Scott Tong, Federal Government, Zach Molar discussed on Marketplace with Kai Ryssdal

Automatic TRANSCRIPT

The segment of the program is brought brought to you by the letter t which stands for trillions which is an amount in dollars that you have to use to describe the federal budget deficit the the Treasury Department said this week that for the first eleven months of this fiscal year that is from one October two thousand eighteen to thirty September two thousand nineteen the the government spent a trillion dollars more than it took in the last time the country saw this much annual red ink was two thousand twelve when the financial crisis and great recession were much bigger in the rear view mirror a time win. John has deficits made some sense now not quite as much sense as marketplace's Scott Tong reports from Washington. If if you look at chart of the federal budget deficit over the past decade it starts up over a trillion dollars in two thousand nine. It's way down in two thousand fifteen and comes back up shaped. Ah You as in uh-huh because most economists say that in an expanding economy like the one we have now the deficit is going the wrong way. Harvard budget scholar Collar Linda billeness what we should be doing at a time when the economy is doing reasonably well is to be paying down on our debts and reducing the deficit people in companies making good money should be paying lots and taxes but they're not she says because of the trump tax cuts two years ago. Oh and when twenty twelve a trillion dollar deficit made more sense argues Zach Molar at the third way think tank we clung out of the great recession and government spending naturally actually rose you have more people that are able to go onto food. Assistance and other anti-poverty programs plus a massive stimulus package pige and then on the tax side. If people make less money they pay less in taxes. That would likely happen again whenever the next recession hits hiking the deficit further north author trillion. Can it go up. Forever depends a lot of economics. His psychology economist Joe Minarik at the Conference Board's Committee on Economic Development says hitting a trillion dollars is an important milestone that will test Wall Street's reaction. If the financial markets begin to think there's a risk to the federal government being able to manage its debt bun and stock markets can be adversely affected as in higher borrowing rates slumping stocks and an economic slowdown. I'm Scott Tong for marketplace.

Coming up next