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you say that government spending another three plus trillion bucks is going to cause so much inflation that will hurt more than it helps can you explain that sure stephanie thanks for having me on um i need to back up a little bit uh if you go back to the spring of 2020 in the middle of the worst part of the pandemic the economy was in a black hole probably the most uncertain period i've ever seen in my lifetime and congress probably did the best you could ever see a government which is they spent 2.3 trillion dollars in response to that because none of us knew where we were headed it could be the great depression it could have been anything um thankfully fast forward five or six months and um we did not have a great depression uh it turns out we had the sharpest v recovery in history in fact the government confirmed i think it was yesterday that the recession is over and ended last summer um by early fall retail sales the 30-year trend in retail sales was actually above trend this took like five or six months in the great depression it took over 10 years in the great financial crisis post a housing bubble it took five years so this turned out to be a very different animal than the kind of economic periods we're talking about the best way i could draw an analog for you is think of think of a health crisis think of a heart attack and if you have a heart attack if you get the stand in in time the scent in this case being the congressional action in the vaccine you can go on with your wife and no further treatment is required um that's exactly what we had we did not have what we had in terms of the depression or the great financial crisis which i would say is more like cancer that's a long-term problem which requires long-term spending and long-term interventions if you look at the current situation after retail sales in the economy were back to trend afterward 575 of the 850 billion on transfer payments has been spent over half the 5.2 trillion we spent on coven again has been after the economic crisis was already over the irony is probably the worst economic declines we've had the last hundred years are post-asset bubbles like great depression the great financial crisis the other big economic problem we've had the last hundred years was the inflation in the 1970s it was pretty much awful period particularly for the poor in the middle class because as you know inflation is a tax the poor just can't afford nor can they avoid it um i have to say the irony of because this is well-intentioned spending you mentioned uh and i think it's to fix the problem frankly that does not exist anymore given what i just said if i was darth vader and i wanted to destroy the u.s economy i would actually do aggressive spending in the middle of an already hot economy which is exactly what we have um the reason is that creates two things yep i'm sorry that creates two things are the policies yes two things number one you usually get a bubble out of that and number two you could get inflation out of that frankly we have both this is the biggest bubble i've ever seen in my career we have crypto craze we have specs we have booming housing prices we have these things called nfts and equity prices of percent of gdp are an all-time high and as you also know inflation is literally at a 30-year high what are we going to get out of this and again it's well-intentioned spending in my opinion you're going to get a sugar high for three to six months then you're probably going to get continuation of inflation and then an economic bust and when you get an economic bust okay yeah but stan crypto currencies nfts spax if that blows up that's a problem problem for the rich what this infrastructure plan is trying to do is help the poor roads bridges wi-fi and rural areas i mean expanded child tax credit free pre-k this is going to help people who are struggling asset bubbles and cryptocurrencies don't mean anything to them let that blow up okay first of all it's not just the rich this time this is the first retail participation in this kind of nonsense that has happened in my career but let's take that aside it's not the cryptocurrencies blowing up they're going to hurt on the poor people it's that asset bubbles bursting inevitably lead to large economic declines it's the economic decline that's going to hurt the poor everything you just mentioned sounds great and if you can pay for it um without hurting the economy um i'm all for it but frankly there's a lot of things going on take pre-k all right pre-k i wish harlem children's own could do the whole country because they do it with great efficiency unfortunately that's not the case to scale it we need government and i'm okay with a program like that but take for example me i'm getting social security payments i'm pretty wealthy all right i don't need those payments there's a lot of other ways to pay for this and cut that out do we really think my social security payments are priority because if we don't think they're a priority let's cut them and you know there are a lot of other examples and then if you want to add stuff but right now further spending in aggregate in my opinion is going to cause a financial crisis is going to cause inflation and nothing is going to hurt the poor more than that and by the way if it does every dollar we're spending now that in my opinion we don't we don't desperately need it's not going to be available in a future crisis whether it's another pandemic or an economic decline that is hurting the poor in the middle class well absolutely nobody wants that but conventional wisdom is often more money is good for those who need it most you're saying that's not the case so how did joe manchin and the other senators react when you made this case i think they were very thoughtful i don't know whether how much i moved the needle or didn't move the needle but um we had a very nice frank discretion and frankly they asked great questions and they seemed very interested in my points i think frankly my record probably made an impression on them too so the takeaway you are all for a hard infrastructure deal you don't like that what is the prescription you're saying we need to do well i don't think we need to do anything i think we need to take a step back take a deep breath and see where we are we have a very hot economy and very hot inflation and any net spending in my opinion is a problem i realize that's not realistic so yes i love a lot of stuff in the infrastructure plan particularly the the investments in in the digital in the digital infrastructure because we have a big digital divide so rural areas and poor kids have the same access to it as upper class kids there's a lot of stuff in there i'm okay with but again there's a lot of other spending going on particularly in entitlements that to me are less of a priority and we just can't let the net spending go up any more than it is currently because it's going to lead to you know hopefully i'm wrong i don't have a crystal ball to dire consequences
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