we sent right after
World War Two. We're going to hit that in about
(01:24):
three years, which is astronomical that we would be doing
that without a world war.
Speaker 1 (01:29):
And the thing about that is you knew that the
World war was going to have an end, right you
knew it was going to come to an end. And
after the war was over, there was a massive contraction
of government spending that led to a boom in America
in the nineteen fifties when so many families entered the
middle class and so many good things happened. But because
(01:50):
we don't have a quote war to end, there's no
end in sight. And as I said, is there any
seriousness in Washington, d c. About doing something about the
national debt?
Speaker 3 (02:01):
No, you are so right, And I love talking to
someone who knows her debt history, because right after World
War two, of course, we brought that debt back down.
We bran budget surpluses, and that was just in a
matter of years.
Speaker 2 (02:13):
On the other hand, where we are now, we're.
Speaker 3 (02:15):
On track to borrow trillions more over the next decade.
Well over twenty trillion dollars is in place, even if
we don't add more borrowing, which we probably will.
Speaker 2 (02:26):
The problem is our politicians are.
Speaker 3 (02:29):
Unwilling to talk about this issue realistically, and they're unwilling
to do any of the things that would need be
needed to change it.
Speaker 2 (02:35):
The bottom line is it's really hard.
Speaker 3 (02:37):
To fix a fiscal situation that like the one we're in.
You have to make a number of hard choices. You're
going to have to talk about reducing spending. You're going
to have to fix Social Security and Medicare, which are
both headed towards insolvency, and we're going to need more revenues.
We want to grow the economy as best as possible,
but all of those things are going to have to
be part of it. Our politicians are so busy fighting
(02:58):
with each other and trying to win a less by
pandering that no one's really coming out and telling the truth.
And I think that's really jeopardizing the health, the strength,
even the national security of our country because we're just
sweeping this under the carpet.
Speaker 1 (03:11):
Are we close to a debt crisis? And what does
that look like if we are.
Speaker 3 (03:16):
So interesting, because nobody knows when that will happen. Certainly,
we are already at a point where our debt is
creating much damage, and it's economic in that it's slowing
our economic growth. Our standard of living is already lower
than it would have been if we hadn't borrowed so
much in the past. We are at the point where
our interest payments on our debt single fastest growing part
(03:37):
of the budget and second largest item in the budget,
larger than national defense, which if that isn't a warning
about how much trouble countries and I don't know what
it is. And it also means that when we have
a next crisis, whether it's a session or a pandemic
or something we don't even know what it might be,
our ability to borrow then, which is when we should borrow,
will be compromised. But I would make the case it's
(04:00):
towards from that now that we're starting to see that
our debt situation is actually undermining our economics, our national
security as well as our economic strength, and that our
ability to respond to the crises around the world is
compromised by how we've already borrowed and the fact that
we're dependent on other countries for borrowing.
Speaker 2 (04:17):
So those are the things that are already happening.
Speaker 3 (04:19):
A debt crisis will take place if other countries or
domestic lenders suddenly say, the US has so much debt.
I don't I'm not comfortable with such a low return.
I want a higher return, which means higher interest rates.
Higher interest rates slow the economy and make our interest
(04:40):
payments higher, which.
Speaker 2 (04:41):
Then creates a vicious.
Speaker 3 (04:43):
Cycle higher interest payments, higher interest rates, more that we owe,
more that we borrow, and it tanks your economy in
a way that's very difficult to get out of.
Speaker 2 (04:50):
And when it happens, it happens very quickly.
Speaker 3 (04:53):
And there's really no sign we wanted to study countries
before they got hit with these kinds of crises.
Speaker 2 (04:58):
Was anybody warning about it right beforehand?
Speaker 3 (05:01):
And the newspapers are filled with good news, So everything's
fine until suddenly it's not, which is why we really
need to get ahead of this problem.
Speaker 2 (05:08):
Before the last minute.
Speaker 1 (05:09):
Let's talk about history for a second, because I love
to talk about to follow of the Roman Empire. That's
one of my favorite things to discuss as well, and
it was a debt crisis situation that led to their downfall. Ultimately, historically,
have any nations been able to pull themselves back in
a significant enough way at the beginning of a debt
(05:30):
crisis to be able to survive, at least economically.
Speaker 3 (05:36):
I mean countries they have fiscal turnaround where they recover
over time, but never without an immense amount of pain.
So if you get to the point where you're in
that debt spiral, the people of that country suffer tremendously.
You have hyperinflation, so anybody who has savings that's basically
can be wiped away. You have massive recessions, and you
(05:56):
certainly wore depressions. You generally, as if you look back
in history, as you are, lose your standing or role
in the world, as the great nations have, many of
them have lost their staying in the world because of
over indebtedness. George Washington warned the country when it was
beginning that one of the biggest risks of one of
(06:19):
the biggest risks is an overly indebted country. And so no,
there haven't been any countries where they've hit the point
where the crisis already hit them, where they were able
to come out of it without pain. And again, the
US has this incredible, remarkable advantage, which is we are
right now the reserve currency.
Speaker 2 (06:36):
It is so much easier for us to handle these situations.
If we are able to.
Speaker 3 (06:41):
Make changes now gradually, modestly, just kind of shared across
all parts of the budget, we can do this without
incredible pain for the country. But if we wait until
that crisis starts, that big interest payments go on, interest
rates go up, you can't stop it, then it will
be very painful.
Speaker 1 (06:58):
So I want to ask you to maybe take that
out a little bit more in the sense of, you know,
what would the country? What would you if you could
wave the magic wind and create the policy that we
had to live under in order to bring this under control? Now,
what would that look like? Do you have any specifics
or is it just you know. One of the things
I love about Senator Ran Paul Is I met him
(07:19):
when he was running for office the first time, and
he had created a budget that at the time cut
one percent across everything, and he had it all lined out,
and it was the penny plan. Well, now it would
have to be like a nickel or dime plan. It's
gotten that severe since he got elected. Do you guys
have a strategy that you recommend.
Speaker 3 (07:39):
Yeah, we aptleually do, and that's right. The cost of
waiting is immense. It goes from very modest changes, particularly
in just something like social Security by every year we
wait to fix it because it's going to be insolvent
within a decade, which means they'll be huge across the
board cuts. An average couple retiring when that happens will
lose sixteen thousand dollars a year because Congress refused to
(08:00):
fix this situation. We do have a plan basically at
this point, it's sort of break glass. If there's an emergency,
we hope people will pull it out and use it.
But listen, everything is a part of it. So we
have everything on the table. You're going to have to
fix social Security and medicare. You have to look at
raising the retirement age because we're living longer, not for
people close to retirement, but for younger people.
Speaker 2 (08:22):
We need to slow the growth of some benefits and
social security.
Speaker 3 (08:24):
For the people who don't need them at all, so
we can preserve them for people who do.
Speaker 2 (08:29):
We're going to need new revenues, but I would.
Speaker 3 (08:31):
Argue, let's do it in a way that help grows
the economy by getting rid of as many tax breaks, cuts, caps, credits, deductions, exemptions,
exclusions as possible, rather than raising rates. If that's something
that we're able to do, We're going to have to
deal with how to extend the expiring tax cuts next year.
Speaker 2 (08:51):
We're going to have to cap discretionary spending.
Speaker 3 (08:53):
It's like the Penny plan, but you just put in
a cap so it can't grow more than it otherwise would.
And importantly, we need to look at parts of the
budget should get rid of completely and eliminate some of
the programs that are redundant and overlapping. Education I believe
I don't think we'd spend too much on education necessarily,
but the way we spend it. I believe there's eighty
programs at the federal and state levels which are redundant
(09:14):
and overlapping, which you could streamline for.
Speaker 2 (09:17):
Better targeted spending there. But we have to do it all.
Speaker 3 (09:21):
There's a lot of savings in healthcare and national security,
I should say, but I'm now concerned that a lot
of those national security savings and how we do things
inefficiently will actually have to be plowed back into higher
spending in other parts of defense if things like cybersecurity
continue to.
Speaker 2 (09:35):
Grow as threats. It's every part of the budget.
Speaker 3 (09:39):
It sounds like, spread their agriculture taxes, it's all there.
Speaker 1 (09:43):
Spread the pain basically, like everybody should feel it, everybody.
This is a shared sacrifice situation. Is that kind of
what we're looking at right now?
Speaker 2 (09:50):
I think that's politically yeah. I think that's the politically
fair way to do it. Nobody's gonna like.
Speaker 3 (09:56):
A deficit reduction plan, but nobody should say, like, you know,
I'm not a part of that. It's something that we
all got ourselves into this problem. Both parties did, many
generations did. We're all going to have to fix it.
It's going to have to be a compromise, which I
acknowledge our politicians don't do very well right now, But
there's going to have to be something that everybody's a
(10:17):
part of. So we're politically in it together. But also
the problem is so large. You need about seven trillion
dollars of savings over ten years just to keep the.
Speaker 2 (10:26):
Debt from growing. You'd need maybe seventeen trillion to bounce
a budget that's not even going to happen.
Speaker 3 (10:33):
I think the most important thing is we stop pretending
that we can have spending increases that we don't pay
for or tax cuts that we don't offset with lower spending.
Speaker 2 (10:41):
We start getting real about this and we put together
a debt deal.
Speaker 3 (10:44):
If we can't do it the way I just said
with those specifics, which I know everybody's like.
Speaker 2 (10:48):
Ooh ooh, I don't want to do that. I don't
want to do that's not very fun. We could also
put in place of.
Speaker 3 (10:52):
Fiscal Commission, which would help insulate some of the really
tough politics.
Speaker 2 (10:56):
Of these tough choices, where members.
Speaker 3 (10:58):
Would work together for a year or so to figure
out exactly where those compromises are.
Speaker 2 (11:02):
Between the different points of view that exists.
Speaker 1 (11:05):
One of the things that I think has to be
addressed is that we have over the last thirty to
forty years taken a lot of people off the tax
rolls entirely. And we have a lot of people and
I'm not saying that you know, we've we're going to
get out of this on the backs of people at
the lower socioeconomic level, but when people don't pay into
the system, and they don't feel any personal point personal
(11:28):
points of pain. They are far more likely to vote
for people who are promising to give them twenty five
thousand dollars for a first time home buyer, and they're
far more likely to vote for big spending ideas and
big spending plans because they're not on the hook. But
is that even politically possible to say we need to
have a more shared responsibility because everybody loves to talk
(11:50):
about paying their fair share, but they're only talking about
the richest of the rich. They're not talking about people
that are literally getting money back and not participating at all.
Speaker 3 (12:01):
Yeah, that goes right into one of my biggest pet peeves,
which is how politicians spin these political miss out there
and try to make it look like what they're talking
about is so easy. So there's definitely a problem of
people who aren't feeling any of the responsibility of government.
It seems to be free, always wanting more. That happens
when some people don't pay any taxes, though many people
(12:23):
pay payroll taxes even if not income.
Speaker 2 (12:25):
And it also happens when you deficit.
Speaker 3 (12:27):
Finance if you're borrowing, seems to be free, even though
what you're doing is you're passing that bill on to
the kids.
Speaker 2 (12:32):
But I do worry about when people say, don't.
Speaker 3 (12:35):
Worry about it, we're going to have the millionaires and
billionaires pay for this.
Speaker 2 (12:38):
There's just not enough money there. And I also worry about.
Speaker 3 (12:42):
It when people say I promise never to I promise
never to raise taxes, because we looked at that and
it turns out over ninety percent of people who promised
never to raise taxes did raise spending, and which really right,
isn't that a little tricky? So what you really want
is people say, I promise no new debt, I promise
(13:02):
not to increase the debt. That would be a political
promise from politicians that would be useful.
Speaker 2 (13:07):
But I really agree with you that.
Speaker 3 (13:09):
When people think something is free there's no cost to it,
of course they want more. And I think deficit financing
is the biggest problem that causes that.
Speaker 1 (13:17):
One of the things that I find very upsetting is
that the level of just basic economic understanding is so
low for the average American that when we start talking
about the things we're talking about, we're talking about debt service,
and we're talking about you know, medicare and social security.
Everybody seems to drop back into their well, you can't
touch my social security, you can't touch my medicare, you
(13:40):
can't touch my whatever. And until we have that true
shared sense of responsibility and start making these changes so
everybody recognizes why this is important, because you know, the
Dark Ages happened after the fall of the Roman Empire.
They called them the Dark Ages for a reason, right,
And it's not just about us being the world's reserve currency.
It's about us being a geopolitical leader and projecting strength
(14:04):
and if we bankrupt ourselves, those projections are all paper tigers.
Speaker 2 (14:10):
Yeah, I mean, I don't think that we should be
so naive.
Speaker 3 (14:13):
It's to not think that our rivals around the world
aren't cheering us on to borrow more and more. Right,
that is one of the things that absolutely weakens us.
And we don't come from a position of strength or
preparedness or versatility, like the ability to respond to different
things when our physical foundation is so weak, and it's
really hard for us to kind of wag our finger
(14:34):
and tell other countries how to act when we're not
willing to do it.
Speaker 2 (14:37):
I also think our politicians, I mean, you know.
Speaker 3 (14:41):
I'm deeply independent, and I think that there is great
things about both parties, and I also think there's huge
fiscal recklessness in both parties. And what you have right
now is both parties selling peddling these free lunches, are
leading candidates promising not to fix Social Security and Medicare,
which is the.
Speaker 2 (15:00):
Worst thing you could do for current retirees.
Speaker 3 (15:02):
Current retirees should be really concerned when they hear that promise,
because they will have benefit cuts in nine years if
those candidates keep their promises of not touching anything, and
you have them all kind of making up stories of
don't worry, we can print money, or don't worry, text
cuts could just pay for themselves, and none of these
are true. The bottom line is if you want a budget,
(15:23):
if something's worth doing, you have to pay for it.
And we're going to have to come to terms with
all the borrowing of the past and figure out a
way to get it under control. And it is so
past partisanship and pointing fingers, but we are in a
very polarized moment where it's hard to have people talking
about the things you're saying, like there's some really hard
choices out there that have to be made.
Speaker 1 (15:44):
Maya McGinnis is my guest. She is the president for
the Committee for a Responsible Federal Budget. That's like the
most boring sounding name ever, though, Maya, it's just so
you know, it is more for a Responsible Federal Budget.
But I am so great that you guys are out
there and you're sounding the alarm because I mean, I
have a fifteen year old daughter. I have grandkids already,
(16:06):
not for my fifteen year old daughter, just to be clear,
but I have great kids, and I worry about this
a ton. This is the kind of stuff that keeps
me up at night. What we're leaving for these young
people who think they think they have that hard now
they have no idea what's possible, how bad things can
get if we don't take care of this.
Speaker 3 (16:28):
It worries me so much, and in particular because I
think they're facing a.
Speaker 2 (16:32):
Very difficult world out there.
Speaker 3 (16:33):
There's so many challenges that are bigger than we've been
able to grapple with, and our over indebtedness not only.
Speaker 2 (16:39):
Is a huge problem for them, it makes there it.
Speaker 3 (16:42):
Compromises their ability to solve every one of those other problems.
We are not leaving them a budget or the flexibility
strength to compete and deal with all of the challenges
that they have on top of these huge interest payments
in this national debt.
Speaker 2 (16:58):
So I agree with you on that. Unfortunately, I also
agree with you that we have like the worst name.
No one can remember it. Our acronym is PERFA. I
know it's bad, but it's very clear. Also a laugh
line because there is no responsible budget.
Speaker 3 (17:12):
But I'll tell you what the work is fascinating and
talking with people who care about the issue and trying
to get people more engaged and tell their politicians like,
don't pander to me.
Speaker 2 (17:21):
We're grown ups here. We actually want to do.
Speaker 3 (17:23):
Right by our kids and grandkids. Don't pander to me.
Tell me how we're going to fix this. And that's
that's what we like to hear when people are talking
about my.
Speaker 1 (17:31):
I appreciate my jam and all. Yeah, I appreciate your
time so much. I'm sure we'll talk again in the
future up too, all right, that is Maya McGinnis
The Mandy Connell Podcast News
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