including wow. >> guerrillas change, today the fast reliable internet connection is something nobody can live without a while is there for our customers speed and reliability enjoys now more than ever it starts with great internet. >> wow support cspan with a public service along with these other television providers giving you a front row seat to democracy. >> a conversation now in the national debt u.s. economy with crystal, research fellow at george mason university and previously worked in the federal reserve bank and ines new york d chicago and that has acted yesterday to raise the debt ceiling ahead of potential default. but we haven't debt ceiling the first place in oneli week keep creeping towards these potential cliffs. >> first, thank you so much for having me on and i'm really excited to be a cspan the debt

limit began he recently speaking, created in 1917, as a way for the u.s. treasury to be more able funded the first world war and up to that point, congress usually authorize each individual treasury debt. for specific purposes for example issuing debt for the panama canal with the advent of world war i and the massive increase in government spending, and became a reasonable thing to do so the debt limit on one hand, the treasury's more ability to better advantage the treasury's cash and debt but on the other hand also to make sure the treasury was not issuing too much debt in the amount of spending that ought has been authorized. involved overtime and recent years, as you know the audience knows, has kind of as a backwards looking constraint on spending. were attempted to be used in that way and also for other and a consequence of that in the

last say days - every few years, default episodes where it takes a lot of political pressure to get aca debt limit race of the government does not default on its obligation. >> is raised by hundred million dollars expected b to buy the treasury departments two or three months or so here until we have another debt limit vote for at least default cliff there will be approaching. is it worth still having a debt limit if we continue to have these issues. >> i believe at this point the debt limit poses a danger to the u.s. economy and our financial system that is no longer worthwhile. the congress authorizes the spinning taxes is the treasury does and for better or worse, congress budget mandates the deficit in the treasury should be able to then undertake the actions necessary to finance the deficit in the senate also stressed that we do face

long-term fiscal imbalances. in run-up debt levels are unsustainable for basically all human history, suggest is in fact not goingst to work out wel for continuesin for us. i propose that congress tackle these two essential issuess together, hopefully find some middle ground in washington that we can actually get a solution through and that would be pairing a permanent suspension say don't have these crises every few years along with long-term budget to stop the unsustainable growth as well as growing the size of our economy. as far economy, even sustain higher levels of spending. >> evhouse democrats, and they e criticisms basically yesterday, on proposal to give the treasury department the authority to lift the debt limit and congress the ability to overrule it and this is what she said. >> there all kinds of

suggestions that members have in one that is really was endorsed a while back by mitch mcconnell that who knows or who knows but it was to manifestation of it now enormous and they put forth responsibility on the secretary of the treasury to make the determination to lift the debt ceiling and a decision could be overruled by the congress. it would take 60 votes under the present custom but nonetheless, congress would have to overrule that. that seems to have some appeal to both sides of the aisle because of the consequences to people of not lifting it but why are many democrats and

republicans have voted against this but never v to the extent f jeopardizing and this is the first think. >> are you in favor of that idea pretty. >> yes, i do think it has merit. >> and that proposal and other proposals, sort of get around this. >> let me not comment on specific proposals and nonprofits might try to steer away from particular potential financial bills but are whole and think the type of compromise that congresswoman pelosi is talking about on the one hand, you authorize treasury to take the steps it needs to take to finance the government deficits and on the other hand, you get the political support something needed and i think it would need to be a broad support of both parties that would be achieved on the republican side by having fixes to long-term solvency of the nation. >> we heard about ideas of a

trillion dollar coin and invoking the 14th amendment and without endorsing it any specific approach or proposal you justit talk about those isss in general and widely, as a way to get around the debt limit here. >> one of the great things about america's we have great creative people and some are lawyers on her face with a crisis like this, then theyre go back and tn look at acts passed by congress and coins and they take creative readings and parts of the constitution to figure out if anyone is around at what i see is a necessary but hard thing to do the actual compromising congress again. we see these being thrown out there i think as in one part good faith certainly, a complete for the u.s. default on the debt would be a catastrophe. and to say the least but i don't see that as anything other than

gimmicks and disagree with the treasury secretary yellen and powell in a whole range of middle-of-the-road things on the issue. >> george mason university, whereas talking about the debt limit and phone lines are open for you to join the conversation as usual republic's (202)748-8001 and democrat 748-8000 and independence tos, a 27488002 pretty thank you for calling in and you as of this, and is going to be 870 million d more and county and how much debt is too much debt. >> that is an excellent question and honey put that into terms that may be easier for the audiences to understand and right now, federal debt held by the public, the u.s. treasury bonds that the government issues like me and you and countries banks are so forth 100 percent

and now there's a lot of debate among the economist online about a sensible number is for this and you can think of it like your mortgage your mortgage of say ten times your income, maybe that is pushing it up or down to what iss an acceptable amount of debt and in the same way for net yet still 100 percent of the national income, that is pushing it quite a bit but course u.s. is also one of the most resolve companies in the world in we have awe financial system help s finance this debt so i don't mean be an alarmist or say that tomorrow is going to be some prices but rather if you look at the projected level of debt over time, that willl grow out of control even beyond the projections released by the office two weeks in the past two decades or three decades, it was time when t the federal reserve

was worried there would be too few treasury securities t not be able to do the regular monetary policy active there's treasury bond outstanding in our the point after the global financial crisis and after hopefully near the end of the pandemic recession, they were at 100 percent debt plus, trillions of more of other liabilities that are not in a number but are really putting a backstop on the u.s. government to the financial system ase part of the economy. i don't want for a particular member out there but rather to say that whatever sustainable number is hundred percent of gdp or on our 10 percent of gdp or 120 percent of gdp or 150 percent of gdp, eventually that maximum will get reached if we continue to grow debt and sustainability printed. >> we've heard about this before coming can you briefly touch on what they are and where they are held.n

>> basic economics here is theirs newly acquired debt that they does not seem appropriate guarantee so common are they deposits in united audience, we give our dollars to the banks and the checking account numbers essentially and we think of that checking account balances being actual dollars but if but really it is actually dollars but we can go to the make it any times that we want to running have to give it to us now and a fixed number that we gave them plus interest. during the great depression, u.s. congress and present roosevelt decided it was important enough to be backed by guaranteed u.s. government, the fcic that does that and in normal times that worked out phenomenally because those deposits are backed by the u.s. government. and people don't need to worry about this does solvency of make so great depression and other financial crisis, we don't need to run to the bank every time work stupid about the markets

and about how these negative knocks on the financial system in the economy. another big example is mortgage-backed securities, they would run a significant problem during the 2008 financial crisis. and fannie mae and freddie mac were brought onto the u.s. government be a conservative ship and quick understanding the market is that if mortgage is not bad, the government would step into back of the market that has been fortunately, made arguably in the last ten years so these are the types of things and talking about there'se a whole range of other ones as well but also really the point is,nt the u.s. government sees private liability debt they say this is too big to fail and we are going to backstop it. and are more numbers than what has been reported. >> including william, pfeiffer democrat, good morning. >> good morning john.

i don't know, i thank you so a politician i think they should keep their hands out of the national debt. it's just a shame that this could be a great country but no, our politicians has done everything in the world to try to keep us away from and and john i am 86 years old, i have always voted democrat except one time, i o voted for one republin in my lifetime and thinking about it is continuing because all we have is crux. as a lobbyist who line the politicians parkinson were supposed to have a government, is a gimmick, it is just a shaman i feel so sorry for my eight great grandkids. they don't understand that this is a corrupt political system. it. >> before he got was the one republican you voted for your lifetime.

>> nothing ever became of it and thank you so much and i am 86 years old and thank you so much john and goodbye. >> too much politics around the federal debt. >> i'm withh you, i want to know which republican he voted for an early sympathize. but i hope that the issue we're facing here is an important enough that in the way that he described it, nonpartisan and not here to argue that we need to have necessarily small government or big government. we can have either come is a choice that we the country need to make. we can have large gdp are small tv in their pros and cons of both. what i argue is unsustainable lives there debt is not sustainable whether you going to have a small government or a part government, that holds.

>> taught in carolina, good morning you are next predict. >> good morning and thank you for taking this call. i agree with the previous color in reference to politicians and bipartisan and voting on the infrastructuretr bill when president obama was trying to get a program together for building our resident from euros and bridges in the republicans were totally against it and when president, the previous president trump was in office, and he wanted to develop infrastructure bill to improve our roads andim bridges, the republicans were all for it and again the republicans are against it under presentag bides leadership. my personal concern would be present biden we do something to

reduce or eliminate these tariffs that were imposed upon by the trump administration because an increase was passed oon to us as taxpayers and peoe buy commodities on the market. >> so on terrorist. >> in general, the compromise the debt limit and also that and i think we should have structural forms, enter forms as well and grow the size of our economy and again, a greater level of economic growth really particularly on the debt. so terra perform would be great and they talked a lot about reform of our medical system. it would be great to have more providers of medicine for a lower cost for americans and concern for just about every

family in the country but laws are in the book that prevent new hospitals from starting without the approval of the hospitals in the state. and gentlemen brought up the issue of infrastructure and i think it's in central i and you also wonder whether there are constraints right now on individuals and businesses that prevent them from investing in infrastructure. a private an investment, there's also a public investment in infrastructure for example, building regulations which prevent homeowners from improving the properties and from building t extensions and t seems like assessable dwelling units in a noninvasive way, the housing stock of the country thatt lowers the cost of housing in the united states. on big concern for american families across the country rated so think there's a lot of importance that can be done here and by accident itself we might be able to generate and compromise. >> chris in new york city, on

our text messaging service, if the debt limit or ceiling was all raised, now or in a month, with a rate of tax revenue to pay the interest on the existing debt since medicare and social security are already funded, what exactly what a practical effect be and how much daily revenue comes in and the expenses that need to be covered printed. >> that is an excellent question and let me first say yes, social security are funded but is funded and and what happens with social security as an example, we'll take these taxes and go to work in a paycheck and the money is earmarked for social security. but not in the way you would expect, stop being put into a separate account and invested today in a variety of investments to grow those valleys of that money over time. and ready for you and me when we retire. instead, the social security revenues used to pay for despite anything everything that the government spends money on. whether it is more or justice or

whatever else you might not like the government spending money on that's what it's used for, just goes into the same checking can't count is everything else. so anyway, the way that is operated from a financial perspective is that the treasury gives the social security trust fund, they say that you took in this much in taxes, we paid out the smaller mounted revenue as a consequence, we owe you this amount that is left over for future benefits. ... ...

may be treasury could instead pay just social security, medicare and the national defense. we can play the numbers but that scenario seems plausible for a time at least but but i just know whether technologically it's possible for treasury to prioritize payments in that way. speaking to sort to advise during the 2019 episode in some notes of the payment system used to run our financial system, let me just say i'm not confident

that can be done. i don't know. this is not an easy system to work with. >> speaking of the federal reserve and switching gears explain what tapering is. >> tapering is the process offe the fed ending its massive asset purchases. the fed has the largest asset purchase in this program history starting with the pandemic. the balance sheet is over doubled in size at the start of the pandemic and is now at $8.5 trillion up from about $4 trillion before the pandemic and is over eight times its eye since the start of the global financial crisis. these purchases help promote aea rapid recovery from the recession putting millions of people back to work. the fed continue to buy $120 billion of u.s. treasury securities and agency mortgage-backed securities every month. tapering is a process of the fed beginning to reduce those purchases and bring them down to

zero. >> when they do that when this tapering happens what the schedule here at how much is a subject to change by the whims of congress and something like this debt ceiling issue that is now been punted for two months from now? let me defer to commes that have already made. in a high level, back in october, fed officials announced that they were considering the possibility of begetting the tapering process. that could occur as soon as november. they have an upcoming policy meeting where they might announce that. the debt limit might be punted. hard to say. chairman powell has always been clear that monetary policy is not preset. we need to react to changes in

inflation, the job market, the debt limit. there is no clear guidance about when they would begin the tapering process. last i saw surveys of market participants, these are the banks that fewer operate with in rocket operations -- for example, bond securities. these banks want tapering to take between half a year and a year. host: do you have an opinion on the right rate that the fed should be prepared to respond to in future crises? caller: when it comes to tapering, simpler is better. if you want to get down to zero asset purchases a month over the next year, simply take off at 12 of the current rate of purchases each month. i should note, though, that even

when the fed stops purchasing assets that does not mean it is beginning to reduce. the fed invests each month, both treasuries and mortgage-backed securities. if the past is any indication of the future, it would take a period of time in which they hold the balance sheet. then slowly and methodically, they would allow maturing securities to join the site of the fed's balance sheet. host: talking with christopher russo. if you have questions, now a good time to call in. nelson is in florida, republican. caller: i would like to point out that virtually all civilizations have declined in the past. they have had we will leave this program at this point.