Listen: Swanson, President And New York Times discussed on John Williams
"Days, and so looking at just the trade deficit in goods can be kind of a misleading. Practice is is what I'd like to say appreciate that one. Last thing for Swanson who writes about economics for the New York Times in her piece today is about this trade deficit. But you also mentioned the one point five trillion dollars tax cut that the president signed a little over a year ago. I have long worried that that was going to bite us in the. But can you just talk a little bit about the impact of the one point seven trillion dollars tax cut one and a half trillion dollar tax cut? We all got sure. Yeah. So the evidence is that that tax cut has provided a boost to the economy in the short term. It's clear that there is a long term economic boost from that because we're just not seeing much higher levels of investment from it. But it also as these figures are showing this week appears to have pushed up and trade deficit, and that's something that a lot of people did anticipate, and that's for a couple of reasons both because that tax cut did give Americans more money to spend. And when we spend we tend to buy more imported goods, the second reason is that it's also largely financed by government borrowing. So when the government borrows money that encourages capital, the slow into the United States from abroad and just the way, you know. Trade and investment flows work, basically, you know, when there's there's a dollar in. There has to be a dollar out and said that capital flying in from abroad results in a trade deficit. It's a little bit, you know, complicated in terms of macroeconomics, but all that money flowing industrial salt in this in this trade deficit, but I thought the terrorists were going to make it more expensive for imported goods say Chinese goods to come into the United States. And that was the president's plan to make us more competitive is that having an impact. So the terrorists do are starting to have some impact. And in some cases, you would see, you know, people have a higher price for Chinese goods and choose to purchase American-made goods instead. But you know, it it also seems to have other kind of more paradoxical effects as well. So they care if you know, there's some evidence that these actually have heard the Chinese economy and the Chinese economy is slowing. I'm you might say to yourself. You know, what's the problem with that? But that in turn may have lowered American exports Kikinda. So, you know, everything is kind of interlinked if you try to offset others Chinese purchases and direct them to American purchases, you might end up reducing American experts China as well and from the data it does look like there is some of that going on. You know, the number that scares me, the most these days is the what's the debt now is fourteen trillion dollars or something like that. And we're adding onto that and if the tax cuts don't generate enough new tax revenue to begin to whittle away at that here. Here we go again, but just passing this enormous burden on our kids and grandkids. You know? Yeah. The. The has ended deficit has grown quite a lot and this tax cut is no doubt a major contributor to that. You know, finance largely by borrowing. So is this reverse like is this is this the way Democrats always play the game? I thought this was the Republicans play the game. I thought this is what Democrats did you know that? That's right. It is kind of flipping the politics of debt on its head. I mean for so long Republicans are the party of fiscal responsibility. And we really haven't seen that in the last couple of years in Washington, we have seen the reverse of that. Last question is this Reaganomics version of how to attack a debt? Oh, you mean by like supply-side economics or bike out of your that? Those arguments are definitely coming back around, you know, and I think that a lot of economists have criticisms about that. I mean, you know, you obviously today and the economy you're seeing that boost to growth in the tax cuts. But is it big enough to offset the cost of that borrowing? It looks like no not not by a launch. It's real interesting piece with some easy to digest numbers on a Swanson's pieces in the New York Times today, she's the trade and international economics reported or they're on. It's nice to talk to you. Thanks for your time today."