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set to expire wednesday. good morning and welcome. thanks for being on the program this morning. that debt limit on wednesday, what does that actually mean and why should be we be concerned? >> i'd be very surprised if congress lets the deadline pass and not allow the united states heto have enough authority to issue the debt that it needs to pay its debts. this is something congress put in place in world war i and all that it was was a way for congress to say okay treasury, you can go ahead .nd issue debt you don't have to come to us every time you issue it. up till that point congress had to issue every debt the united states made and that

was cumbersome and time-consuming so they said treasury, you can go ahead and do it up but to a certain limit. it was up to congress to keep control over the process but in the process of doing that over the years, decades and decades later more than 100 years later it's become a political football and i know lots of people advocate getting rid of it and i like to sometimes be the naysayer saying why get ridof it because what difference would it make ? they would find some other way. there's so umuch divisiveness in congress in the united states that they would find another way to make the budget and our deficits and how much money we might go to others and the way in which we finance what we do. they would find another way to make that. >> you pointed out i think it was on marketplace that the debt limit i think i've got

this right. the debt limit has been revised. congress has addressed the debt limit 100 times or more since world war ii. that's more than a tcouple times per year it seems . >> it's just become such a football and it's a way to try to make it like the other keperson is at fault and what many people before they even talk about the issue remind everyone that it does not increase y the debt ceiling has to do with what we already own. it is not increasing what we all. that is the purview of the budget committees and annual budget and appropriations committees in congress. the debt ceiling has to do with uncle sam, here's what you oh. can we issue debt to pay it so it doesn't increase the debt but i think what's in the politicians mind after decades of covering this or

covering congress in various ways i think they think the public doesn't understand it so it's a way of each side trying to say you increasing the debt, you're increasing the debt. that's what they think is going on in people's minds and they also use it as leverage to say we're not going to do this unless you do that that is not reallythe purpose . but they're using it that way . >> so the current arguments you have now from republicans criticized they're not supporting the debt change and they're saying send similar arguments by democrats against republican congress is in thepast and their attempts to raise the debt ceiling . >> it is just and it's so arcane how they get around it . not arcane but so byzantine and complicated the way they get around to doing it that honestly i have to have a cheat sheet to follow and i'm not sure congress would have to go to other agents and say how do we dothis ? they always find a way around

it. a fallout if they didn't the limit and works able to issue debt is it would raise the possibility that the us would default on its debt which of course this is a fear going back to the first treasury secretary alexander hamilton. we can't do that. if we did that it would be mayhem and i understand why sethe treasury secretary and manypeople say get rid of the debt ceiling . i personally think it's not a bad way to remind the public we do have this enormous debt but it doesn't raise the debt not allowing it to be raised our bills would just be so chaotic and would have so many dire repercussions i don't believe congress. >> it seems like politicians arguments should focus on the deficit, the iyear-to-year spending. explain the difference between what that year-to-year deficit is and what we're talking about with the debt. >> the deficit is the year-to-year shortfall between what we are going to spend and how much money we have to do it from taxes and

other revenue so if you're going to spend two andollars and you only have a dollar in taxes and other revenue then you have to issue a dollar of debt. the deficit, that's the deficit each year. the debt is the relation of all of those annual deficits. >> right now that us debt clock, the us national debt is over $29 trillion and climbing. $29 trillion and climbing around our guest kathleen day, we're talking about the deadline coming up on wednesday this week and tomorrow we welcome your calls and comments at 202-748-8000 one for republicans, democrats 202-748-8000 and independents and others to 48 8002. there's real political economic consequences to this debt fight. take us to theend of 2011 and what happened with the debt fight then , kathleen. >> i honestly can't tell you

every nook and cranny because it's, there's too much of it. they go back and forth and it wasn't, they have had to raise the debt ceiling dozens of times but it wasn't always so acrimonious. so what has been introduced is this acrimony, the toxicity that we see around the issues has now been formulated formally established and introduced into this. and that is what is causing the brinksmanship. when you say 2011, what and this is just so many terms in this where you could say this is the point where they became this way but it's a continuum. >> it has affected the credit rating of the united statesat some point . >> that's the big question. so some people will say the markets are going to shrug it off as the united states

never default. that's what people said about russia. people don't remember this but there was a hedge fund called long-term capital management a while ago that nearly torpedoed the tus economy does it have made a similarly of that in the thinking that a major government likerussia would never default and they did . we're over here in the same ballpark economically as even strategically in the markets as russia is. we arey the benchmark. we still remain despite all this craziness the benchmark of financial security but that could be jeopardized if we really were to default . us security still remains the benchmark of as near to risk-free as you can get and if we want to pay our debts, all bets are off and it would significantly increase the cost of everything the

government does and therefore the taxpayers. they're playing with fire. they can't do it.we are the benchmark of financial security and if we suddenly didn't pay our debt even if it was just political brinksmanship we would throw the markets into chaos or they may say we're not even going to think about it except for the fact some people say everyone knows the us would eventually make good but if someone is if there's a delay in getting your social security check, a delay in getting yourmedicaid , a delay in being paid what you're owed evil really don't like that. that is going to have financial repercussions. you can't say eventually make do. >> you mentioned the treasury arsecretary former fed chair janet yellen is in favor of eliminating the debt limit. she reiterated that point at the house early early this fall. hereshe is talking about it with sean finn of illinois . >> everybody has voted to improve our spending. congress, everybody on this

call in some fashion has voted to decide how much of that willbe paid with tax revenues and somewhat uniquely we gathered ourselves the authority to decide how many of the residual paid with that we are going to pay for. it's political suicide . i have a cosponsor and supporter of my friend mister cost are still two and the default act and take that tool away from congress because congress hasproven we cannot be trusted with that responsibility . secretary yellen, when i think of the specifics of mister koster's plan would you support simply eliminating the debt ceiling so that we don't have to deal with this in the future and focus on real crisis ? >> yes i would because i believe when congress legislates expenditures and puts in place tax policies to determine taxes, these are crucial decisions congress is making and if to finance those spending and tax

decisions it's necessary to issue additional debt, i believe it's a very destructive to put the president and myself, the treasury secretary in a situation where we might be unable to pay the bills that results from those past decisions. >> kathleen day, your response to the secretary's reasoning for her supporting ending that legislation. ending the debt limit. >> far be it from me to touch tradition, she's a smart person and she's right and in an ideal world you would get rid of it and congress would do its job of deciding and they do decide congress does decide through the budget process and appropriations process howbig the budget will be and how it will be sliced up . for various activities and departments. so she's rightabout that . my point and i'm being devils

advocate a bit when i say i don't think we should get rid of it is to say that though i think congress, the people who are fighting over the debt limit will find another way to have that same fight and i'm not sure it would be any more for less productive. or enlightening. >> our guest kathleen day lecturer johns hopkins carey business school is also author of a couple of books including her latest book at and bargain thanks bailout and thestruggle to tame wall street . published in 2019. let's get to calls for kathleen day. it will gofirst to gordon in plant city florida . sorry about that. try gordon, plant city florida. >> caller: thank you for taking our call. in plant city i guess you all know me on a first name basis. i love rick scott and then only on a first name basis but i have a bone to pick with you guys. she said he wants to cut

subsidies using my tax dollars and they can guarantee college loans which is two percent of the national debt and he said he would be in my good graces but i have a theory that he's not cutting necessities to make or guarantee college loans because without 2598 the bankruptcy bill to use to force the free market to swap the lobbyists back to camp down the lending, for john hawley, john cornyn's bankruptcy bill, two things would happen and i want to get your thoughts. number one rick scott's desire to cut the subsidies to bailout the core spending is not going to happen and number two it probably will serve as loan forgiveness because there's the liberals and conservatives can seek failure after failure because the lack of the free market forces and yet i'm on board but when i called rick scott's office and i tell him i'm the director of contract withamerica part two , i can

draw another name. apparently you guys now know who i am. >> will let you go there. kathleen day and in anything you want to respond to their. >> this is the point. he's talking about a specific sp issue, student debt and student loans which is an issue and is an important issue. the debt ceiling which that's obscures that. in the sense that it becomes its own prices crisis. and we congress isn't dealing with it. there's so much progress is in dealing with. the real issue here, the real problem is the failure of politicians to get together and talk to each other and figure some of these issues out. there's a lot of pandering to the extremists on both sides and there's a lot of padifference of opinion.

some of it is posturing, some of it is difference of opinion but again all these issues didn't on debt, infrastructure always get subsumed underpolitical acrimony . again, i go back to the debt at least when you have the debt ceiling evil are thinking debt. the other issue is we probably have too much debt and how to fix it. how to fix that, how to curb that and make sure it doesn't get too much. what is it too much debt is another complicated question. we absorb a lot of debt and there are times when you want to spend money and the coronavirus, the response to that was an appropriate way to do it i believe . and increase the debt but again, the gentleman caller has brought up the issue that congress isn't even dealing with the issues it needs to. it is and i don't think getting rid of the debt ceiling or having a debt ceiling does away with that

for y causes that. is my point. they need to start doing their jobs. >> let's hear from yolanda alabama, independent line. >> roll tide. >> host: you're on the air. >> caller: are all talking about debt. personally i believe america is in debt to the black people of the united states of america who built congress, who built washington. who built the white house literally. we have never been repaid or given reparation for the slavery ask and it's working for free from over 365 years i believe it is so talk about that. janet yellen and your commentator there. but thanks for taking my call but alabama is the poorest

state in the union and i'm they don't want to do anything for black people in alabama. >> host: any thoughts? >> again you're bringing up a specific issue that is aside from the question of the debt ceiling . and the debt ceiling, all of these are that's another issue. reparation, what should we have and should we not. all of these are issues that need to be dealt with and get subsumed under this craziness of throwing the ball back and forth. it's really even like a hot potato, i'm going to make it look like you're raising the debt. let's remember the way in which the debt was most raised recently before it was the tax cuts. and in the last white house.

we were supposed to pay for themselves and they didn't significantly raise debt and the deficit and the debt and the idea was we will do it so much he would have to start talking about cutting social security and medicare but then covid-19 happened, we should have expected that so when itcame along all bets were off . you can then go ahead and cut those programs. if you have it would have had many repercussions to the economy and it would have been amplified so suddenly the game plan about let's cut taxes and even though we're saying they're going to pay for themselves we know it's going to increase the deficit now that gives us an excuse to d decrease the debt. that will give us an excuse to startcutting some of these so-called entitlement programs . and you can't, you couldn't do that. suddenly you have to have the covid standing on top of that so the real issue is the underlying debt. and dealing with that

responsibly and it really hasn't been, the tax cuts just were not done in my opinion responsibly. it wasn't, it was done in the dead of night the tax cuts for corporate jets and other names that there should be. it was crazy. and we are now having to live with that but we now have this in august debt that's way bigger than it was and so the course we have the debt ceiling and i go back to when we had this debate over the debt ceiling i think it does have one redeeming virtue and that is it reminds people we had a huge debt. and it's probably is only redeeming virtue but i think there's some utility in that . the subject that the callers are bringing up our great topics but then, they are not about the debt ceiling. it's nothing to do with the fact. >> host: congressional research service says the us debt held by private investors or the one percent

is held by or in private investors. 59 percent held by foreign countries, held by official foreign investors. what are the biggest holders of us debt, which countries? >> guest: is going to be china, russia, the saudi's, middle east. the world over people want to have us security . people in the last big crisis which maybe our listeners are too young to remember, seems like ancient history but to me it's fresh 2007 to 2012. one of the jobs of the treasury secretary at the time was to reassure all these foreign governments who held treasuries or near treasuries that held back securities issued by freddie mac and fannie mae. one of the biggest jobs was to ensure that these were safe investments so it is all

the big players around the world. that time there was an interesting incident at the time. russia actually called china and said something along the lines of why don't we don't all of the debt that we have on the market at once and it will really amplify the crisis brewing, the economic crisis that's unfolding in the united states. china declined and i think that the chinese wisely thought that if the us falls, so the day but there's such big holders that they have a stake in our nondefaulting and not dealing with things. so we kind of all in this together. there's a saying if the bank lends you a dollar or i'm sorry, but thousand dollars in the bank owns real but if the bank lends you 1million you on the back . it's the fact is our faith and their fate are tied when

so many people hold our debt. >> next is martha was pulling from georgia on the independent line. >> caller: have we ever been out of debt. i was soshocked when you told me how much we owed . >> guest: we have had a debt probably since i don't think there's ever been a year we haven't had debt since the founding of the country and alexander hamilton famously had to make his argument to george washington that we need to consolidate all the state debt from the revolution and pay it to keep our good credit there have been years when we didn't have a deficit. remember the deficit is the annual shortfall. you can have a surplus or r a deficit.

the last surplus was under clinton. the last was 2001. i hope i know it's 2001, that's the last year and i think it goes back four years as to 2001 and back four years . so that's the last time we had a surplus . but again, atthat's the annual shortfall or. >> in those years the debt itself isn't climbing. wehave a surplus, there's no additional debt added . >> iothat's correct. so that's the last time we weren't adding yearly to the debt. but in the last couple of ' years that the addition to the debt has accelerated. >> host: question on twitter. it says most if not all states have constitutions that mandate balanced budgets. the us government has a lend or borrow spender of last resort meaning in an emergency. is there advantage to a balanced budget amendment to the constitution these are the prudent spending. >> if we had that peoplehave tried to have it .

the congress would vote and exception but it doesn't really make sense for us to have no debt. we are big. we're robust.if you think about it if you own a factory wayou don't want to have to save up the money to buy a piece of equipment is going to be revenue producing makes sense to buy.you want to buy it and let everybody go to work and repay that debt. so debt can be a good thing. it's not too much debt. when debt becomes overwhelming and it is we have a lot of debt how much is too much, again tothat's another debate. but. >> finish your thought. >> it's just that it's okay. when i forgot not even what the question was the point is that we have to really need to get to how we spend our money and if you get rid of the debt ceiling, and you have a balanced budget, then what they would do is they would suspend that temporarily because they're

going to have an argument and you're going to need to write that and i'm not sure that that would work and i'm not sure it's necessary. >> let's hear from teddy in sorrento louisiana on the democrats line . >> my question is it seems it's politically popular now that the politicians y cut spending and they don't cut expenses and just borrow the difference. so i think that's what's causing some of this and i understand that the biden administration is trying to pass the tax where the corporations will pay a 15 percent minimum tax and i think that would help . also, could the debt since all the countries need to all the countries are in debt it's a popular thing and also to the government go to negative interest rates for the debt and maybe that would

help them solve the problem. >> negative interest rates is another complicated concept. i don't think that people are necessarily going to pay the government to for the privilege of borrowing but you get into an allison in wonderland type scenario so i'm not. >> sure. again, it sounds like you're saying some debt sounds like it's okay and i agree with that. i think most economists would agree some debt is okay. how much is too much is another question and right now we're at an extraordinary time because we had that huge tax cut and it was probably done irresponsibly and it did not pay for itself. then you have to have it on top of it so it's exacerbated. the situationchwe're in right now is worse than it otherwise would be . if congress had not done what it did so irresponsibly before covid.

>> host: question on twitter, is there a country or world organization that would benefit if america defaults on its debt? >> sure, lots of people would like to see us stumble economically. i'm sure mister putin would be happy to see that. absolutely, so there would be pluses but the holders of the debt could also be hurt. but maybe that's a political calculation where they say we're happy to have a delay in our repayment to see you guys suffer but the real problem for our economy i'm really going above the treetops now is our democracy . people often say that capitalism helps democracy but guess what? democracy is what you need for free markets because the

benchmark of security is t people process and trust our government. those are questioning of the validity of our elections but all these things are undermining not only democracy but our economy. they're eventually going to undermine our economy because we have a military judicial system, all these things in place at work and the world looks to them and says this is a system that works investors know that they have standing in court and investors know that it's not perfect of course but we have a pretty good system where people know they can go to court, they can getaccurate information . we have institutions like the securities and exchange commission which police the e markets . maybe they don't do it perfectly and they could do better but if you undermine that and you have people start to undermine that and you have to us default and on our debt you are going to create long-term economic mayhem that will severely

undercut the economy of the united states and it's going to raise the cost of doing everything. >> host: eugene in coventry connecticut, good morning. >> caller: hello. the debt is now over $29 trillion. when trunk came into office it was only20 trillion . so that in only five years it's gone up 35 percent. this is not sustainable. us money is debt-based. and that means that the financial mechanism of wall street creates money. when big banks make loans, that's how money is created. that may be hard to understand because the media

and the politicians never explained that . the lost science of money isa book that will help you to i understand it . our debts will never be repaid. when the world realizes that, there's going to be a gigantic crash. >> host: some final thoughts. >> so we are always repaying our debt and we always have new debt. the gentleman makes a good point. money is a funny thing. as aristotle said money is whatever has a value that people agree it has in many ways it is debt is a complicated and very esoteric and philosophical realm. what is money but in the day today people don't always think about it a. they have a dollar in their pocket they want to know what it can buy and so we do repay our debts but we keep taking new debt and as we take on new debt faster than working our old debt and the total

keeps rising that's when you need to start saying is this an appropriate level of debt. how are we spending our money. do we need to increase taxes? are people paying their fair share. and there's an argument to be made about every not everyone is paying their fair share and as they all say socialism, like the kind of give and bring in when you want to say thezombies . the fact is we've got to do something about the debt. and we need to be more rational about our budgets and how we spend our money and it would be nice if congress would stop trying to pander to the more extreme elements of our society and started rolling up their sleeves and doing the work. >> kathleen day is lecturer at the kerry business school, author and journalist thanks for being with us . >>.

>>. >> your many of those conversations on c-span's new podcast presidential recordings. >> using one focuses on the presidency of lyndon johnson. you'll hear about the civil rights act, 1964 presidential campaign, the whole tonkin incident and the war in vietnam . not everyone knew they were being recorded . >> certainly johnson's

secretaries new because they were tasked with transcribing many of those conversations. in fact they were the ones who made sure that the conversations were taped as johnson would signal to them through an open door between his office and there's. you'll also hear some blunt talk. >> i want to report of the number of people assigned to kennedy the day he died. the number assigned to me now and i want that much right quick. if i can't ever i will promise you i'll go anywhere, i'll just stay behind these states . >>. >> the supreme court took up two cases that could decide the fate of roe versus wade.

sunday, joshua prager author of the family roe talks about the complicated life and times of norma mccorvey, a.k.a. jane roe the woman behind the case. the activism of the court's decision in roe andgender and the impact of her accidents had on her and her three daughters . >> her life was such a mirror and a window into this whole big thing of abortion in america and the pro-lifers will say hi, look at her and look at the cost of abortion but she never had an abortion and what she actually is is a fascinating testimony to is the cost of adoption. she struggled enormously, emotionally with having three children through an option. >> joshua prager and her book the family roe on q&a. you can also listen to q and day and all of our podcasts on our new app.

the senate now in recess until 2:15 eastern for their weekly party caucus lunches. when they return they will continue work on a measure to increase the us that limit . later in the week lawmakers could consider the presidents climate and socialspending plan . follow live coverage when they return. >> today the senate will vote to advance at least one more judicial nominee. we will vote on the motion to proceed on legislation all hopefully before we start the afternoon. it's a busy day so let me break down each of these items in some detail. on the legislative front the senate will vote to invoke cloture on the annual defense. negotiate on a bicameral bipartisan basis. for over 60 years the nda a, national defense authorization act has passed ou