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-- -- So every investor is fretting over the Federal Reserve's next move.
Except one kept our next guest on yet another -- what are you know he's here Marshall are back and director of institutional wondered -- it.
At the institute for new economic thinking which to challenge what kind of sounds shady and of itself but the new economic thinking but that aside.
You know why do we what should we worry about if it's not tapering and Ben Bernanke like everybody else tells us we should be worried about.
Well it's it's plain and simple its fiscal policy ultimately.
If the government is withdrawing income from the economy.
That's -- -- much more contractually -- than anything that the pedal was there will be doing I think that's the most important cutting spending is bad.
Yes and I've said this like a broken record on the show many many times and you're probably sick of hearing it let them.
I know they say consistency is the -- -- them -- foolish look foolish my but I I I do believe that if you can -- I I think that's the most important thing out there right now the sequestration is just coming into effect right now.
And so I think you would see ongoing deterioration in the second half of this year regardless of what the Fed does with it's -- tapering program.
But if the Fed pulls back in this -- back to previous argument that we had that discussion it defended the bulls back.
And longer term interest rates continue to go higher yes that in turn will put more pressure on the federal government to pull back on spending yes -- -- No we had this discussion last time and and I was going to point that we ran out of time that time.
In the nineteen played 1970s we had.
20% interest rates and that didn't constrain spending as such I mean.
You can always spend operationally and remember that there is an income effects associated with those high rates as well so that as rates go higher as favorites such as pension -- people -- other recipients of Social Security payments.
Also our beneficiaries -- point has always been that -- Com or monetary policy in general has very very ambiguous effects -- it helps borrowers but it hurts aprons and took its attacks on savings and consumption.
We have to get I've never should stick to Brian Wesbury when marshals make his argument is who's just on the show Friday and again mental note and have the two -- together at some guy called me crazed keynesian -- I think I have had -- that -- that -- a -- -- decline economists though he is and he's he's office all the time and he made the exact opposite argument on Friday he was basically he's glass half full guys get your -- and an unknown economy in the stock market opening up.
But he thinks that if you you cut spending if -- regulations and that's what -- that's really what's hurting or.
Good yeah that's that's.
I had -- -- -- -- about that last week -- the the end of the day.
We we we didn't get hit pay and -- financial crash in in 2008 because we had to have too much regulation.
And and and too little spending we had a private sector credit bubble and we had -- massive amounts of financial deregulation which created huge since systemic -- Now we've got some attempt to re regulated though it's being -- every single day in the in in the financial sector.
But that the fact is that people on the in the private sector are still burdened with a substantial amount of private debt and private that is -- much more dangerous thing in public that in my opinion.
No one less thing though in this relates to do National Security Agency scandal the leak the problems -- IRS.
Do you think this a step back and look at all that's bigger government has a problem that we're having trouble as a nation made it.
Leaks who has some information what's going on with -- some critical agencies like -- -- do you think that that impacts.
What's going on in terms of debt spending in Washington there's more pressure at least to shrink government.
Well that -- that the depression becomes in the areas which cars yet it's too which are concerned with the surveillance -- to see that the military industrial -- say -- You know I mean what we're not spending money on on improving -- the the with the roads in New York City or improving bridges or improving our education system we're spending money on -- and he's taking.
I'm expanding by LA RS has been raising gas -- since the national and don't need to raise again we don't need to raise the gas tax you know we didn't raise the assets so Eisenhower to finance its highway program in the 1950s we we have a long tradition in this country.
To use in the state to do -- and get involved in these large infrastructure projects we stop doing that in the citizens say we've turned into a quasi police state because we -- -- -- -- money on -- on spying and other Americans so next time if we do get -- must credited it to you call each other names and maybe have a halfway I would never call anybody name on the soiled my mother always told -- to -- well the -- -- -- -- some sort of set -- That's up.
-- the -- name calling -- -- know Bryant tonight style I would never be -- to manage to Marshal the volatile thanks in Ottawa for our Mac bailout.
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