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Has has voted to push back the nation's borrowing limited -- may nineteenth.
Even implementing a no deal no pay policy for both chambers of congress.
Prior to that vote former -- reserve vice chairman Alan Blinder said the debt ceiling was scarier than the fiscal -- so.
Does this still hold true and how does he think the US can decrease its deficit Alan Blinder.
Is here with a -- deficit and its debt.
Good to see professor thank you for coming at -- is the debt ceiling issue resolved in anyway -- is just -- -- over it's not resolved but the so.
I'd rather have -- hanging in May even in February -- lot job but but hey did you say in your article on Wall Street -- was written I think was written just at the time that they voted.
That compromise should not be a dirty word and and we know where -- the president wants the Republicans to compromise and some people say they did it at least a bit on the on the tax.
Issue but what about the president compromising on spending so far have we seen any evidence that he has been willing to compromise fixing so first of all -- have been too.
-- deficit reduction plans before this last tax increase that -- all spending.
So that was one secondly as you know back in the good off -- the -- old days.
When Boehner and the president were trying to strike a grand bargain.
He was putting Social Security on the table even though lot lot of people in his party weren't too keen about that they don't get is you know we hear.
Out spending cuts when we look at spending and input if we could put up the chart of that we have a spending from 2008.
To 2009 right up until 2012.
We see that big increase of about 600 billion dollars that was because.
Of that special stimulus -- but then we see the level.
About the same money in the stimulus never stopped we hear a lot of talk about oh yeah in the future we're gonna have a spending plan to cut spending.
But the actual spending has not read -- we should mention by or -- -- with the Clinton administration when they really did the cut spending but what we're not seeing the actual cuts now.
Well we're seeing a little bit of -- you see it's come off the top and that there's more promise down the road and finally I mean.
To your main point really which is that there hasn't been enough -- -- yeah that's true.
-- has to music in total I'd actually not like to see it happen this year the economy still weak and -- federal spending by the way is falling.
That's taken some of the demand out of the economy.
At a I would like to see a lot more taken.
Soon but over the long haul over the next ten years not to mention 203040.
We need to take a lot of spending erect defenses balance sheets and by the way just we just got word its portfolio is top three trillion dollars.
For the first time does that too much.
No it's house like a lot of money because.
And for you and I don't mean much to much but as you know the Federal Reserve can print money.
And can buy as much as it thinks.
Is beneficial to the economy does not about the Fed's.
Given where interest rates are sort of stuck around zero.
Good the best way the Fed can think of now to stimulate the economy is to buy more assets shrink risk spreads and things like that that's what it's -- okay.
Now so far we haven't seen the consequences of this money burning in terms of inflation although some people would say that they're actually is inflation ways Calcutta but -- that is wrong because when I go to supermarket.
I do pay for.
But when it will we see some consequences for all -- all the money printing for that the huge debts that were never piling up at senator.
So so -- the money print the deaths are different thing the money printing if it works according to plan.
Next and -- things don't always work according to plan if it works according to plan you'll never see why.
Because as the economy starts getting back to normal with -- and almost 8% unemployment.
And demand comes back private sector demand comes back the Fed is gonna draw that balance sheet down.
It's gonna destroy.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- But it'll burn them off exactly and they and and it never will go into circulation.
Let's hope you're right professor I would wish your days were back when we had a divided.
Politics we had a Republican House and a president who's a Democrat but they seem to be at what compromise alike can we go there again why can we go back to that those days a good compromise.
You know if you rests on the Democrat as you probably know.
Life this problems on both parties but I think the Republican Party has been just unwilling to compromise now very recently.
They're showing some willing took us to compromise you know there's this compromise -- taxes I -- to tell you the -- size bag I see a lot of intransigence on the part of a lot of Democrats -- well this intransigence on both sides but compromise on taxes compromise on spending is necessary and look.
I was very happy to see the debt ceiling thing put back to may if not first professor Alan -- good to see you please come back -- his -- and thank you very much San.
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