Three Economists Walk Into a Discussion, Part 2
By David Henderson
I left with the issue of the federal deficit and debt.
35:30: Goolsbee doesn’t think we’ll be Greece. We have low income tax rates, no VAT, and better demographics.
He argues that tax rates on grandkids will need to he higher. He thinks we need immigration to offset the aging of the population.
DRH comment: I’m disappointed that neither Hassett nor Goolsbee discussed refinancing the debt to 10 to 30-year bonds, thus saving on a potential time bomb if interest rates rise by even 2 percentage points.
38:00: Goda says that the chance of kids today outearning their parents in the long run is less than for my generation outearning our parents.
39:00: Goda follows Goolsbee’s lead and turns to inequality.
39:45: Hassett talks about Trump’s opportunity zones and also notes Trump’s efforts on prison reform.
41:30: Hassett emphasizes that charter schools should not be curtailed.
42:00: Goda links the California fires and climate change. She doesn’t justify this.
42:30: Hassett emphasizes Trump’s “regulatory budget.” He also points out that Trump’s economists finally started including the deadweight loss from raising taxes to fund enforcement of regulation. (I think he confuses it by making a claim at first that even the cost of enforcing the regulations wasn’t included as a cost. That’s hard to believe.)
45:00: Goolsbee claims that Trump’s economists did cost/benefit analysis wrong. Hard to believe, but I don’t know.
47:30: Goda asks about trade.
48:00: Hassett points out that trade deals are thousands of lines and that he learned this from Goolsbee. Hassett says that trade deals were asymmetric in the past, with the U.S. conceding more than other countries. But this seems (to DRH) like a protectionist argument. “Conceding” to other countries presumably means dropping our tariffs and quota restrictions more than they drop theirs, so that our consumers gain more than their’s do.
50:30: Goolsbee says Trump’s approach is muscular declaration of trade wars with our allies: Canada, Mexico, Japan, Korea, Germany, the EU, and Australia. And with China.
52:25: Goolsbee surprises me by saying that the USMCA is better than NAFTA. For my view see “NAFTA 0.0,” Defining Ideas, December 20, 2019.
53:00: The U.S. is putting agriculture on the welfare payroll.
53:30: Hassett goes back to the asymmetry point.
54:40: Goda asks them to share their data, based on input from listeners.
55:10: Goda asks question from the audience about immigration. What’s the appropriate policy?
56:00: Hassett says that when he was in the White House, Jared Kushner and others put together a reform that would make U.S. immigration policy like Australia’s.
56:45: Goolsbee’s best moment. Without robust immigration, we’ll have problems with safety net (presumably Social Security and Medicare) due to baby boomers. Points out how actively hostile Trump is to legal immigration also.
58:40: “This is not the American way.” I could hug Goolsbee.
59:00: Goda asks about Biden’s tax policies.
To be continued in Part 3.