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Is Government Debt Too High and How Much Should We Care? · Trumponomics

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. I'm Stephanie Flanders, head
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  Speaker 1: of Government and Economics at Bloomberg, and this is Trump Economics,
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  Speaker 1: the podcast that looks at the economic world of Donald Trump,
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  Speaker 1: how he's already shaped the global economy and what on
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  Speaker 1: earth is going to happen next. This week, we're zeroing
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  Speaker 1: in on government debt. Why is it so high and
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  Speaker 1: why do investors not seem to worry about it in
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  Speaker 1: the case of the US. This Monday, October thirteenth, I
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  Speaker 1: had a conversation about that question as part of a
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  Speaker 1: conference we hosted at Bloomberg for professional economists in London.
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  Speaker 1: The panel included two economists who've both been at the
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  Speaker 1: center of economic policy making in the US and the
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  Speaker 1: UK over the years. Jason Furman, now professor at Harvard University,
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  Speaker 1: previously Chairman of the Council of Economic Advisors under President
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  Speaker 1: Barack Obama, and Rupert Harrison, now a senior advisor at PIMCO,
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  Speaker 1: but not so long ago, a senior advisor to the
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  Speaker 1: former UK Chancellor George Osborne in the years after the
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  Speaker 1: global financial crisis, who was also chief economist for the
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  Speaker 1: UK government. Now the level of public debt. Government debt
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  Speaker 1: has surged in the past twenty years, doubled relative to
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  Speaker 1: the size of the economy in many industrial countries, and
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  Speaker 1: for a long time that didn't seem to matter much
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  Speaker 1: because interest rates were so low. In fact, servicing that
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  Speaker 1: debt paying the interest got cheaper even as the amount
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  Speaker 1: of debt took off. We've talked about it before, but
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  Speaker 1: that has changed lately, especially in the UK, where the
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  Speaker 1: burden of paying more and more in debt interest is
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  Speaker 1: now blowing a big hole in the labor government spending ambitions.
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  Speaker 1: In the US too, Uncle Sam's costs have more than
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  Speaker 1: trebled in the last three years to well over one
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  Speaker 1: trillion dollars a year. That bill's heading even higher in
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  Speaker 1: the next few year, partly thanks to the extra debt
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  Speaker 1: associated with the so called Big Beautiful Bill. Yet, despite this,
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  Speaker 1: US treasury bonds US government IOUs remain the anchor of
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  Speaker 1: the global financial system, the risk free asset by which
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  Speaker 1: everything else is judged. The debt trajectory is so unsustainable
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  Speaker 1: in America's place in the global economy, so in flux,
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  Speaker 1: you have to wonder when bond investors might start to
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  Speaker 1: take a different view of US treasuries and start selling them.
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  Speaker 1: But there's not much sign of that happening yet. So
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  Speaker 1: I was fascinated to hear how these two seasoned insiders
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  Speaker 1: from both sides of the Atlantic were thinking about the
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  Speaker 1: risks and potential for accidents. I started by asking Jason Furman,
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  Speaker 1: the central question of our panel is government debt now
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  Speaker 1: too high? And how much should we care?
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  Speaker 2: Yes?
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  Speaker 3: And I'm not sure, So let me go through those
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  Speaker 3: I first started working on fiscal policy in the nineteen
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  Speaker 3: nineties in the Clinton administration. At the time, we were
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  Speaker 3: on track to.
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  Speaker 2: Eliminate the debt within the decade.
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  Speaker 3: We had balanced the budget multiple years in a row,
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  Speaker 3: and the tenure treasury was at six percent. Now we
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  Speaker 3: have debt one hundred percent to GDP ratio. We have
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  Speaker 3: a deficit above six percent of GDP. As far as
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  Speaker 3: the eyes can see, we're in an enormous boom in
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  Speaker 3: terms of investment demand for AI data centers. We've created
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  Speaker 3: a lot of uncertainty about lending money to the United States,
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  Speaker 3: and the tenure treasury is around four percent. And so
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  Speaker 3: what does all of that tell me? It tells me
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  Speaker 3: that there had been a lot more capacity to borrow
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  Speaker 3: than I had ever appreciated back when I first started
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  Speaker 3: working on this topic more than twenty five years ago,
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  Speaker 3: and frankly then most of us possibly could have thought.
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  Speaker 3: Now we have more capacity than we realized. We also
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  Speaker 3: have more debt than we realized, and so the gap
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  Speaker 3: between where we are and where we can be is
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  Speaker 3: still uncomfortable. I have no doubt that if the United
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  Speaker 3: States or the UK, or France or Belgium or Japan
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  Speaker 3: continue on the fiscal trajectories that they're on, at some
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  Speaker 3: point it will become extremely expensive for them to borrow.
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  Speaker 3: You'll get the type of cycle of higher debt, higher
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  Speaker 3: interest rates, higher debt, higher interest rates, and it will
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  Speaker 3: all be painful to deal with. But I'm not sure
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  Speaker 3: when that date is. I'm not sure if I could.
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  Speaker 3: I'm responsibly tele policy maker that this should be the
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  Speaker 3: number one on your agenda. But at the very least
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  Speaker 3: my view is no one should be making the problem worse.
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  Speaker 3: They should be looking for opportunities to make it better.
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  Speaker 3: And at least in the United States, there's some basically
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  Speaker 3: accounting forcing events around the povency of Social Security and
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  Speaker 3: Medicare which come up in the next decade that I
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  Speaker 3: think are a much better way to deal with it
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  Speaker 3: than waiting for the market to force your hand when
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  Speaker 3: the options will.
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  Speaker 2: Be less good.
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  Speaker 1: Just for those who don't get into the details of those,
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  Speaker 1: just unpack that a little bit. That the forcing event
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  Speaker 1: around Medicare and Social Security.
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  Speaker 3: Yeah, social Security is our old age and survivors and
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  Speaker 3: disability pension system. It's trust fund is exhausted in twenty
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  Speaker 3: thirty three. Medicare is help for the elderly. That trust
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  Speaker 3: fund is exhausted, believe in twenty thirty four, and so
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  Speaker 3: Congress has to pass a law raising taxes, cutting benefits,
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  Speaker 3: or doing some sort of general revenue transfer gimmick, which
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  Speaker 3: would be the worst option there. You want to deal
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  Speaker 3: with these things in advance, but it's very often that
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  Speaker 3: you almost come right up against the date and deal
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  Speaker 3: with it. And these two problems total about two percent
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  Speaker 3: of GDP, and our fiscal gap is probably about three
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  Speaker 3: percent of GDP. So if you dealt with them, and
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  Speaker 3: that's a very big if, that gets you a decent
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  Speaker 3: fraction of the way to the adjustment, you would need
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  Speaker 3: to put the debt on a sustainable course.
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  Speaker 1: Rupert, how are you thinking about public debt?
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  Speaker 4: So? I think the question is it too high?
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  Speaker 5: I think when you thinking about public finance, you can't
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  Speaker 5: have a test of let is it working now or
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  Speaker 5: if even is it going to work next year or
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  Speaker 5: the year after, because you have to be thinking about
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  Speaker 5: vulnerability and you have to be thinking about much longer
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  Speaker 5: time horizons, because you can only make an impact on
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  Speaker 5: public debt.
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  Speaker 4: Over decade type horizons.
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  Speaker 5: So you have to think, like, is this creating vulnerabilities
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  Speaker 5: over the next decade?
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  Speaker 4: Is going to make three opening points?
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  Speaker 5: One is like it's clearly it will probably at some
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  Speaker 5: point happen for the US, but it is not happening now.
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  Speaker 5: As Jason just said, the US ten years and four percent,
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  Speaker 5: and the market is not signaling that US boring and
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  Speaker 5: debt is unsustainable, even though if you look at a
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  Speaker 5: chart of deficits and debt in an economics tech book,
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  Speaker 5: it clearly is unsustainable, but the market is not pricing
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  Speaker 5: that yet. The US definitely still has a different environment.
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  Speaker 5: The PIMCO house view is that the dollar is going
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  Speaker 5: to remain the global reserve asset for at least the
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  Speaker 5: next five years. Treasuries will remain the global safe asset
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  Speaker 5: for at least the next five years. There are things
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  Speaker 5: happening around the edges. So you know, there are global
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  Speaker 5: central banks diversifying reserves into gold, so gold is now
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  Speaker 5: over four thousand dollars. There are things interesting things happening
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  Speaker 5: around the edge, and in cryptocurrencies and digital currencies, both
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  Speaker 5: of you know, crypto and central bank digital currencies that
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  Speaker 5: could in the long term.
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  Speaker 4: Challenge the role of the dollar.
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  Speaker 5: But actually interestingly, in the short term, maybe the main
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  Speaker 5: effect will be if we get a huge explosion of
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  Speaker 5: stable coins that actually results in an increase in demand
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  Speaker 5: for dollars. So for now that the US is in
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  Speaker 5: a different situation, and maybe Jason's right that domestic politics
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  Speaker 5: is the forcing issue in the US rather than market pressure.
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  Speaker 5: It's clearly not the case of sitting here in the
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  Speaker 5: UK or in Europe that the high deck clearly creates vulnerabilities.
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  Speaker 5: You can see that markets are sensitive to news, and
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  Speaker 5: so you see that in countries like the UK.
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  Speaker 4: We saw the trust episode.
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  Speaker 5: Obviously there were some idiosyncratic factors that exacerbated that, but
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  Speaker 5: we've also seen market moves more recently where clearly there's
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  Speaker 5: a high sensitivity. So the day that Rachel Reeves was
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  Speaker 5: seen crying in the House of Commons. Markets reacted quite
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  Speaker 5: significantly because they thought she might be replaced as a
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  Speaker 5: Chancellor by someone who would have a looser approach to
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  Speaker 5: the fiscal rules. That tells you there's a sensitivity in markets.
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  Speaker 5: It tells you that you're vulnerable. And that's what high
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  Speaker 5: debt does, It makes you vulnerable. France is a similar
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  Speaker 5: situation where you clearly have some sensitivity in markets to
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  Speaker 5: political dysfunction and a lack of an obvious way out
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  Speaker 5: of prolonged beficits in France counterbalanced by market fears about
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  Speaker 5: well what is the DCB going to do here? And
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  Speaker 5: that's what's limiting it. So clearly for non US countries
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  Speaker 5: that vulnerability is there, and that's what high debt has done,
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  Speaker 5: it creates vulnerabilities. And I guess the final point, we
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  Speaker 5: are now in a policy world that is the precise
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  Speaker 5: mirror of the twenty tens. So in the twenty tens,
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  Speaker 5: the central banks had run out of.
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  Speaker 4: Ammunition because ins are on the.
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  Speaker 5: Floor and the only game in town was governments, so
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  Speaker 5: enormous dependence on fiscal policy. So when the pandemic hits,
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  Speaker 5: for example, fiscal policy is.
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  Speaker 4: The only game in town. Similarly, in Europe with.
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  Speaker 5: The energy crisis, fiscal policy is the only game in town.
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  Speaker 5: The next time we have recessions or crises, fiscal policy
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  Speaker 5: is going to be much more constrained because markets are
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  Speaker 5: much more sensitive, at least in the countries that are
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  Speaker 5: now pushing up against the limits. And the opposite is
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  Speaker 5: that it's now the central banks who have all the ammunition,
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  Speaker 5: and so that from a market's point of view, that's
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  Speaker 5: very important.
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  Speaker 1: As Jason said, you've if you were sort of stepping back,
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  Speaker 1: you said, the debt's gone up a lot in the
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  Speaker 1: last fifteen to twenty years, the cost of financing that debt,
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  Speaker 1: and indeed that the bond deals have not gone up
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  Speaker 1: until recently, but it's been a pretty painful jump, especially
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  Speaker 1: in the case of the UK. I just wonder when
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  Speaker 1: you look at countries sometimes you think they're vulnerable because
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  Speaker 1: the long term trajectory is clearly unsustainable in the case
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  Speaker 1: of the US, for example, in other cases, I think
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  Speaker 1: in Europe more often, and I think now, particularly in
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  Speaker 1: the case of the UK, it's about a high and
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  Speaker 1: increasing amount of financing costs that's having to come out
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  Speaker 1: of the treasurer. A lot of that has to do
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  Speaker 1: with the structure of the debt, and I just wonder
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  Speaker 1: whether it's made you think in retrospect, in twenty ten,
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  Speaker 1: one of the things that made the UK look quite
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  Speaker 1: resilient in these kind of cases was it had a
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  Speaker 1: very high maturity of debt. It's now relatively low, it's
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  Speaker 1: certainly much lower than it used to be, and has
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  Speaker 1: a very high proportion of index link guilt, which in
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  Speaker 1: retrospect has left it very vulnerable to the increase in inflation.
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  Speaker 1: So I just sort of, as a matter of debt management,
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  Speaker 1: are we now looking back and thinking that was not
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  Speaker 1: a very.
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  Speaker 5: I think it's a really interesting question because it's actually
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  Speaker 5: not that the maturity profile of the debt has got shorter.
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  Speaker 5: It's that QE has massively increased the short term sensitivity
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  Speaker 5: of the broader public sector to short term rates. I
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  Speaker 5: wasn't in government for during the kind of initial QE,
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  Speaker 5: but certainly after twenty ten this was the effective shortening
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  Speaker 5: of the UK's maturity profile through QE, and then the
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  Speaker 5: sensitivity to bank reserves is something that that has sort
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  Speaker 5: of totally missed went through the net I think of
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  Speaker 5: the policy world. I think economists really missed a tricket
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  Speaker 5: that we are actually throwing away one of the UK's
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  Speaker 5: main assets, which is this low maturity profile. I think
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  Speaker 5: that has been that is a real shape.
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  Speaker 1: I think it was referred to as idiosyncratic factors in
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  Speaker 1: this post. Everyone has said, in different ways, including you,
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  Speaker 1: that the US is in a distinctive position and it
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  Speaker 1: isn't being forced at least by the international markets to
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  Speaker 1: take the unsustainability of its debts seriously. I guess there
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  Speaker 1: were some challenges to that earlier in the year, when
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  Speaker 1: we saw the sort of safe haven status of US
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  Speaker 1: assets and treasuries seemingly being challenged a bit, and the
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  Speaker 1: dollar falling in response to trade uncertainty, and yields at
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  Speaker 1: certain times going up, although it is striking that they've
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  Speaker 1: gone down since the start of the year. Overall, How
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  Speaker 1: firm are you in your view that all the things
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  Speaker 1: that the president's doing and not going to fundamentally in
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  Speaker 1: the next few years change the way that people think
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  Speaker 1: about US as the ultimate sort of asset in the
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  Speaker 1: system of a fixed point.
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  Speaker 3: One probably should never be particularly firm about anything in economics.
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  Speaker 3: I don't think i'd make an exception for predicting Donald
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  Speaker 3: Trump but yeah, I mean there's a lot to be
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  Speaker 3: nervous about. There's a lot of uncertainty. Certainly earlier this
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  Speaker 3: year it looked that way. And I think we're highlighting
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  Speaker 3: an important point, which is a lot of this is
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  Speaker 3: not just debt to GDP ratios. For each percentage point
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  Speaker 3: that US debt goes up as a share of GDP,
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  Speaker 3: interest rates are two and a half basis points higher.
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  Speaker 3: And just use that as a rule of thumb, and
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  Speaker 3: over the next decade, maybe the debt will rise twenty
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  Speaker 3: percentage points, so interest rates will rise half a percentage point,
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  Speaker 3: And you know, that's what it is. What matters, though, enormously,
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  Speaker 3: are the types of institute that we're talking about. Liz
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  Speaker 3: Trust's many budget, I believe was a percent and a
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  Speaker 3: half of GDP. Presumably everyone in the room knows that
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  Speaker 3: number better than I do. But it wasn't that you
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  Speaker 3: could put that number into an equation and predict what
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  Speaker 3: would happen to guilts. You had to put the full
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  Speaker 3: set of institutional changes, ignoring the OBR talking about the
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  Speaker 3: independence of the Bank of England looking like she might
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  Speaker 3: do more, you know, et cetera, et cetera, add to
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  Speaker 3: the list that looked roughly like what was going on
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  Speaker 3: in the United States earlier this year. But now central
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  Speaker 3: bank independence seems just a little bit safer. But what
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  Speaker 3: I guarantee it, No, I'm much more worried about it
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  Speaker 3: on a five or six year timescale than I am
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  Speaker 3: on a five month to six month timescale. So maybe
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  Speaker 3: Rudbrook was right when he said he had a call
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  Speaker 3: for the next five years for the dollar, and I
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  Speaker 3: don't think he went beyond them.
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  Speaker 1: Rupert has also pointed, I think you were agreeing with people,
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  Speaker 1: including Treasury sectories got bessent that the stable coin could
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  Speaker 1: in itself provide some underpinning for treasuries.
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  Speaker 5: I think it's just an interesting short term possibility. Certainly
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  Speaker 5: the Treasury appeared to think that it can.
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  Speaker 1: Jason, do you think that's the real thing.
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  Speaker 3: I look at all the different ways the dollar is used.
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  Speaker 3: In most of them it's dominant. But the one place
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  Speaker 3: where it's massively overwhelmingly dominant is stable coins, where it's
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  Speaker 3: ninety nine ninety eight percent of the stable coins. That's
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  Speaker 3: higher than it is for any other purpose. And so
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  Speaker 3: I think that's interesting that the marginal thing, the new
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  Speaker 3: thing that's added to the world, in addition to reserves
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  Speaker 3: and settlement and pricing and all that stuff is even
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  Speaker 3: more dollar dominant than the stuff that came before it.
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  Speaker 3: So at the margin, yeah, I think that is possibly
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  Speaker 3: as strength. Now there's a big issue of are we
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  Speaker 3: regulating stable coins enough? Are people going to have confidence
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  Speaker 3: in them? Will live be a crisis in them? You know,
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  Speaker 3: do they get bailed out? How much are they used
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  Speaker 3: for criminal activity, et cetera, et cetera. So I'm not
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  Speaker 3: sure that the genius fect we passed here to regulate
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  Speaker 3: them gets all of that right. But yeah, the margin,
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  Speaker 3: it's more dominant than the dollar's ever been in any sphere.
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  Speaker 1: I know there's also people in this world who lobying
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  Speaker 1: the UK as we speak, to be more open to
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  Speaker 1: developing that market. Is that get out of jail free
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  Speaker 1: card for Rachel Reeves if she pushes ahead with the
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  Speaker 1: UK stable coin.
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  Speaker 5: Well, like Jason just said, at the moment, most of
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  Speaker 5: the world wants to put money into dollar stable coins.
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  Speaker 5: I'm not sure there is this huge on tap market
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  Speaker 5: for sterling stable coins. But maybe one of the frustrating
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  Speaker 5: things is we don't know, because it's quite striking that
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  Speaker 5: the UK when it comes to digital currency, is absolutely
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  Speaker 5: stuck in the middle because you've got the US going
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  Speaker 5: all in with crypto and stable coins with.
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  Speaker 4: The Genius Act.
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  Speaker 5: You've got the ECB still pursuing this concept of a
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  Speaker 5: digital Euro, largely for kind of geopolitical reasons of wanting
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  Speaker 5: to try and help create this alternative to the dollar system,
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  Speaker 5: which is quite deeply embedded in the European institutions.
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  Speaker 4: And the UK is doing neither.
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  Speaker 5: And the Governor of the Bank of England has sort
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  Speaker 5: of made some slightly less lukewarm comments about stable coins,
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  Speaker 5: but with so many caveats that, you know, I like
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  Speaker 5: stable coins, but only if we regulate them to the
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  Speaker 5: point that no one's going to use them, was I
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  Speaker 5: think my summary of his article. So the UK is
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  Speaker 5: basically not getting involved in either of these things, and
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  Speaker 5: maybe in ten fifteen years we'll look back and either
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  Speaker 5: with regret or with huge relief about that.
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  Speaker 4: I don't know which it will be.
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  Speaker 1: Jason, you talked about when there is pressure, whenever that
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  Speaker 1: pressure is seen, potentially around Medicare and social security. You
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  Speaker 1: talked in terms of tax revenues. If you were just
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  Speaker 1: looking from afar at the US, and certainly at the
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  Speaker 1: political dynamics. Now you would conclude that taxes were never
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  Speaker 1: going to go up again in the US. So how
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  Speaker 1: is that going to shift? Or? Am I right? Do
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  Speaker 1: you think there are a few taxes we might be
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  Speaker 1: able to increase tariffs? I guess we increase tariff Since the.
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  Speaker 3: Late nineteen seventies, the two parties have agreed that taxes
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  Speaker 3: should go down for the bottom ninety nine percent of
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  Speaker 3: Americans and have disagreed on the top one percent. And
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  Speaker 3: so you get this toggle and tax rates on the
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  Speaker 3: top one percent, and you get this ratchet of each
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  Speaker 3: president lowers them on the bottom ninety nine percent. That
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  Speaker 3: tax phobia, in my view, means the United States has
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  Speaker 3: among the lowest revenue as a share of GDP. So
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  Speaker 3: I think here revenue needs to play a big part
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  Speaker 3: of the solution. Now, interestingly, Donald Trump did just break
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  Speaker 3: that decades and decades of constraint by raising taxes. He
• 17:14
  Speaker 3: did it without Congress, he did it through tariffs. He
• 17:17
  Speaker 3: argues that it's paid for by foreign countries, not by Americans.
• 17:22
  Speaker 3: And you know, I happen to think that's a terribly
• 17:24
  Speaker 3: design tax. It's a sort of very very poor consumption
• 17:27
  Speaker 3: plus capital tax that with all sorts of international repercussions
• 17:31
  Speaker 3: as well. But there's a part of me that admires
• 17:35
  Speaker 3: that that difficult and painful a thing was actually done.
• 17:41
  Speaker 3: I just wish it was something else difficult of that.
• 17:45
  Speaker 3: And then the last thing I should say, though, is
• 17:47
  Speaker 3: different countries are in a different place. I mean, I'm
• 17:49
  Speaker 3: sort of flabbergasted that there's any I mean, I shouldn't
• 17:52
  Speaker 3: be because it's France, but you know, there's any attention
• 17:55
  Speaker 3: to raising as part of the fiscal solution in France.
• 17:58
  Speaker 2: I mean, the United States to move a tiny.
• 18:01
  Speaker 3: Fraction of the way towards France and friends should be
• 18:03
  Speaker 3: thinking about moving a tiny fraction or maybe more.
• 18:07
  Speaker 1: Just to spell that, you mean, maybe having more constraints
• 18:09
  Speaker 1: on spending, Yes.
• 18:11
  Speaker 3: More constraints on I mean, was an important part of
• 18:14
  Speaker 3: the debate in France.
• 18:15
  Speaker 2: Just seems to me you should be sitting.
• 18:17
  Speaker 3: There worried about productivity growth, worried that revenue is too high,
• 18:20
  Speaker 3: worried about the reasons your country is unattractive to be in.
• 18:24
  Speaker 3: And you know, I realize that, you know, the Prime Minister,
• 18:30
  Speaker 3: the President basically rejected the idea, but it's sort of
• 18:34
  Speaker 3: amazing that anyone would be thinking that's that's part of
• 18:36
  Speaker 3: the solution in France. But conversely, in the United States,
• 18:39
  Speaker 3: we need to figure out how to tacks, including at
• 18:42
  Speaker 3: least some of the bottom ninety nine percent of Americans.
• 18:46
  Speaker 1: And just to draw a link with our previous discussion
• 18:49
  Speaker 1: we had at this conference, the US has been able
• 18:51
  Speaker 1: to unilaterally raise tariffs and buy in large major trading partners.
• 18:55
  Speaker 1: Certainly Europe have not retaliated, and they've sort of accepted
• 18:59
  Speaker 1: these as deals. And mean, I guess the flip side
• 19:02
  Speaker 1: of that is if you want the US to lower
• 19:03
  Speaker 1: those tariffs, they're going to have to do it unilaterally,
• 19:06
  Speaker 1: and that's even less likely given the revenues that they're raising.
• 19:09
  Speaker 4: Is that right?
• 19:10
  Speaker 2: Yeah, I mean there's two things.
• 19:11
  Speaker 3: One is the Supreme Court is going to be hearing
• 19:13
  Speaker 3: the case and they may decide that a bunch of
• 19:16
  Speaker 3: these tariffs are illegal. Now, there's other legal courses that
• 19:20
  Speaker 3: the Trump administration can and has said it will do,
• 19:24
  Speaker 3: but it's hard to get up to quite as much
• 19:26
  Speaker 3: as the current tariff right through those, so there's a
• 19:29
  Speaker 3: legal avenue. They do remain quite unpopular with people, and
• 19:33
  Speaker 3: the next president if they're especially they're from a different
• 19:36
  Speaker 3: party might find it quite attractive that on their first
• 19:38
  Speaker 3: day in office they could sign an executive order that
• 19:41
  Speaker 3: would basically lower prices for American families. So that's a
• 19:46
  Speaker 3: little bit of an open question. I do think the
• 19:48
  Speaker 3: more dominant thing will be if they're in effect for
• 19:51
  Speaker 3: three straight years, people will really believe them. The last
• 19:55
  Speaker 3: thing though, in terms of the geopolitical dynamic, cause I
• 19:57
  Speaker 3: think Donald Trump credibly had a threat, for example, with
• 20:00
  Speaker 3: the European Union, that the United States is going to
• 20:03
  Speaker 3: set tariffs at whatever the European Union does plus fifteen,
• 20:07
  Speaker 3: and so if the European Union had retaliated with fifteen
• 20:10
  Speaker 3: percent tariffs, we would have gone to thirty. They'd gone
• 20:13
  Speaker 3: to thirty, we would have gone to forty five. I
• 20:16
  Speaker 3: don't know that any other president could carry that threat
• 20:19
  Speaker 3: out in a credible way. And so the United States
• 20:23
  Speaker 3: has established that it could have unilateral tariffs for three years.
• 20:26
  Speaker 3: While Donald Trump isn't president, I don't think it's established
• 20:30
  Speaker 3: it can have unilateral tariffs without retaliation forever. The dynamic
• 20:35
  Speaker 3: to me, feels quite different with almost anyone else in
• 20:37
  Speaker 3: the way house.
• 20:38
  Speaker 1: So to your point, they will still need the money.
• 20:40
  Speaker 1: I mean they have managed to actually increase revenues, and
• 20:42
  Speaker 1: that would be another hole.
• 20:43
  Speaker 4: In the budget.
• 20:45
  Speaker 1: I think we've actually run out of time, but I
• 20:48
  Speaker 1: think we've had a pretty wide discussion. Jason, thank you
• 20:51
  Speaker 1: very much for joining us from the US. Rupert, thanks again,
• 21:11
  Speaker 1: thanks for listening to Trumponomics from Bloomberg. It was hosted
• 21:13
  Speaker 1: by me, Stephanie Flanders, and I was in conversation with
• 21:16
  Speaker 1: Harvard professor Jason Furman and Pimco advisor Rupert Harrison. Trumponomics
• 21:22
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• 21:24
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• 21:28
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• 21:33
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• 21:40
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