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>> chief economist trump administration is. let people cost for podcast. prr podcast. let's begin with what ■úe federal reserve decided to do yesterday which is making the front pages ■of the national newspapers. the washington post said hold rates as inflation plateaus and inflation is improving the prices are still growing faster than normal and the economy is slowing but not enough to convince the federal reserve it can take its foot off the brake. what do you make of that strategy? guest: it's good to be with you this morning. i think the strategy is right on. inflation remains elevated. it's too high for americans

across the country and although it has moderated from the 9% we had a couple of years ago down to about 3.5% today, is still higher than the 2% inflation target the federal reserve would like to see. there is a lot of work to do so i don't think they will be able to cut rates anytime soon. it may be until september which is what jerome powell mentioned ■harea that may not be until net year. expect your home mortgage rates, your car loan rents and other interest rates cost the economy to remain higher for longer because inflation is remaining higher for longer and the economy has not been able to keep up or grow faster to bring down prices because that's what we need is more economic wrote and a lot of the policies by biden and even the federal reserve are keeping supply from growing as quickly as they could be otherwise. host: there was some good economic news, corporation rises which excludes volatile food and energy items posted their mildest gain since 2021 and rose

.2% from april below economist expectations. is the fed steering this economy as best it can? guest: that's a good point. excluding food and americans all buy food and energy so we can talk about that growth rate year-over-year but people need to buy things and they would like to see the rate at 2% so we are almost at 70% higher they would like for the inflation rate to be. some of the cpi measures like for food that you buy at home will increase by only 1% year-over-year. that is a good sign but if you want to go to a rtaurant, that has increased 5% year-over-year and that's hitting americans hard and if you add that average weekly earnings which you make for a week and you adjust that

for inflation over time, they are down 3.9% since january of 2021. that's why many americans even though the numbers look at on the surface, there is concerns out there about the economy. host: the biden administration and the fell reserve, do they deserve credit for bringing inflation down without causing a recession so far? guest: i don't think so. a lot of this was generated because we had from 2020 where congress spent a lot of money and they ran up deficits and the federal reserve increase their balance sheet by $12 trillion. they put a lot of money into the economy anpp restrained from the lockdown and the high taxes and high spending that was going on and many people did not go back to work for a while so that constraints apply. you also had demand increasing at a rapid pace with new money creation see you had a huge amount of inflation. when you think about government,

d.c. were the ones that cause the inflation now they are trying to cure the inflation and what's problematic is that we have congress and biden still having too much governmenits and the federal reserve is not cutting their balance sheet fast enough to bring inflation back down. i'm still concerned there is too much inflation out there. before we give them too much situation we have today and not growth.nough to host: fr trump will be on capitol hill today talking about the 2025 agenda should he get another term in the white house. there is much focus on the former president's tax cuts that happened during his first term. what is the impact of those tax revenues and our economy today? guest: great question. the tax cuts and jobs act, big part was cutting the corporate

income tax rate from 35% down to 21% which allowed for more economic growth, repatriation of some dollars in other countries, they were sending their profitability back to america. a big part of that was the individual tax rate changes were cuts across the board. no matter what income level you were, there was a reduction in your income tax and those expire in 2025. there were other measures like the state and local tax did touch and that it -- that will expire in 2025. other measures are expiring as well. if the tax cuts and jobs■ act expire, everyone will see a tax hike and this goes against would biden said going back to walker bush saying read my lips, no new taxes. biden said no new taxes under his administration but that's

what would happen if the trump tax cuts expire. that will hurt economic growth and bring down revenue over time. the trump tax cuts in 2017, revenue s still hitting record highs and over the course of the first two years of the trump tax cuts, we saw that revenue did not go down by as much as what they expected. it's still too high which raised the deficit but deregulation also contributed to more economic wrote and more revenue that came in. you also so the people were dropping off these government safety nets and people got jobs and wages were going up faster than inflation. that contrary it is less spending in certain areas. those things are positive about the economy so my concern is the trap -- the trump excesses fire, we will see less economic growth and more hardship for americans at a time when they are already struggling. host: the bloomberg headline recently --

how do you respond? guest: there is a lot of modeling out there and looking at different assumptions of what they put into those models. when you put junk in the models, you get junk out. it doesn't incorporate or include the faster economic growth we will see that brings in revenue and incentive to be able to get back to work and start investing and across the country. while i would say that the trump tax cuts will have a cost in the short run, over time, this is another key point of why we need sustainable budgeting on the spending side. spending is the problem, not tax revenue as we see record highs and revenues and we need to have more economic growth. if you don't extend the trump

tax cuts, will not get more economic growth. it will be hurtful to the economy and hurt the overall budget picture. we are in a dire situation when it comes the fiscal crisis put on by too much government spending by congress that's not going to be a tax cuts problem. it's a spending problem we have to get control over. m3while we see different reports showing different estimates, let's remember the true burden on taxpayers is from government spending, not on taxes. let's get spending retraining -- restraint and get taxes going and there's a way to bring in more economic growth by reforming taxes and reducing the burden on americans across the country who need that right now. host: vancegwynn at the office of management and budget during the trump administration and we are talk about in nation and the economy anymore want to get your thoughts on that this morning. rib it -- republicans dial in at

, democrats, (202) 748-8000 and independents (202) 748-8002. you can text us and join the conversation just include your first name city and st. rhonda is up first in freehold new jersey, democratic caller. caller: good morning america. my beautiful country. mr. vance, i totally disagree with your tax proposal. it's already cost the american people $8 trillion and we know 80% of that money went to the top 1%. that's only about 500 people. it's absolutely insane. also, i am sick and tired of the republican party using donald trump as if he is the former president. he is the former guy.

the fact that our congress is meeting with him today instead of the administrators to help ue , take care of american issues, they need to work for the trump campaign because that's all they do is work for donald trump and take poor people's money. host: are you working for the trump campaign? guest: no, i'm not working for the trump campaign and i hear the remarks and i understand your concern. the $8 trillion was actually in ineese under the biden administration. there was an increase in the short term under the trump administration as well which was too high, about $7 trillion but that was during the trump tax cuts, it was a result of excessive government spending, not the trump tax cuts

themselves.higher interest rates have been during the biden administration , not during the trump administration. there was lower inflationary pressure during the trump administration and there was during the biden administration consubstantial he lower and there in 2020 during the lock downs other things and the cares act that congress passed but that was not part of the trump tax cuts. we need to be able to separate these things. there was too much government spending during the trump years and there's been even more under the biden years that we've got to get control over. this has been a bipartisan problem, republicans and democrats when it comes to excessive government spending that i hope we can get control of quilye trump or biden, let's make sure spending restraint is a part of this for now but for the longer run and i think we have to get back to deregulation. when you look at the fbi see, what the fed is doing and the

others who are regulatory and use these of the budd administration area they had come out with a slew of new regulations that hurt americans in the financial sector and otherwise that are keeping us being as prosperous as possible and less economigrowth. we need to take a look at these things especially when we do about the fbi see and see how we roll back these regulations. you do that and we can unleash the economic potential of americans across the country and ultimately bring down the deficit that's hurting americans across the country. host: james in providence, rhode island, democratic caller. caller: thank you for the call. vince, i appreciate you talking about your point of view about the economic we are on top of the world. i don't know where you see that we are struggling here. i am a working man and i work just as well and i'm doing fine. i may have to spend my cuts in

food or bills but i'm doing fine. people have to manage their money as well as congress. congress didn't do so well when donald trump was in office. now that biden is doing well, everybod wants to darken his cloud. he is doing well and i'm voting for him, thank you for the call. guest: thank you for the call as well and i appreciate your remarks. there are a lot of people doing well but there's an awful lot of people who are suffering across the economy. about half of americans according to a recent post shows they believe we are in a recession. technically speaking, we are not in a recession. there were other measures that are out there. for present is the highest it's been in years. that's still relatively low historically but it's up from 3.4% a few months ago.

that's an increase in the unemployment rate. when you typically get more than a 0.5 increase, it indicates you are going into recession. the unemployment rate and jobs measures out many the economy slows down first and then businesses start to let go of workers. this is a big concern for me. numbers like household employment, it's only up 0.3% is nonfarm jobs were up 3 million so there is a huge diversions with headline numbers. this means that there are jobs being added but many people are getting multiple jobs and people are getting part-time jobs. part-time jobs over the last year are-time jobs are down 200,000. this is not a good situation for many americans that want a job. even when you have 270 2000 jobs added in may, we saw the 40,000

of them were government jobs. i want people to prosper. government jobs, the government doesn't have any money, nothing is free and it comes from the private sector. there is the shift going on across the economy were private sector workers are paying for government workers government workers are up about 3% year-over-year where the private sector is only up about 1.5%3 that means government workers are growing at twice the rate at -- as private sector workers. this is a concern along with the inflationary pressures and in my view, i would say that what we need is less government. we need to get control of our deficits and debt and regulations out there and that will allow for you and many people to be that are off in the future. host: how do you look at our deficits a they are major probl. deficits this year is expected to be around $2 trillion in yen.

we are running trillion dollar deficits per year and we are paying interest on the debt meaning payments on the debt from the nearly $35 trillion of national debt. we are paying $1 trillion per year which is more than we spend on national defense. we've got to get something done here and i think that comes by restraining government spending. i say we should spend more than just no more than population growth. that's where the money is coming from as the taxpayer and that will allow for more growth in the economy. in the meantime, we need to be cutting our spending. we went from $4.8 trillion when i was in the trump white house and 2019 to about $6.8 trillion now. that's a $2 trillion increase in a short time. that's why we are running massive deficits across the economy so we got to cut government spending first and then start to slow the growth rate over time and then we can

get control of our deficits and debt and bring about more economic growth which will also contribute to more increases of revenue and reductions in deficits over time. that's the only way out of this. even during the 1990's during the clinton administration, the republican congress came in and made sweeping reforms and they restraint the growth rate of government spending and at the same time, we had more economic growth we ran a budget surplus for four years in a row. we can do that same thing again. i'm hopeful we can rein+ in government spending. host: you can do that again without looking at social security and medicare? guest: i believe those will be on the table. republicans democrats don't want to talk about it but when need some major reforms as we have a lot of people who are retiring and a fewer number of people paying into the system. there is not an account in my

name at the irs and says this money is for you. my money is going to retirees today. i think at some point, we need to find a way off of this scheme that's out there of this redistribution that's happening. you have private savings account in your name and we need al about whether we should force people to save in general. whenever there was supplemental income, the social security was not meant to live on and now people are living on that area i don'tat all. this is the incentive that's been put in place in the same thing with medicare. we need more opportunities for people to pay directly for health care and it will bring down prices on a market-based system rather than a government system and this will help the budget tremendously. i agree we need to do something about social security and medicare but that will get people upset and i understand that. for the good of america, we got to get back on track because we

are way off track today. host: john in virginia, independent. caller: good morning. can you explain the difference between our economy and an economy like russia? it seems in both economies, the government has complete control. government gets control by creating jobs or losing jobs in our economy. can you explain why the government has so much control over our economy? guest: a great point. you have russia and there are major differences. russia is a socialist economy where it's a top-down government approach. communism runs it in the political side of things is similar to china. you have these government top-down approaches that are happening. in america, one of the beauties has been our system of free-market capitalism where instead of a top-down approach, it's been a bottom up approach. unfortunately, what we've seen over decades, nearly a century

now is that we have more and more government involvement across the economy. you think about health care and $.60 of every dollars coming from you through medicare and medicaid andther measures out there. dollar is spent.n, $.90 of manufacturing, there is this industrial policy going on in america. i think we are on this road to serfdom where we have too much government in the economy and that's one reason why we have slower economic growth. we were running three or 4% growth rate in the reagan administration and now they expect to have only 2% growth rate. if it's that slow, you will see higher deficits because you are not bringing in as much revenue as you otherwise would we need to raise taxes in order to cut the deficit and debt. it's a bad idea because then you slow economic growth and that brings down tax revenue in the process.

our systems are very different than russia and china. that's a blessing but we are moving too far in that direction and i'm hopeful we can start moving back toward free-market capitalism. if we do that, we will let people -- prosper. host: benjamin is next. caller: thanks for taking my call. there is one stat that is very concerning and that's the median wage in the country is going down. the regulation he's talking about, deregulating our economy, what we want to see his fewer and larger firms in more smaller firms because that will contribute to the median wage and the wealth of our country.

that's my comment. guest: thank you for those comments. what we want to look at is both sides. who decides how big is too big there is a lot of discussion now by the biden and the federal trade commission along with the department of justice which has been overly active in trying to bring down -- bring about these antitrust cases and break apart businesses, reject mergers and acquisitions because they say of businesses in certain sectors. who decides? it should be up to the consumer. the consumer should be able to decide that if we don't like this company or they had too much money or profits, stop going there. you have a lot of consumer sovereignty i don't think we give ourselves credit for as consumers. we don't need big government to break these things up because

when they do, we will alwayse the side effect. a french economist said we have the scene versus the unseen. we see prices are too high and can't keep up but the unseen is that we should be able to act on our own accord as consumers and choose where we want to go, try to make the best decisions possible. unfortunately, you have bigger government whether it's breaking up banks are breaking up different businesses and creating too much money by the fed and overspending by congress and the fbi see -- you see you have a concentration of income and wealth that's driven by government action, not by pre-mark -- free-market capitalism. i think it's important for us to reduce the size and scope of government in every area of our lives that way we have more liberty, more economic item that means more prosperity. i don't want to be russia or china. i want us to be america and allow for us to have as much freedom and prosperity as possible.

i think deregulation is a big part of that. and whether that's for business we like or not, we should be able to make those choices as consumers and not use big government in the process. host: andrew is watching, democratic caller. caller: good morning. my argument with your guest today is we do not have a spending problem. we have a revenue problem. trump republican surrogate is proposing that we extend the tax cuts for the super wealthy and the corporations once again which will lead to massive debt and deficits in this country. what this guy is proposing and i'm glad you brought it up, how are we going to bring down the debt and deficit? he proposes to go after the entitlements. social security, medicare, medicaid. of that, trump has said if he's elected, he will get rid of obamacare. these guys are basically bank

robbers. they will go to where the money's at and that's the entitlements. all you trump supporters, all you independence who are concerned about the price of gas in the price of bacon and eggs, you let these guys in and you will be lucky if you don't lose your pensions, you will get drastic cuts to social security and medicare and medicaid. you will pay through the nose because these guys are interested in giving tax cuts to the super wealthy and the corporations. that's all they care about, thank you. guest: thank you for your comments. i'm not a trump surrogate. i did work there for a year and what i will say when he was president, if what we are seeing now is that people can afford a lot of items you're talking about, that's through the big government socialism under the biden administration. what i hope is that we get some

return to free-market capitalism that comes from government spending less. the government is about 25% of gdp. that means one out of every four dollars is by government taxpayr paying today through taxes or in the future with higher taxes and inflation which is a hidden tax. we have a situation already were government is too big. i understand your concerns about the trump tax cuts and other things but remember that those trump tax cuts were for everyone getting a benefit and research has shown that everyone benefited across the board. it did not go all to the top, it went across the board and everyone seen the benefits of those tax cuts and if those are allowed to expire next year,ss the economy and across income levels especially those at the bottom of the income spectrum. i want everyone to do as well.

we talk about income inequality where they say the upper income is making more than the lower in and that's true. we are also seeing they are growing together. they are both increasing over time is just that the a than the lower income. if we are getting everybody to a group -- to improve across the spectrum, why is that a bad thing? inflation i was going way too fast so average earnings, median about with average weekly earnings and are not able to keep up with inflation and this is been a major problem. i hear ys the country but i think we are looking at the wrong problems. we don't have a revenue problem, we have a spending problem and i would get -- we see this across the country. we need sustainable budgeting and less regulation and less money printed by the federal reserve. that's what we will see. host: the former chief economist of the office of management and

budget with the trump administration of the host let people prosper podcast. nversation

hope and idealism. matthew to cut off, let's override my time. ♪♪ ♪♪ ♪♪

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