On this episode of Newsworld. On Thursday, January nineteenth, the US Treasury Department announced the United States has reached its debt limit and they would begin a series of accounting measures to keep the United States from breaching its borrowing cap. Treasury Secretary Janet Yellen sent a letter of Congressional leadership about the dead limits, saying quote, Dear mister Speaker, I write to keep you apprized of actions the Treasury Department is taking in regard to the deadloment. In my letter of January thirteenth, twenty twenty three, I noted that Public Law one seventeen seventy three increased the statutory debt limit to a level of thirty one point three eight one trillion dollars, and inform you the beginning on January nineteenth, the outstanding debt of the United States was projected to reach the statutory limit. This letter serves to notify you, pursuant to five USC. Eighty three forty eight one two of the extraordinary measures Treasury began using today. She concludes by saying, quote, I respectfully urged Congress to act promptly to protect the full faith and credit of the United States. So as we approached the debt ceiling debate, I felt strongly it's important we know the history of our national debt, how we got to thirty one point three trillion dollars of national debts to day, and what we should be doing about it. So I'm really pleased to welcome back my guest, Thomas Hunting. He is the former vice chairman of the Federal Deposit Insurance Corporation, former president and CEO of the Federal Reserve Bank of Kansas City. He was with the Federal Reserve for thirty eight years. He is currently a Distinguished Senior Fellow at the Macadis Center at George Mason University. Tom, welcome back, and thank thank you for joining me again on News World. Thank you for having me. It's good to be back, and interesting topic. As I'll say, you know so much more about this than I do. That I'm really grateful because I think all of our listeners will find this to be a very informative an educational conversation. So could you start with sort of a history of the national debt? Well, it's pretty straightforward. The Congress allocates spending, the Executive branch signs the bill, and we have a new spending bill, and it's more than the revenues that will generate through their tax program and deficit results, and the deficit has to be funded. Now traditionally, when you do that, you have to go to the private sector and borrow those funds, and that puts up with pressure on interest rates as you take resources from the private sector, and that causes the public and everyone to become to realize that debt isn't free, and therefore you have to find ways to address it going forward in terms of whether you're going to watch your spending and or your tax system. What I think has happened actually even before the pandemic over the last more than a decade, because in twenty seven, twenty eight, twenty nine, the deficit in the United States was roughly let's say, ten or eleven trillion dollars. Now we're at thirty one point three eight one trillion dollars. You know that something has gone out. And that's something I think is any kind of external discipline on the government, the House, the Senate, and the administration to kind of watch the spending and watch the revenues to make sure there's some balance there. I understand deficits are sometimes necessary, but in the long term you need to address those to make sure they don't get out of hand. And the absence of discipline is there is no longer an external standard in terms of the demand for our debt. We are the reserve currency, so it's allowed us to issue this debt globally. The monetary policy authority has kept the borrowing costs so attractive that the government has felt very free to borrow more money, and it has and the Congress itself, and I mean both parties. If the Democrats want to spend more money, and though they can't get tax increases, they spend it anyway. The Republicans do not want tax increases and can't stop the spending increases, or won't you end up with ever greater taxes. Plus two thirds of the spending budget is in entitlements, which are indexed to inflation. They're mandatory spending their index, so the spending is going to grow. If you're going to address this issue long term, you have to come to some kind of a solution that limits the spending program going forward, or ties taxes to better control of spending. Something. I think you know that because you were a leader, and now I think the pay go system that puts some discipline back in the thing, that's shorter thing we need going forward. In my opinion, I was very proud of the fact that a speaker, I launched the effort that led to the only four consecutive balanced budgets in your lifetime. And actually when I left office, Alan greenspan is sharing the FED. You may remember I actually had a working group trying to figure out if we paid off the federal debt, how would they manage the money supply. That seems so weird today. I have to tell you this. I remember that I was on the FMC at the time and I kind of chuckled because I said, you know, this is wonderful that we have this situation, but it's not going to last. It didn't. No, it didn't. But you know, the only time I think we've ever fully paid off the national debt was Andrew Jackson, and there was a brief parade, there was no money, and he actually took the surplus and gave it out to the undebted states. But that also created a certain level of instability. It's a very complex story. One of the things I think people don't fully yet is you know the death ceiling was raised seven times under Obama, was raised seven times under George W. Bush. The process of raising it, as I understand it, historically, prior to about nineteen seventeen, Congress would literally have to authorize each bond issue, and they decided that was too big a pain, so they went to a death seal and control model, which we've now had with us for over one hundred years. I think one of the things people get confused by is, let's say that Secretary Yelling is right. She said, Basically, they technically crossed the line last week. But they can manage the cash flow, and they can manage the way in which bills come due, probably up through sometime in June, without technically having a problem. What would the real world consequences be if the United States was unable to find a solution, Well, I think it'd be pretty dramatic because number one, people don't understand, so that means it's clear in people's minds that the government would not pay interest on its debt held globally, not only domestically, so that would bring uncertainty forward. Also, you have to borrow to pay your millions of government employees, So that would be a question mark, and I think all that uncertainty would undermine the economy. If we are in danger of a recession, that might actually make it deeper. So I think there aren't serious consequences from failing to increase if the US actually technically defaulted, that it was unable to pay the bonds as they rolled over, which is something you've seen Argentine to do several times in other countries. But given the size of our economy and the role of the dollar worldwide, how big a shock to the world fiscal system would an American default be. It's hard to say, I guess, but in the sense it would be significant because it is the global reserve currency, and that currency is, shall we say, supported by the fact that everyone knows it is a reliable debt out there and the US can in fact fund it even if it has to borrow more. And if you take that away, people say, well what do I do next? And uncertaintly undermines economic systems in the US. But because we are the reserve currency, I think more broadly, so I think it is a serious issue, and I don't think waiting until you have up against a debt ceiling is any way to manage the responsibility of an international reserve currency. So the Congress, both parties have to come and say, we can't go on like this. We've got to get this thing worked out. And I do think it's a little bit like calling wolf. Now, we've done it so many times, like you said, seven times under Obama, seven times under Bush. I've seen standoffs before. We've had temporary shutdowns, and then you open it up again and people say, well, it'll be okay. So what everyone expects is that there'll be a lot of yelling and streaming over the next six months, and that there will be some kind of a compromise that will come forward and that we will go forward. That's there's sumpsh people are operating on although they're not quite sure, and the less sure they become that then the more I think risk there is to the domestic economy and to the global economy. Just to make it clear for our listeners, isn't it true that being the world's reserve currency is an enormous economic advantage of United States? Absolutely? When the pound was the world reserve currency, it gave Britain enormous leverage and now we've had for over a half century all the advantages of being the safest place in the world, which is why my daughter, who lives in Key, Biscaine, sees an amazing number of Latin Americans who it's a flight to safety. I mean, they trust the United States when they don't trust necessarily their local government. And so it pours capital into the US in a way that I think we don't fully appreciate. So in a sense, if we could work backward, we have to find a way to solve this, and not solving it is not an option. It's not an option, and for us in the long run, it's absolutely critical because you can print money, and that's basically what we're doing here. You can print money until you've actually debatched your currency, and then what do you do. It's not something that happens tomorrow. It takes decades perhaps, but just think about it. I mean, we've increased our debt and therefore the amount of money from ten trillion to thirty one trillion dollars in a little more than a decade. If we continue at that rate, you are inviting inflation, you are inviting loss of confidence in your currency. Now, our advantage also is the rest of the world is managing as poorly as we are, and therefore it still makes us kind of what I call grading on the curve, still keeps us a preferred currency, but you can't assume that in reportuity and be a world class economy. I think there is a point where in the dollar worldwide, literally in twenty one hundred dollar bill units, is a sort of an invisible currency and virtually every country in the world. But that's because they actually think it'll be worth a dollar. And yet when you start getting seven eight nine percent inflation, you literally are basically cheating the people who are holding the money. Not only that, when you get percent inflation, you're cheating the world that holds it. You're cheating your own citizens who hold and you're taxing your citizens. So it's a very irresponsible path to be on, I think. And you know the other community is it picks up its own momentum. We are index two thirds of our government to inflation, so that means debt has to go up. How are you going to fund it? Secondly, the interest on the debt has to go up, and as interest rates are rising, it's going to go up extremely rapidly, So that's going to cause greater pressures going forward. And where's this money going to come from? More printy, and that's where you get yourself in this vicious cycle. And I think you decrease the value of your currency over time to a point where it becomes less of a sought aft international currency. Now again, takes time, but we're working on it. Well. Yeah, I mean, Congressional Budget Office has been warning since I think twenty fourteen that the current spending cycles unsustainable and we'll cripple the economy and lower the standards of living. They're absolutely right. I mean, we're increasing our carried so rapidly that we will in fact slow Here's one of my concerns. The feeder reserve has to walk away from this themselves. They have to provide some discipline. They have been monetizing this debt for some time now. That's allowed the government to fund this at very low rates. That cannot continue. People have to realize this coming out of their pocket so that we don't just spend openly and freely. We know there has to be consequences to it, and we've got to learn that sooner or rather than later. What my point was going to be when you realize it, and then not too distant future. At the way we're going paying interest on the debt will be larger than the defense budget. Absolutely, So we'll be taxing our children and grandchildren not to pay off the debt, but just to pay interest every year. Think about it. You have to pay let's just say roughly four hundred billion dollars. Soon our injuries on the day will be over eight hundred billion dollars. And if we keep accumulating, and it looks like we will trillion dollars of new deficits every year, we're going to be paying on interest a trillion dollars and it will exceed the defense budget and other discretionary items. The big part of that will be then entitlement program will balloon. We are on a very dangerous path, in my opinion. Part of the fight that she is going to be between those who are willing to raise the debt ceiling if there are reforms on spending, and those who are demanding that the deat sailing be raised with no reforms. I have a hunch that the next month or two that's going to be the central debate. I think. So it's going to be fingerpointing for the next month or two. You have to raise it. And the truth is they are going to have to raise the ceiling because the money is committed. I mean, the debates that took place in December over increasing both defense and non defense discriptionary items was the debate that's said, are we going to spend ever more money? Understandably important debate and the agreement was yes, we are. So now we know that that and they knew that that would be exceeded, that ceiling would be exceeded, and now we're in that situation. So you've agreed to spend it, you're spending it, and now you have to fund it. And the discussion and I think it is, okay, how do we re establish some kind of discipline around future spending that obviates the need to have these frequent debt ceiling increases? And some people say, well, just remove it, and that is an option, but at the same time, I'm not sure that would provide any additional discipline to the spending side, So that has to be thought through. President Biden has a non negotiation kind of an initial stance, but since he actually negotiated in twenty eleven on the death ceiling. I'm not so sure that this isn't sort of the opening round rather than the final argument, because I don't think he can get it out of the house without very substantial changes. Well, I certainly hope it's the first, shall we say, salvo over the field, and I hope both sides are saying, we're going to see how we get to a compromise. But both sides realize that they have to get to a compromise the past not being able to do that because the debt's going to only increase. It's indexed, it's going to increase. So how do you not only raise it, but how do you get a mechanism to keep it from going without some kind of paygo, some kind of discipline around our spending. And if we want to do tax decreases, how we do it, how we pay for it that whichever view you have, and I think there are important differences there. But how you're going to negotiate through that, I think has to be figured out now. And this saying well, we're not going to talk to you, this is it. It won't work, and the American people will suffer, and so will every international position. I wonder if this is a pretty good time to start raising the point of we ought to get on a track that would move us towards a balanced budget and start thinking through what the reforms would have to be in order to have a government we could actually afford. Does that seem too pie in the sky to I hope not, because it's essential. I mean, it's absolutely essential we begin to do that again. Let me just tell you that brought some meaningful discipline agreed upon and helped us address the deficits, and we came towards a balanced budget. If you think of the pandemic bail shall we say, crisis management. In terms of the spending, there were transfer payments not just to those who were unemployed, but the people who were well employed that we're receiving monthly checks. Our excess savings, that is, savings above the long term average increased over two and a half trillion dollars. So what we did is we said, well, this money is free, we want to make sure we stimulate the economy. We'll put all this money out even to people who are working. So there was the absence of discipline made the ability to spend I think irresponsibly more easy, and you have to take that out of it. You have to take that out first, and then you have to bring greater stability into how we spend our money. It's not free. It takes resources, it transfers resources. It does disincent people from doing tasks they might do had they not had the transfer payment brought to them. This is the time to seriously think responsibly about how we put more people back into the labor market, how we discipline our spending, how we pay for our spending. These are things that I think have fallen by the wayside and need to be brought back sooner rather than later, or I think we undermine this wonderful economy in the long term. And the America's New Majority Project that we've been working where we've done a lot of focus groups, a lot of Paul's about seventy six percent support for having a work requirement if you get money. We found when we did that in nineteen ninety six on welfare, people just streamed into the private sector market and got off of welfare because if they're actually going to have to do something for it, that I might as well go get a job. And I think there are fourteen or sixteen states now where the amount they subsidize is so great that you lose money if you go to work, which is crazy. I'm aware of those studies, and I think it is crazy. I think it undermines your ability to produce. As a nation. We have ten million jobs and six million job seekers. I don't think we've been out to balance that bad in my memory, that's for sure. So why don't we think about that in terms of the supply of labor and what's keeping that supply from increasing. Is it really that we don't have laborers, or is it that we have incentives that keep labor on the sidelines at least it deserves. There's a lot of attention buying the Congress of the United States. They've been five members already who have proposed balanced budget amendments. Representing Scott Perry, I think is a very interesting one which he called proposing a balanced budget Amendment to the Constitution, requiring that each agency and department's funding is justified, and he goes through how he would require us to get to a balanced budget and what we do. Brian Fitzpatrick from Pennsylvania also introduced a resolution called proposing an Amendment to the Constitution United States to provide for balanced budgets. Representative Derek Van Orden from Wisconsin introduced a similar resolution, and Representative Jay Obernotte from California introduced a resolution. Representing Zach Nunn from Iowa introduced a resolution. So you're beginning to see across the whole country. Members step forward and say, you know, let's have a debate about whether or not we're going to reform the government and get back to actually paying our own way rather borrowing from our children and grandchildren. And I think this may become one of the biggest issues in this Congress by the time the debate really gets ruling. They need to be introduced, and they need to be discussed, and they need to be debated. And even if you don't get balanced budget amendment, you get the discussion out there and perhaps you get legislation that again, like your period says wait a minute, we've got to get this plan together and we've got to bring our budget back into balance. You know, there are always exceptions, But here's the difficulty. I understand the exceptions. I mean wartime, yes, the pandemic for part of it, but it becomes a what I call the entry point into forever subsidies from the government, forever payments, transfer payments that you can't back out of because there's no rule that says, wait a minute, you've got to balance the budget within certain time period, or if you're going to increase the spending, you've got to cut back here. You've got to bring those rules back, or I think we are going to be having these standoffs again in two or three years when the next ceiling is broken, and it will be unless you have some kind of bind around the spending and taxing of the United States. Within the United States, when we sent out to balance the budget, we deliberately sidestep Social Security because we knew how the left would use it and we knew we couldn't sustain it. Margaret Thatcher and all the privatizations she did, never touched the National Health Service for the same reason. There are certain things you can't do. But we were able to reform Medicare in a presidential election year with AARPS support, And part of the reason was we convinced everybody how serious we were, and everybody said, you know, if everybody's going to give a little, I guess I've got to get so you create a totally different psychological environment for this kind of conversation. Absolutely, you have to have shared sacrifice. I call it. You know it's important, like you say, for your children and grandchildren. You know you have to do these things. So let's get started doing it and do it in a way that we all have confidence we're sharing in this adjustment. And you get that by talking to one another and knowing that is in the Congress. Instead of saying your bad we know we have this issue. We've got to find a way to do exactly what you're saying and sounds naive. Without that, I don't know how you're going to get there. It's like any family. I mean, you've got the family has to be engaged. The family has to feel like, hey, this is important to all of us, and I'm going to do my share exactly right. Otherwise it doesn't work. Otherwise it doesn't work and falls apartment. I want to thank you for joining me. I think, well, here, how hopefully our listeners have gained a better understanding both of the national debt, the gradual problem we're sliding into the debt ceiling, and the conversation we all need to have to use the debt ceiling as an opportunity to start turning the corner on runaway spending. It's always great to have you. You're so knowledgeable and have such a solid background. I want to thank you again for joining me on news world and sharing with us. Thank you for having me, good to be with you. Thank you to my guests Thomas Hunting. You can learn more about the death sailing debate on our show page at newtsworld dot com. Newts World is produced by gingwishtree sixty and iHeartMedia. Our executive producer is Garnsey Sloan, our producer is Rebecca Howe, and our researcher is Rachel Peterson. The our work for the show was created by Steve Penley. Special thanks to the team at Gingwish three sixty. If you've been enjoying Newtsworld, I hope you'll go to Apple Podcast and both rate us with five stars and give us a review so others can learn what it's all about. Right now, listeners of Newtsworld can sign up from my three free weekly columns at gingwistre sixty dot com slash newsletter. I'm Newt Gingrich. This is Newtsworld

On this episode of Newsworld. On Thursday, January nineteenth, the US Treasury Department announced the United States has reached its debt limit and they would begin a series of accounting measures to keep the United States from breaching its borrowing cap. Treasury Secretary Janet Yellen sent a letter of Congressional leadership about the dead limits, saying quote, Dear mister Speaker, I write to keep you apprized of actions the Treasury Department is taking in regard to the deadloment. In my letter of January thirteenth, twenty twenty three, I noted that Public Law one seventeen seventy three increased the statutory debt limit to a level of thirty one point three eight one trillion dollars, and inform you the beginning on January nineteenth, the outstanding debt of the United States was projected to reach the statutory limit. This letter serves to notify you, pursuant to five USC. Eighty three forty eight one two of the extraordinary measures Treasury began using today. She concludes by saying, quote, I respectfully urged Congress to act promptly to protect the full faith and credit of the United States. So as we approached the debt ceiling debate, I felt strongly it's important we know the history of our national debt, how we got to thirty one point three trillion dollars of national debts to day, and what we should be doing about it. So I'm really pleased to welcome back my guest, Thomas Hunting. He is the former vice chairman of the Federal Deposit Insurance Corporation, former president and CEO of the Federal Reserve Bank of Kansas City. He was with the Federal Reserve for thirty eight years. He is currently a Distinguished Senior Fellow at the Macadis Center at George Mason University. Tom, welcome back, and thank thank you for joining me again on News World. Thank you for having me. It's good to be back, and interesting topic. As I'll say, you know so much more about this than I do. That I'm really grateful because I think all of our listeners will find this to be a very informative an educational conversation. So could you start with sort of a history of the national debt? Well, it's pretty straightforward. The Congress allocates spending, the Executive branch signs the bill, and we have a new spending bill, and it's more than the revenues that will generate through their tax program and deficit results, and the deficit has to be funded. Now traditionally, when you do that, you have to go to the private sector and borrow those funds, and that puts up with pressure on interest rates as you take resources from the private sector, and that causes the public and everyone to become to realize that debt isn't free, and therefore you have to find ways to address it going forward in terms of whether you're going to watch your spending and or your tax system. What I think has happened actually even before the pandemic over the last more than a decade, because in twenty seven, twenty eight, twenty nine, the deficit in the United States was roughly let's say, ten or eleven trillion dollars. Now we're at thirty one point three eight one trillion dollars. You know that something has gone out. And that's something I think is any kind of external discipline on the government, the House, the Senate, and the administration to kind of watch the spending and watch the revenues to make sure there's some balance there. I understand deficits are sometimes necessary, but in the long term you need to address those to make sure they don't get out of hand. And the absence of discipline is there is no longer an external standard in terms of the demand for our debt. We are the reserve currency, so it's allowed us to issue this debt globally. The monetary policy authority has kept the borrowing costs so attractive that the government has felt very free to borrow more money, and it has and the Congress itself, and I mean both parties. If the Democrats want to spend more money, and though they can't get tax increases, they spend it anyway. The Republicans do not want tax increases and can't stop the spending increases, or won't you end up with ever greater taxes. Plus two thirds of the spending budget is in entitlements, which are indexed to inflation. They're mandatory spending their index, so the spending is going to grow. If you're going to address this issue long term, you have to come to some kind of a solution that limits the spending program going forward, or ties taxes to better control of spending. Something. I think you know that because you were a leader, and now I think the pay go system that puts some discipline back in the thing, that's shorter thing we need going forward. In my opinion, I was very proud of the fact that a speaker, I launched the effort that led to the only four consecutive balanced budgets in your lifetime. And actually when I left office, Alan greenspan is sharing the FED. You may remember I actually had a working group trying to figure out if we paid off the federal debt, how would they manage the money supply. That seems so weird today. I have to tell you this. I remember that I was on the FMC at the time and I kind of chuckled because I said, you know, this is wonderful that we have this situation, but it's not going to last. It didn't. No, it didn't. But you know, the only time I think we've ever fully paid off the national debt was Andrew Jackson, and there was a brief parade, there was no money, and he actually took the surplus and gave it out to the undebted states. But that also created a certain level of instability. It's a very complex story. One of the things I think people don't fully yet is you know the death ceiling was raised seven times under Obama, was raised seven times under George W. Bush. The process of raising it, as I understand it, historically, prior to about nineteen seventeen, Congress would literally have to authorize each bond issue, and they decided that was too big a pain, so they went to a death seal and control model, which we've now had with us for over one hundred years. I think one of the things people get confused by is, let's say that Secretary Yelling is right. She said, Basically, they technically crossed the line last week. But they can manage the cash flow, and they can manage the way in which bills come due, probably up through sometime in June, without technically having a problem. What would the real world consequences be if the United States was unable to find a solution, Well, I think it'd be pretty dramatic because number one, people don't understand, so that means it's clear in people's minds that the government would not pay interest on its debt held globally, not only domestically, so that would bring uncertainty forward. Also, you have to borrow to pay your millions of government employees, So that would be a question mark, and I think all that uncertainty would undermine the economy. If we are in danger of a recession, that might actually make it deeper. So I think there aren't serious consequences from failing to increase if the US actually technically defaulted, that it was unable to pay the bonds as they rolled over, which is something you've seen Argentine to do several times in other countries. But given the size of our economy and the role of the dollar worldwide, how big a shock to the world fiscal system would an American default be. It's hard to say, I guess, but in the sense it would be significant because it is the global reserve currency, and that currency is, shall we say, supported by the fact that everyone knows it is a reliable debt out there and the US can in fact fund it even if it has to borrow more. And if you take that away, people say, well what do I do next? And uncertaintly undermines economic systems in the US. But because we are the reserve currency, I think more broadly, so I think it is a serious issue, and I don't think waiting until you have up against a debt ceiling is any way to manage the responsibility of an international reserve currency. So the Congress, both parties have to come and say, we can't go on like this. We've got to get this thing worked out. And I do think it's a little bit like calling wolf. Now, we've done it so many times, like you said, seven times under Obama, seven times under Bush. I've seen standoffs before. We've had temporary shutdowns, and then you open it up again and people say, well, it'll be okay. So what everyone expects is that there'll be a lot of yelling and streaming over the next six months, and that there will be some kind of a compromise that will come forward and that we will go forward. That's there's sumpsh people are operating on although they're not quite sure, and the less sure they become that then the more I think risk there is to the domestic economy and to the global economy. Just to make it clear for our listeners, isn't it true that being the world's reserve currency is an enormous economic advantage of United States? Absolutely? When the pound was the world reserve currency, it gave Britain enormous leverage and now we've had for over a half century all the advantages of being the safest place in the world, which is why my daughter, who lives in Key, Biscaine, sees an amazing number of Latin Americans who it's a flight to safety. I mean, they trust the United States when they don't trust necessarily their local government. And so it pours capital into the US in a way that I think we don't fully appreciate. So in a sense, if we could work backward, we have to find a way to solve this, and not solving it is not an option. It's not an option, and for us in the long run, it's absolutely critical because you can print money, and that's basically what we're doing here. You can print money until you've actually debatched your currency, and then what do you do. It's not something that happens tomorrow. It takes decades perhaps, but just think about it. I mean, we've increased our debt and therefore the amount of money from ten trillion to thirty one trillion dollars in a little more than a decade. If we continue at that rate, you are inviting inflation, you are inviting loss of confidence in your currency. Now, our advantage also is the rest of the world is managing as poorly as we are, and therefore it still makes us kind of what I call grading on the curve, still keeps us a preferred currency, but you can't assume that in reportuity and be a world class economy. I think there is a point where in the dollar worldwide, literally in twenty one hundred dollar bill units, is a sort of an invisible currency and virtually every country in the world. But that's because they actually think it'll be worth a dollar. And yet when you start getting seven eight nine percent inflation, you literally are basically cheating the people who are holding the money. Not only that, when you get percent inflation, you're cheating the world that holds it. You're cheating your own citizens who hold and you're taxing your citizens. So it's a very irresponsible path to be on, I think. And you know the other community is it picks up its own momentum. We are index two thirds of our government to inflation, so that means debt has to go up. How are you going to fund it? Secondly, the interest on the debt has to go up, and as interest rates are rising, it's going to go up extremely rapidly, So that's going to cause greater pressures going forward. And where's this money going to come from? More printy, and that's where you get yourself in this vicious cycle. And I think you decrease the value of your currency over time to a point where it becomes less of a sought aft international currency. Now again, takes time, but we're working on it. Well. Yeah, I mean, Congressional Budget Office has been warning since I think twenty fourteen that the current spending cycles unsustainable and we'll cripple the economy and lower the standards of living. They're absolutely right. I mean, we're increasing our carried so rapidly that we will in fact slow Here's one of my concerns. The feeder reserve has to walk away from this themselves. They have to provide some discipline. They have been monetizing this debt for some time now. That's allowed the government to fund this at very low rates. That cannot continue. People have to realize this coming out of their pocket so that we don't just spend openly and freely. We know there has to be consequences to it, and we've got to learn that sooner or rather than later. What my point was going to be when you realize it, and then not too distant future. At the way we're going paying interest on the debt will be larger than the defense budget. Absolutely, So we'll be taxing our children and grandchildren not to pay off the debt, but just to pay interest every year. Think about it. You have to pay let's just say roughly four hundred billion dollars. Soon our injuries on the day will be over eight hundred billion dollars. And if we keep accumulating, and it looks like we will trillion dollars of new deficits every year, we're going to be paying on interest a trillion dollars and it will exceed the defense budget and other discretionary items. The big part of that will be then entitlement program will balloon. We are on a very dangerous path, in my opinion. Part of the fight that she is going to be between those who are willing to raise the debt ceiling if there are reforms on spending, and those who are demanding that the deat sailing be raised with no reforms. I have a hunch that the next month or two that's going to be the central debate. I think. So it's going to be fingerpointing for the next month or two. You have to raise it. And the truth is they are going to have to raise the ceiling because the money is committed. I mean, the debates that took place in December over increasing both defense and non defense discriptionary items was the debate that's said, are we going to spend ever more money? Understandably important debate and the agreement was yes, we are. So now we know that that and they knew that that would be exceeded, that ceiling would be exceeded, and now we're in that situation. So you've agreed to spend it, you're spending it, and now you have to fund it. And the discussion and I think it is, okay, how do we re establish some kind of discipline around future spending that obviates the need to have these frequent debt ceiling increases? And some people say, well, just remove it, and that is an option, but at the same time, I'm not sure that would provide any additional discipline to the spending side, So that has to be thought through. President Biden has a non negotiation kind of an initial stance, but since he actually negotiated in twenty eleven on the death ceiling. I'm not so sure that this isn't sort of the opening round rather than the final argument, because I don't think he can get it out of the house without very substantial changes. Well, I certainly hope it's the first, shall we say, salvo over the field, and I hope both sides are saying, we're going to see how we get to a compromise. But both sides realize that they have to get to a compromise the past not being able to do that because the debt's going to only increase. It's indexed, it's going to increase. So how do you not only raise it, but how do you get a mechanism to keep it from going without some kind of paygo, some kind of discipline around our spending. And if we want to do tax decreases, how we do it, how we pay for it that whichever view you have, and I think there are important differences there. But how you're going to negotiate through that, I think has to be figured out now. And this saying well, we're not going to talk to you, this is it. It won't work, and the American people will suffer, and so will every international position. I wonder if this is a pretty good time to start raising the point of we ought to get on a track that would move us towards a balanced budget and start thinking through what the reforms would have to be in order to have a government we could actually afford. Does that seem too pie in the sky to I hope not, because it's essential. I mean, it's absolutely essential we begin to do that again. Let me just tell you that brought some meaningful discipline agreed upon and helped us address the deficits, and we came towards a balanced budget. If you think of the pandemic bail shall we say, crisis management. In terms of the spending, there were transfer payments not just to those who were unemployed, but the people who were well employed that we're receiving monthly checks. Our excess savings, that is, savings above the long term average increased over two and a half trillion dollars. So what we did is we said, well, this money is free, we want to make sure we stimulate the economy. We'll put all this money out even to people who are working. So there was the absence of discipline made the ability to spend I think irresponsibly more easy, and you have to take that out of it. You have to take that out first, and then you have to bring greater stability into how we spend our money. It's not free. It takes resources, it transfers resources. It does disincent people from doing tasks they might do had they not had the transfer payment brought to them. This is the time to seriously think responsibly about how we put more people back into the labor market, how we discipline our spending, how we pay for our spending. These are things that I think have fallen by the wayside and need to be brought back sooner rather than later, or I think we undermine this wonderful economy in the long term. And the America's New Majority Project that we've been working where we've done a lot of focus groups, a lot of Paul's about seventy six percent support for having a work requirement if you get money. We found when we did that in nineteen ninety six on welfare, people just streamed into the private sector market and got off of welfare because if they're actually going to have to do something for it, that I might as well go get a job. And I think there are fourteen or sixteen states now where the amount they subsidize is so great that you lose money if you go to work, which is crazy. I'm aware of those studies, and I think it is crazy. I think it undermines your ability to produce. As a nation. We have ten million jobs and six million job seekers. I don't think we've been out to balance that bad in my memory, that's for sure. So why don't we think about that in terms of the supply of labor and what's keeping that supply from increasing. Is it really that we don't have laborers, or is it that we have incentives that keep labor on the sidelines at least it deserves. There's a lot of attention buying the Congress of the United States. They've been five members already who have proposed balanced budget amendments. Representing Scott Perry, I think is a very interesting one which he called proposing a balanced budget Amendment to the Constitution, requiring that each agency and department's funding is justified, and he goes through how he would require us to get to a balanced budget and what we do. Brian Fitzpatrick from Pennsylvania also introduced a resolution called proposing an Amendment to the Constitution United States to provide for balanced budgets. Representative Derek Van Orden from Wisconsin introduced a similar resolution, and Representative Jay Obernotte from California introduced a resolution. Representing Zach Nunn from Iowa introduced a resolution. So you're beginning to see across the whole country. Members step forward and say, you know, let's have a debate about whether or not we're going to reform the government and get back to actually paying our own way rather borrowing from our children and grandchildren. And I think this may become one of the biggest issues in this Congress by the time the debate really gets ruling. They need to be introduced, and they need to be discussed, and they need to be debated. And even if you don't get balanced budget amendment, you get the discussion out there and perhaps you get legislation that again, like your period says wait a minute, we've got to get this plan together and we've got to bring our budget back into balance. You know, there are always exceptions, But here's the difficulty. I understand the exceptions. I mean wartime, yes, the pandemic for part of it, but it becomes a what I call the entry point into forever subsidies from the government, forever payments, transfer payments that you can't back out of because there's no rule that says, wait a minute, you've got to balance the budget within certain time period, or if you're going to increase the spending, you've got to cut back here. You've got to bring those rules back, or I think we are going to be having these standoffs again in two or three years when the next ceiling is broken, and it will be unless you have some kind of bind around the spending and taxing of the United States. Within the United States, when we sent out to balance the budget, we deliberately sidestep Social Security because we knew how the left would use it and we knew we couldn't sustain it. Margaret Thatcher and all the privatizations she did, never touched the National Health Service for the same reason. There are certain things you can't do. But we were able to reform Medicare in a presidential election year with AARPS support, And part of the reason was we convinced everybody how serious we were, and everybody said, you know, if everybody's going to give a little, I guess I've got to get so you create a totally different psychological environment for this kind of conversation. Absolutely, you have to have shared sacrifice. I call it. You know it's important, like you say, for your children and grandchildren. You know you have to do these things. So let's get started doing it and do it in a way that we all have confidence we're sharing in this adjustment. And you get that by talking to one another and knowing that is in the Congress. Instead of saying your bad we know we have this issue. We've got to find a way to do exactly what you're saying and sounds naive. Without that, I don't know how you're going to get there. It's like any family. I mean, you've got the family has to be engaged. The family has to feel like, hey, this is important to all of us, and I'm going to do my share exactly right. Otherwise it doesn't work. Otherwise it doesn't work and falls apartment. I want to thank you for joining me. I think, well, here, how hopefully our listeners have gained a better understanding both of the national debt, the gradual problem we're sliding into the debt ceiling, and the conversation we all need to have to use the debt ceiling as an opportunity to start turning the corner on runaway spending. It's always great to have you. You're so knowledgeable and have such a solid background. I want to thank you again for joining me on news world and sharing with us. Thank you for having me, good to be with you. Thank you to my guests Thomas Hunting. You can learn more about the death sailing debate on our show page at newtsworld dot com. Newts World is produced by gingwishtree sixty and iHeartMedia. Our executive producer is Garnsey Sloan, our producer is Rebecca Howe, and our researcher is Rachel Peterson. The our work for the show was created by Steve Penley. Special thanks to the team at Gingwish three sixty. If you've been enjoying Newtsworld, I hope you'll go to Apple Podcast and both rate us with five stars and give us a review so others can learn what it's all about. Right now, listeners of Newtsworld can sign up from my three free weekly columns at gingwistre sixty dot com slash newsletter. I'm Newt Gingrich. This is Newtsworld