Jared Bernstein on Debt

Owing to a technical snafu, this transcript will b rougher than usual.

Transcript

PK So hi, everyone. Paul Krugman talking with Jared Bernstein, formerchief economist, head of the Council of Economic Advisors under Joe Biden. Before we get going: What are you doing now, Jared?

JB I’m a policy fellow at the Stanford Institute for Economic PolicyResearch. And that’s obviously in Palo Alto and the Center for AmericanProgress, which is in D.C. And I speak to you from Alexandria.

PK Yeah. I lived there briefly, 44 years ago, anyway. And the reason I wanted to talk with you is, you know, there’s a lot of headlines now about debt. There’s interest rates, particularly at the long end are way up. You and Ihave both been substacking about it. And I think we mostly are on the same wavelength, but I’d like to go back and forth. I want to talk about some work that you’ve done, particularly with Bobby Kogan. So what’s your take right now? I mean, we had all these headlines about $40 trillion, or I guess I’m supposed to do that in a Dr. Evil voice: $40 trillion.

But what’s your take on what’s happening now? This is... It’s very different from the way we were talking about it a few years ago, but what’syour take?

JB Well, Paul, like you, for many years, I was pushing back on those whose hair was on fire about the urgency of the federal debt. I thought that that overheated. Everything was overheated and that as long as the growth rate surpassed the interest rate and we sort of kept our deficits within kind of a normal range, we could service our debt without breaking a sweat. But a few years ago, I began to become more hawkish and less dovish for a couple of reasons. One, the budget math became less favorable. The growth rate looked a lot closer to the interest rate and that was before this recent bump up in bond yields. But also, you know, I’ve been in government a lot lately and it looked to me like neither side really cared kind of much at all. The reaction function, as we say these days, a common phrase, seemed to be kind of dead in a way that I thought was problematic.

This is not a pox on both houses. And by the way, here’s an area where you and I may have slightly tinted different views. The Republicans’ tax cuts, and Bobby and I have done a lot of work on this, are public enemy number one here, exhibit A in terms of why we’re in the mess we’re in.

But, you know, Democrats have largely endorsed those tax cuts and, in my view, have done some irresponsible stuff too. So that’s kind of my first blush of where I think we are.

PK Okay. So before I get into all that, I do want to, for listeners, so you know and I know this, you’re talking about r-g, but that’s kind of an important point, right? Why do we think about interest and growth and debt? Lots of people out there saying, oh, look, the interest on the death is now so huge, but that’s not quite the whole story, but it’s closer to the story. Anyway, your version of it.

JB So a lot of this comes, at least for me, comes from paying a lot of attention to Olivier Blanchard’s work. He has kind of wedged into a lot of our heads this – and he’s not the first – but the notion that when the growth rate surpasses the interest rate, when the growth rate surpasses the rate of interest – It is possible to keep rolling over that debt and not get into a kind of a debt spiral because you’re generating enough growth and revenues and incomes to sustain. As soon as r is bigger … that’s not all the math. It depends on the size of your deficits as well. But broadly speaking, for many years, we had, you know, pretty good growth and pretty low interest rates. We can talk about how that growth was distributed. A lot of it didn’t reach working people, working class people. But the fact that growth rate was higher than the interest rate was one reason why I was less wound up about all this.

PK Yeah, one of my favorite things is, you know, how did we pay off thedebt from World War II? And the answer is we didn’t. That the debt when John F. Kennedy was elected was about the same as it had been on VJ Day in dollar terms, but it was just vastly smaller as a share of the economy because we outgrew it. And that’s kind of – as long as debt doesn’t rise relative to GDP, not a problem. And that says if the economy is growing and interest rates are not too high, not only don’t you have to pay off the debt, you can actually keep it growing as long as it just doesn’t grow too fast, right?

JB Exactly. So the problem we face is when our debt grows faster than our economy, the debt ratio or the debt to GDP just keeps going up and up and up, which is just what you said.

PK Yeah. And so there’s a – yeah. For, you know, through the Obama years,through the Biden, well, Biden was more complicated because we had the COVID expenses, but for, you know, basically for much of the period when everybody was going on and on about debt, the arithmetic there was actually pretty favorable, right?

JB Yeah. This is precisely why I kind of did a bit of a flip because – and I have an op-ed in The Times where I actually managed to actually get them to put a graph in, which they don’t always do in there, which portrays this problem.

It shows how the growth rate used to just reliably be well above the interest rate. So the dynamics you just described where the economy grows faster than the debt and so your debt to GDP ratio sort of glides along in a way that’s not particularly worrisome. Where that looks like it’s starting to flip and starting to change.

And then if you look at the CBO forecast, they actually have the interest rate on the debt falling below the growth rate numerous years out. And their estimates assume tariffs continue to generate a bunch of revenue, which doesn’t look to be the case.

They assume that some of the Trump tax cuts would fade, but now they’re permanent. So yeah, the budget math has gotten less comfortable.

PK Okay, and then I want to get to the interest rates in a minute, but the deficit that we’re running right now, it’s just incredibly large. I mean, it’s, you know, it used to be, I guess, that basically ran deficits to fight wars. And then we started to have big deficits when you had severe recessions. But now we have neither of, you know, there’s a war, but it’s not like World War II, right? It’s not free, but not 40% of GDP.

And yet, the deficit is something like 6% of GDP now, right?

JB Exactly. So it’s a little north of 6% of GDP. And according to the kind of numbers that I run on this, with the economy doing pretty well, the macro economy, I know, again, not reaching a lot of folks, affordability concerns loom large. But GDP is growing around trend, which is about 2% real. The unemployment rate is close to 4%, which is in the neighborhood of fullemployment. The stock market is booming. We should have a deficit that’s closer to 3% than 6%. And what’s happened here, Paul, again, you’ve writtenabout this extensively. Is that the just constant ratcheting down of tax policy, that is all those tax cuts introduced by Republicans, too often kept in place byDemocrats. Those tax cuts have really broken the linkage between solideconomic growth and revenue flows to the treasury. And what Bobby and I show is that if you take the Bush and the Trump tax cuts out of the mix, our fiscal scene would look fine. So, you know, that’s important. You know, what you can do is you can simulate what the debt ratio would be. By debt ratio, we mean debt to GDP or what the deficit would be, either one. Or what the interest payments on the deficit would be.

You can simulate those if you take the Bush and the Trump tax cuts out of the system. Which means taking them and their – not just the original cuts but all the following on legislation that made those cuts permanent.

One of the things when I say Democrats have played a role here: I was in the Obama administration when we essentially made permanent 80 percent of the Bush tax cuts. That’s not 100%. So I’m glad that we let at least 20% at the top end revert back to what they were. But that’s the exercise we did.

PK The blue line is projection for debt on current trajectory and up to the point where it gets dotted it’s the actual debt to GDP. And the orange line is if the Trump and … actually it’s really three rounds, right? It’s Bush. Which were very much tax cuts for the 1%. Then Trump won more tax cuts for the 1%.

And then Trump two, even more tax cuts. Not entirely for the 1%. But it really is. Where we are now is not at all where we would be if if we hadn’t had all of these tax cuts.

JB Yeah. And let me say something about this. First of all, I know you do alot of economic history, which is just really great work, in my opinion. And I just don’t want our viewers to not note that that graph started back in, I think, the late 1700s. So that’s some pretty good economic history there.

Remember, those figures, including the one that showed much lower, much more sustainable debt path, include all the spending that is in the system. Right. The tax cuts didn’t happen. And so this is important because there are always going to be people who say, you know, it’s all spending and it’s all taxes and, you know, that’s a common fight.

But that figure keeps the spending precisely where CBO says it is. So that’s not a judgment on whether we have the optimal amount of spending. We can argue about things that should be cut or expanded. But those are the numbers. Those are the facts.

PK Yeah. I mean, one of the things that strikes me about this is that often if we’re trying to understand what it would take to be able to pay for even what we have, that we would have to have something like European levels of taxation or something radically different.

And actually all we really need for that is Bill Clinton levels of taxation.

JB Precisely. Yeah. In fact, under the Clinton regime, we actually – it was last time we had a surplus, so that the debt to GDP was starting to come down, which is what happens when we have surplus. Now, a lot of that had to do with a big bump in capital gains and that led to more revenue flows. But that’s precisely the channel that I think we’ve shutdown with these tax cuts – this endless ratcheting down of tax policy.

PK Yeah, it’s an amazing thing and it’s – you and I both remember the 90s and I didn’t feel that we were living in a regime of oppressive taxation that was stifling entrepreneurship. Those were the roaring 90s. So yeah.

JB No question. The extent to which the political class, particularlyRepublicans, has convinced so many people and so many media writers that taxes are always bad and must always be cut is one of the reasons we’re in this mess. Okay.

Now, clearly the deficit is so big because the – again, another round of tax cuts and the legacy of the past tax cuts but also the arithmetic.

PK Debt used to basically kind of melt away relative to GDP because of growth exceeding the interest rate. And that’s not the case anymore.

Although the gap is not that large even now, right? It’s sort of like a 4% average interest rate on federal debt and maybe 3% nominal growth, 3 to 3.5.But still, it’s very different now. But the thing that is really striking is that interest rates are way higher than they were not very long ago, especially, of course, at the long end. So I’m actually not fully sure myself what I think is happening, but why do you think interest rates have gone up so much?

JB Yeah. You know that old movie, I think it was called Murder on the Orient Express, where it turned out, spoiler alert, that they were looking for one perp, but there were like 17 perps. I think there’s a bunch of reasons. I would put at the top of the list that there are two very large demanders of credit right now in both the U.S. and other economies as well. Those are theAI build-out and all the picks and shovels therein. Those folks are now leveraged, meaning they’re borrowing somewhere between $600, $700 billion and a trillion this year.

I’ve seen plausible estimates that they’re going to borrow a trillion dollars. By the way, a lot of those AI companies used to invest using cash flow. They weren’t leveraging. They weren’t borrowing. Now they’re borrowing. And they’re borrowing hand over fist. And a lot of investors are confident about those returns.

I personally think it’s kind of bubbly. But they’re confident about those returns. So they’re certainly buying that debt. The other big competitor is the U.S. government and I just mentioned maybe those guys will borrow – maybe the AI bros will borrow a trillion this year. Well, we know that the U.S. government is going to borrow twice that, a little bit north of two trillion. That’s thing one.

Thing two or cause two is the Trump-induced inflation concerns. So look, if you think that the inflation is going to be high and sticky and you’re about to lock up some of your money for a while in a bond, you might want an inflation premium. To be compensated for higher expected inflation.

Then there’s the fact that Kevin Warsh has gotten off to a bit of a shaky start. And I think that’s spooking markets a bit.

And then there’s the fact that the country is being run by an orange maniac.And, you know, I think that is kind of a long-term risk premium that anyinvestor is concerned about and some foreign investors. Investors, which have often bought a lot of our debt, are saying, huh, maybe not so fast given the way this country is governed right now. So if you put those all together, to me, they tell a pretty compelling story.

PK I think I mostly agree with that, except I have a couple of questions on all of that. One is that this is global, right? Interest rates are up all around the advanced world. They’re more or less moving on parallel tracks in Germany with their famous slightly insane fiscal discipline and in Japan where we used to say nothing ever seemed to matter. And that’s a little hard to parse. I mean the AI boom is mostly here. And the orange maniac is only here.

JB He’d like to be elsewhere, but he’s only here right now. I think he spills over into some other places, but yes.

PK So, I mean, is there a kind of a common story?

JB I mean, it’s a great question. And I should have said, I don’t think anybody can explain 100% of this variance. But, you know, my R squared gets up there pretty good, I guess. But I think that... The problem is that the fiscal accounts of other countries are looking a little bit more like ours than they used to and that they also seem to be facing a borrowing crunch. I mean, Japan, as you just mentioned, would make our debt-to-GDP ratio look very, very tame because, of course, they’ve been north of 200 percent. And for years, nobody really thought that was too big a problem.

But I guess because of some of the global risks, you know, we have geopolitical dynamics. We have, you know, when energy is stuck in the Strait of Hormuz, that is a much bigger deal for Europe, for Japan. And so I would argue that the combination of geopolitical tensions and unbalanced fiscal accounts is probably pushing up long rates in other countries as well. But there’s probably more to it.

PK So I think you probably are looking at these two. We have a couple of financial indicators that are supposed to capture some of these risks. Breakeven, right? The U.S. government sells bonds that are supposedly protected against inflation and the spread between those and regular bonds should give you an indication of what the market, Mr. Market, thinks is going to happen to inflation. And that really isn’t showing anything, right? Right. And then there’s – Credit default swaps,which are, you know, although I wonder a little bit, that’s insurance that will pay out if a company defaults. And there are CDS on the United States government, although I always wonder a little bit what good is any contract if the U.S.government goes into default. But anyway, but those are just not flashing red at all.

JB Yeah, so, yeah, I can speak to that. There’s a couple of points here, one of which I think is very important that you made in your post, I think, this morning, and I’ve been trying to stress as well. And I really want to make sure we get into it.

But the first point is that, you know, a second ago I said, well, you know,there’s an inflation risk. I think that’s a pretty small part of the puzzle. I think it’s more on short-term than on long-term loans. And so, you know, where you really see the increase in, for example, the 30-year bond is in the inflation-protected version. And that tells you that it’s not just inflation. It’s just making the breakeven point a different way. And that tells you that there’s some nervousness about the long term prospects of the U.S. project.

And I guess the important thing that I wanted to nail here is that I think of this as much more of a slow burn than something that’s going to explode this week or next week. I don’t think the US is going to have a Liz Truss moment.

I’m referring to the case in the UK where creditors engaged in what’s called a sudden stop. They looked at her fiscal plan and said, that’s it. We’re out. We’re not going to invest in that country anymore. I don’t think that happens here for a variety of reasons that you and I can tick through.

But that doesn’t mean that everything’s fine and happy-dappy or we’re out of the woods. It’s more of a slow burn, this upward pressure on rates, which folds into affordability, mortgage, auto, credit card loans, and so on. That is a problem for American households and consumers and that is less of a what’s inflation going to be next week story and more of a higher for longer problem where rates look to me and to many others like they’re going to stay up for a while because these problems are structural.

PK There’s a lot of crisis talk, as there was, by the way, back in 2010 when there was really no problem at all. And my problem with that has always been, explain to me how that happens. You say people will go on a buyer strike and try to sell all of their U.S. government debt. And my question is always, and buy what?

I mean, it’s not like there’s an obvious place. I mean, even for Britain, the Liz Truss moment was much more sort of limited than people claim. And now it’s kind of – and for the U.S. as a whole, it’s not like Greece where people were demanding euros and the Greeks couldn’t print euros. But, yeah, but this – I steal everything from somebody. I often don’t remember. But somewhere it’s that we should be thinking about termites, not a tornado.

JB Yeah. And here’s why I think, by the way, Stravinsky apparently said, great composers steal, lesser composers borrow.

PK Okay. That’s a good one. Yeah.

JB And here’s why I think this is so important. And you and I have both been circling around this point. It’s very important for human welfare and not just American but for human welfare that the current thugs running the government be banished and held accountable. I’m sorry if that sounds partisan but I don’t think it is. And for that to happen, I remember the John Kasich platform, which is, you know, vote for me and I’ll lower the debt and the deficit. You know, we’ll all eat our spinach.

And I think that’s a mistake. I think it’s a mistake politically and I think it’s a mistake economically. As you wrote this morning, don’t panic. I agree with that. This is a problem, a structural problem. It’s not going away anytime soon.

But we can chip away at it with reversing some of the high-end tax cuts, which I think would be both progressive and send a signal to markets and investors that we’re actually back in the business of having a reaction function to our unsustainable path.

But first and foremost, we have to meet the very basic urgent needs of households that have been left behind for too long. Health care, child care, housing, energy costs. That to me is the first demand on fiscal policy. And so I think the fact that neither you or I see a pending sudden stop, credit stop crisis is important.

We could be wrong about that in which case we’ll have to reconfigure. But based on history, I think we still have time to get this right and we should do both. We should walk and chew gum.

PK OK. I’m actually going to – at the risk od delaying a moment until we get to what to do. There’s one thing that kind of bothers me intellectually, which was that during the era of low interest rates, we had a really good story, “secular stagnation,” which nobody knows what that means, but was that basically that largely because of low birth rate and stagnant working age population, that there was just going to be lots of savings, not enough places to spend it on. And that’s kind of what we thought had happened to Japan.

Six years ago, I would have been a full-on secular stagnation guy.And now we have whatever it is, 5.3% interest rates on the 30-year. Were we all wrong about that or did something really radically change?

JB Yeah. I think that we were over-torqueing or over-indexing a bit on a period where interest rates were uniquely low and we built a big story about secular stagnation that I sort of believed at the time.

But I look back now and I think that perhaps that wasn’t as believable as we thought. And I think what might have been happening instead was we just had what, you know, Ben Bernanke called a global savings glut. We had excess savings and there were a lot of reasons for that.

It doesn’t have to be lack of investment opportunities. A lot of it had to do with international imbalances, which, you know, you’ve written a lot about.And so these excess savings found their ways into U.S. treasuries because it was the safest debt you could buy and the U.S. looked like a going concern.

So a lot of those resources flowed here. And that glut of savings, again, often coming out of Asian trade surpluses, led to rates that were really quite depressed for a long time. But as those dynamics changed, I think the savings glut is in the rearview mirror and the dynamics are more like those we’re talking about today.

PK Yeah. One intellectual trap that I fall into, I think, far more often than I should is the lure of a beautiful model that seems to fit the facts for a while. And the secular stagnation model was lovely and it all fit together and there were the low interest rates so clear, and all of a sudden, well, you know, it wasn’t really that solidly grounded. The fact that a model seems to work for a while doesn’t necessarily mean that it is right.

JB Well, it may have been the right model for the time. And, you know,look, you’ve made a career and won a Nobel Prize for beautiful models. So Idon’t want to wave you off of that.

I think there’s another dynamic to this. See if this resonates with you. One of the foundational principles behind secular stagnation is the idea that there’s more savings than there are credible investments, places to put it. There’s just an absence of investment. And by the way, when Larry Summers raised this issue of secular stagnation, Ben Bernanke stood up. It was at this IMF conference and said, wait a second. There’s lots of places to invest.

And I’m not sure that was, you know, exactly right at the time. But it sure is not the case now. Right. And that’s the AI boom. So there’s this tremendous investment. There’s this tremendous investment opportunity going on now. Again, I think those guys are over their skis because there’s so much more investment than there is profitability right now that I have bubble worries and Ryan Cummings and I have written numerous pieces on this. Secular stagnation or the absence of investment to absorb the excess savings may have been a fact for a few years there. But as this new technology came along, as is often the case, you now have an investment absorption mechanism.

PK Right. And yeah, probably worth saying just going back that it’s not just that the – hyperscalers are borrowing money when they used to not have to, but also presumably before all of these sort of huge profits being generated off our social media addiction and all of that were effectively being parked in places where they could then be lent out. And now instead of pouring water into that pool, they’re drawing water out of it. And that kind of adds to this pressure.

So,hopefully, January 20th, I guess it’s the 20th always. Anyway, January 20th, President, name your fighter. and with majorities in both houses comes in. And aside from, yeah, we need to go after all of the legacy of corruption and all of that. But they’re going to come in in what It looks like it’s going to be a less forgiving financial environment than we might have hoped. What do you do?

JB Well, first of all, from your lips to God’s ears, as we used to say—If we find ourselves in that situation, I will be partying in the streets and not worrying about the interest rate, at least for a few days. But I’m sure you’re right. And it’s an important question and important framing of the question.

I think there’s a path forward though. First of all, yeah, you know, we should definitely hold the Trumpies accountable and in a big way. I’ve written about that and I think Trump proofing – we have to Trump proof our government because other authoritarians will come along. But if that’s all we do, we’refalling short.

We really have to attack the affordability agenda. And there I think we should look at not just Mamdani and some of the others on the left who are making delivering the absolute key plank of their political project. But so is Abigail Spanberger and Mikie Sherrill from the center. So it’s not just a left center thing.

It’s just about rejecting the status quo and delivering to American households who have been not just abandoned but abused for so long, especially under this administration. And in terms of the context of whatwe’re talking about now, how do you do that if you’re in a high-rate environment and you have this budget outlook?

Well, we have to reverse the high-end tax cuts. We have to close the tax gap. We have to fund the IRS enforcement mechanism because for every dollar you invest in IRS enforcement, you collect something like $9 or $10 in taxes that are currently being evaded almost exclusively from the top of the scale.

Closing the tax gap is a project that could yield $500, $600, $700 billion per year, per year.

PK Let me, by the way, explain again for listeners, the tax gap is a term of art. It’s not just hand-waving. It’s saying specifically that money that people owe that we’re not collecting because the IRS doesn’t have the resources.And it’s overwhelmingly very high-income people. And you’re saying, yeah, if it’s that big, I mean, that’s like 2% of GDP that you’re talking about.

JB Absolutely. There are proposals out there. I recently heard Natasha Sarin talk about this and she used, I think, that exact figure. There are proposals out there that could return us, that could get us closer to that – I’m colorblind, so I’m not sure what color it was.

But the Bobby Kogan in my line – I think it was green. That could get us closer back to that debt GDP line that’s much more sustainable and they rest largely– I don’t want to be too cute about this. A dollar spent on childcare is a dollarthat’s not available for debt reduction.

But what I don’t think we should do – maybe I’ll bet we’re aligned on this. What I really don’t think we should do is say we have to come in here and clean up the Republicans’ debt mess as like our first priority.

Anything we do that stops digging us into a deeper fiscal hole, even if we’re digging more slowly, or even better yet, stop digging, not necessarily filling, but stop digging, would be I think not only good fiscal policy, but probably welcomed by the markets as a sign that the congressional reaction function to the fiscal outlook isn’t dead.

PK I regret to inform you that the good debt scenario, if we hadn’t had all of these irresponsible tax cuts, I believe the line is orange, which is kind of an unfortunate choice given where we are. But anyway, I think youmay have partially answered my question.

When I look at the better, if we hadn’t had those tax cuts line, that would be great.If that was where we are, then well, I certainly wouldn’t be worrying at all about debt.

But while those tax cuts were very heavilytilted to the top — they were sort of something like 30 to 40 percent going to the 1 percent — still, reversing all of them would hit a number of people who at least think of themselves as middle class. And so the question is, what’s within the realm of the politically possible that we can actually do?

JB Yeah, great question. And I definitely have argued and tried to stress this a moment ago that the right place to start and to linger is at the top of the scale. I don’t think we should raise taxes on middle class or middle class adjacent people. I think they’re having a hard enough time already to And they don’t need an extra tax burden. But the extent to which income and wealth have accumulated at the top of the scale …,

I was going to ask you about this. I’m sure you’ve seen the factor share data showing that labor share I don’t think we – I don’t think we do have to get back to the orange line.

By the way, Danny Yegan has some nice papers on this saying that it’s – we can be really, really gradual about getting back to some version of fiscal responsibility. But we have to move in that direction. We sort of have to change the sign even if the magnitude is tiny.

PK Yeah. I think the post-World War II story is actually kind of helpful here because people were still – even I wasn’t born until eight years after that war was over. But people still for a while talked about how are we going to pay the national debt? How are we going to pay off the war debts?

And we never did. By sometime in the 60s, the debt was higher in dollar terms than it had been. But the trajectory of all of the ratios was down.

And we probably don’t even have to do that steep of descent, right?

JB Yeah. I mean, some people want to say that AI is going to save our bacon because it’s going to generate so much growth. And I’ve written about this. In fact, in the piece with Bobby, we have a section on it. And my view is kind of like hope for the best plan for the worst. Yeah.

PK I’m kind of stuck on the fact that the internetreally did eventually have a strong productivity impact and then it went away. It was only about 10 years of goodgrowth.

JB Yeah, exactly. And we kind of got back to where we were. So a lot ofthe AI productivity discussion assumes that not only will AI boost the level ofproductivity, but it’ll just keep getting better and better and better so that it improves the growth rate.

And, you know, I hope that’s true, but I certainly wouldn’t bet on it.

PK I wonder suddenly just what happens if I ask Claude, devise me a wayto evade most of my taxes. And it can probably do a better job at that than even a highly paid accountant.

JB So, oh, God. Don’t go there.

PK I wouldn’t. Among other things, I have absolutely no confidence that anything I ask Claude is private. But what are you hoping for in the spring of 2029 as our hypothetical virtuous government comes along?

JB Yeah. I am hoping for the following. I spend a fair amount of time scratching my aging noggin with the question of how much of the damage done by the Trump regime is temporary, can be quickly repaired, or is long term and will be with us for a while.

Again, name your president. I have names in mind. I won’t say them. If a good Democrat takes over and we have some legislative power, can we restore good relationships with him? So I guess what I’m hoping for and looking for is that the damage can be reversed, you know, in my lifetime which, you know, isn’t the longest span of years.

And, you know, that’s an open question.

Well, okay. What about you?

You answer that question.

PK Oh, yeah. It’s funny. When you ask me about the economics, can we restore, can we even significantly reverse the drift to oligarchy? I’m actually fairly optimistic that it’s within the realm of the doable. When it comes to our international relations, when it comes to our military credibility, I don’t know.

I think we’re talking about a generations-long project, and that really upsets me quite a lot. I mean, at some level, you know, I talk about the Iran or something like that, and I say, okay, you know, this is Trump’s failure, and we should wrap it around his neck. But in the end, it’s my country, too, and my God, we are not the country we were in the eyes of the world, and I don’t know when we ever will be again.

JB I agree with you, Paul, and I share that worry. I’ll only say the following.It may be a generational project, but if it is, it’s a great generational project,and generations should be anxious to undertake it.