cspan our video app. >> cspan is your unfiltered view of government, funded by these television companies and more, including cox, it is committed to providing eligible families access to affordable internet, the connecting compete program and funding, one connection and engagement at a time, cox, keeping us closer. cox connecting cspan as of the service with these other television providers and community front row seat to democracy. >> return next by journalist and author and lecturer john hopkins spirit by carey business school on economic and we will be talking about the debt limit which is coming up on wednesday, the debt limit in the current debt limit is sent to expire and

wednesday pretty welcome. thank you for being on the program this morning that debt limit on wednesday, what is that actually main and why should we be concerned about it. >> i would be very surprised if congress led the deadline pass and allow the united states to have enough authority to issue the depth that it needs to pay and this is something that congress put in place and world war i. and all that it was was a way for congress to say okay, treasure you can go an issue that any do not have to come to us every time you wish and up until the point, congress had authorizeded every debt issue tt the united states made. and it was cumbersome and coming consuming so they said you can

go ahead and do it up and up to only to a certain limit, so 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 has become a political football. and i know lots of people advocate getting rid of it and i like to sometimes say, why because what difference would it make, they would find some other way, some divisiveness in congress and in the united states that they would find another way to make the budget and our deficits and how much money rio to others and how much in the way in which we commend what we do they would find another way to a make that political braided. >> i think it was on the market treasure, that the debt limit has been revised and congress has addressed the debt limit,

100 times or more since world war ii. it is more than a couple of times per year it seems. >> yes, it is just become such a football and it is a way to try to make it like the other person is at fault and what many people talk about and i should remind everyone that it is not increase the debt ceiling, has to do with what we already owe. it is not increasing what we do. that is the purview of the budget committees in the annual budget in the appropriations committee in congress and the necessarily is has to do with okay, uncle sam, here is what you owe. can you issue the debt to pay it it doesn't increase the debt i think in the politicians mind after decades of covering this, and various weight come i think

they think the congress does not understand so it is a way of each side to say you are increasing thehe debt. and they alsonk use it as levere to say that were not going to do this unless you do that is not really the purpose of that but they're using it that way. >> so the current arguments you have from the republicans criticizing and not supportingno the net change it so it similar arguments used by the democrats against republican congress is in the past in their attempts to raise the debt ceiling, correct. >> absolutely and so archaic, and how to get around in his comfort getting the ways to get around doing it that honestly, i would like to have a cheat sheet to follow. i would haveur to go to that and say how do we do this. the followed is if they didn't, off the limit and of course it

would have a possibility that the u.s. would default on its debt which of course this is the fear going back to the treasury secretary. alexander hamilton, you can't do that if youha did that, it would be relate mayhem and they understand why the treasury secretary many people said enough, and i personally think it is not a bad way to remind the public that we do have this enormous debt but again it does not raise the death and not allowing it to be raise and allowing to pay, would be just so chaotic and would have so many professions. >> they should focus on the deficit, the year-to-year spending and explain the difference between what they year-to-year that deficit is and what we are talking about without debt. >> the deficit is the year-to-year for fall between what were going to spend and how much money we have to do it from passes another revenue and if you going to spend or money,

then you have to issue that debt. and the deficit, that is a deficit each year and the debt is the accumulation of of all those annual deficits pretty. >> and right now the u.s. national debt is over $29 trillion and climbing, $29 trillion and climbing. and today we are talking about the debt limit the deadline coming up on wednesday, this week, tomorrow and we welcome your calls and comments and (202)748-8001 and democrat students 02748 . and a political economic consequences through this debt fight in collected 2011, the end of 2011 and what happened with the debt fight then. >> honestly i cannot tell you

every snow can probably because there's too much of it and they go back and forth and it was, they have had to raise the debt ceiling dozens and dozens of times but it was not always so ceremonious and so what is man introduced is this acrimony, the toxicity that we see around so many issues has now been formally established and introduced and who it valid that is what i is causing the brinkmanship so when we say 2011, there are so many turns and that is where you can say well this is the point where they began the same or but this is a continuous thing. the credit rating, that is the big question and so some people would say, the markets will shovel off w in the united stats will never fall off the desert

they said about russia. there was a hedge fund management. [laughter] and this was a while ago. it had made that similarly in the thinking that the government major government like russia whenever default and they did. .. of everything the government does. they are playing with fire. they cannot do it.

we have the benchmark of financial security. even if it was just political brinkmanship would throw the markets into chaos. or they might say except for the fact some people say everyone knows the u.s. would eventually makee good. but if someone has a delay in getting social security check and delaying egg getting your medicine be delayed being paid what you're owed people really do not like that. that is going to have financial repercussions. you cannot so they will eventually make do. >> you mention the treasury secretary former fedy chair janet yellen is in favor ofd eliminating the debt limit. she reiterated that at a house hearing earlier this fall. here she is talking about democratic congressman of illinois. >> someone has voted to approve the spending. some on this call has in some fashion decided what will be

paid for tax revenues and somewhat uniquely we give ourselves the authority to decide how much off the residual which is paid with debt and we are going to pay for. it is political suicide. i am and cosponsor and supporte. two and the default act and take that away from congress because congress has proven that we cannot be trusted with that responsibility. secretary yellen what happened specifically with mr. foster's bill that you support simply eliminating the debt ceiling so that we do not have to deal this in the future and focus on real crisis. >> yes i would because i believe when congress legislates expenditures and put simply tax policy and determines taxes and the crucial decisions that congress is making.

finance the spending and tax decisions it is necessary to issue additional debt. i believe it is very destructive to put the president and myself and the treasury secretary in the situation wherere we might be unable to pay the bills that result from those past decisions. >> every day your response to the secretary's reasoning for supporting and ending that legislation and ending the debt limit. >> far be it for me too contradict and she is right. that you would get rid of it in congress would do its job of deciding. and they do decide congress does decide the budget process how big the budget will be and how it will be sliced up for those activities. so she is right about that.

my point and i'm being dramatic little bit when i say don't think we should get rid of it is to say i think the people are fighting over the debt limit will find another way to have that same fights. i am not sure it would be getting more in less productive. more enlightening for. >> our guest kathleen day lecture from john hopkins business school is also author of a couple of books including her latest book bargain banks, bailouts and the struggle. published in 2019. let's go to calls for kathleen day. we'll go first to gordon and republicanthe line. oh, sorry about that. pool trike gordon implant city, florida go ahead greg spieth three you for taking my call. i guess you all know me on a first name basis now. i love rick scott and they know me on a first name basis. she says he wants to cut

subsidies using my tax dollars to guarantee college loans only 2% of the national debt is college debt. and he said he would be but i have a theory he is not cutting necessity to guarantee the college loans. because without 2098 the bankruptcy bill to use the free market force to force the swamp lobbyist back with josh hawley, john corning, to force down number one of rick scott's desire for the bailout and number two the public service loan forgiveness has a 99% fail rate with conservatives seeks a failure after failure after failure because of the lack of forces. but when i called rick scott's office and told on the directive contract for america

part two, i can draw my own name. and apparently you guys know know who i am. >> are gordon we will let you go there. is there anything you want to respond to? >> this is the point. he is talking about a specific issue, student debt and student loan which is an issue and is an important issue. the debt ceiling obscures that in the sense that it becomes its own crisis. the real issue here in the real problem like mine to talk to each other and some of these issues. an extremism on both sides of the party. in thece difference of opinion

and consumed at we go back to the debt only have a debt ceiling people are thinking debt, debt, debt, debt. the underlying issue is we do have too much debt and how to fix it. t how to fix that, how to curb that how to make sure it doesn't get too big. what is too much debt and what isn't is another complicated questionan. we can afford a lot of debt. there are times when you want to spend money on the coronavirus wasn't appropriate way to do it, to spend money and increase the debt. but again the gentleman caller has brought up the issue that congress isn't dealing with the issues it needsli to. and i don't think getting rid of debt ceiling or having a

debt ceiling does away with that or causes that, is my point. they need to start doing their job. >> host: let's hear from yolanda on the independent line. >> go ahead you are on the air. >> caller: this is what i'm calling for you guys are all talking abou' debt. personally, i believe america isic in debt and the black people of the united states of america built congress, built washington, built the white house literally could repair give reparations for their slavery is working for free, so talk about that janet yellen and your commentator there. thank you for taking my call. but alabama is the poorest state in the union.

[inaudible] so pray for us. >> will go to the other day anyy thoughts? >> again you are bringing up a specific issue that is aside from the issue of the debt ceiling. that is another issue, reparationsu should we have them should we not, how much? all of these are issues that need to be dealt with. and get under this craziness of throwing the ball back and forth. it's more like a hot potato i'm going to make it look like you are raising the debt know i am raising the debt. let's member the way in which isthe debt was most raised recently before covid would was the tax cuts in the last

white house and they significantly raise debt and the deficit and the debt. that do so much for going up to talk about cutting social security and medicare. but then covid happened and we expected that we should have expected that we didn't. someone that came along we could not then go ahead and cut those programs. in fact, if you had any repercussions for covid would have been amplified. so suddenly the game plan of lots cut taxes even though we say this can pay for themselves or an increase the deficit. to cut these entitlement programs. the real issue is the underlying debt and it really

hasn't been it wasn't done responsibly is done in the dead of night it was crazy. we are now having to live with that we have this enormous debt that is way bigger than it was. and again i go back to me have this debate over the debt ceiling i think it does have one redeeming virtue is that we have this huge debt. it's probably the only redeeming virtue but there is some fertility in that. the subject the colors are bringing up our great topics. again they are not about the debt ceiling. >> congressional research says the u.s. debt held by foreign private investors about 40% is

held by private investors. about 59% held by foreign countries held by official foreign investors. what are the biggest holders of u.s. debt which countries? >> it's who you would expect is going to be china, russia, middle east, they are enormous world over people want to have securities. people on the lastri big crisis maybe listeners are too young to remember it seems likee ancient history, 2007 -- 2121 of the jobs of the treasury secretary at the time was to reassure all these foreignnm governments who had treasuries or near treasuries they had more securities issued by freddie. >> and fannie mae. one of that major jobs of the treasury secretary at the time was to show these were safe investments.

it is all the big players around the world. at that time there's an interesting incident at the time. russia actuallyal called china and said something along the lines of why don't we dump all of the debt we have on the market and will really amplify the crisis brewing the economic crisis that is unfolding in the united states. china declined. i think the chinese wisely thought the u.s. evolves so will they. there's such a big holders they have a stake in are not doing some good things. we are kind of all in this together there's a saying bank i'm sorry if the bank lends you a million, you own the bank. the fact is, our fate and their fate are tied when so

many people hold our debt. >> next up is martha who's calling from georgia on the independent line. >> have we ever? been out of debt? i was so shocked when you told me how much we owed. >> we have had a debt up there's never been a year that we haven't had a debt since the founding of the country and alexander hamilton family had to make his argument to george washington that we need to consolidate the debt from the revolution page keep her good credit. what happened is when we did not have a deficit. member the deficit is the annualho shortfall you can have a surplus or a deficit. the last surplus was under clients in last surplus was 2001, i know it's 2001 and i think it goes back for years 2001 and then back for years.

that's the last time we had a surplus. again that is the annual shortfall. >> in those years the debt itself that is correct. that's the last time we were adding yearly to the debts. as in the last couple years the addition to the debt has accelerated. rex question for you on twitter it says most of all most if not all states have constitutions that mandate balanced budgets for the u.s. government has the lender bar tender of last resort meaning and emergencies but is there any advantage of balanced budget amendment to the constitution with prudent spending? >> congress would vote an

exception. if you own a factory if the buy up to buy equipment to buy it, let that be a good thing if it's not too much debt can become overwhelming and we have a lot of debt, how much is too much? again that's another debate. >> go ahead and finish her thought that's fine. >> it's okay i forget now what the question was. the point is we really need to get to how we spend our money. if you get rid of the debt ceiling and have a balanced budget what they would do is to spend that temper of the coin have an argument it's going to be covid would and

i'm not sure that would work and i'm not sure it is necessary. >> let's hear from teddy in louisiana on the democrat line go ahead. >> my question is it seems it is politically popular the politicians cut spending don't cut expenses and borrow the difference. i think that is what's causing some of this. i think the biden administration is trying to pass a tax where the corporation will pay a 15% minimum tax. and also the debt all of the countries of the many countries are in debt is a popular thing. and also could the government go for the negative interest rates are in debt.

and that be the problem? >> negative interest rate is another complicated. i don't think people are necessarily going to pay the government for the privilege of borrowing it to an alice in wonderland type scenario. i am not quite sure sounds like you're saying some that is okay and i grew that most economists would say that is okay. how much is too much is another question right now we are in extraordinary times because we have a huge tax cut and it was probably done irresponsibly. and then you had to have covid on top of it. it's really exacerbated for the situation we're in now is worse than it otherwise would be if congress had not done what it did so irresponsibly

before covid requests a question for you, is there a country or world organization that would benefit if america default on its debt? >> oh sure, a lot of people would like to see us stumble economically absolutely. i'm sure mr. putin would be really happy to seepp that. absolutely. there would be pluses the holders of t the debt could also be hurt. but maybe that is a political calculation they say what happened in our repayment is a see you suffer. the real problem for our economy going above the tree talks is democracy. people often say capitalism helps democracy, but guess what democracy is what you need foree free markets because the region where the benchmark of securities because people trust us and trust her

government. all of us questioning the validity of the election are all underlying not only democracy but economy they're eventually going to undermine our economy we have a military, judicial system all these things in placein that work in the world looks to them because this is a system that works. investors know they have standing in court, investors know it's not perfect of course not. but we have a pretty good lesystem people know they can go to court they can get reasonably accurate information. institutions like the exchange commission which police the market maybe they don't how they could do better. if you underline that you have people and you have us defaulting on our debt you are going to create long-term economic mayhem that will

severely undercut the economy of the united states it's going to raise the costin of doing everything. >> eugene in coventry connecticut good morning. >> debt is now over $29 trillion. when trump came into office it was only 20 trillion. so it only five years it's gone up 35% it is not sustainable. u.s. money is debt based debt means you have the financial mechanism of wall street creates money when big banks make loans that's how money is created. it's hard to understand because the media and the politicians never understand

that. it's a book that will help you to understand it. our debts will never be repaid. when the world realizes that, there is going to be a hogigantic crash. >> will hear some final thoughts. >> we are always repaying our debt and we always have new debt. the gentleman makes a good point, money is a funny thing. what is money they have a buck in the pocket they want to know what it can buy. take on new debt we take on new debt the total keeps

rising that's when you need to say is this an appropriate level of debt, how are we spending our money? do we need to increase our taxes? are people doing their fair share. there's an argument to be made not everyone is paying their fair share. and it's kind the bogeyman you bring in when you say oh there are zombies. the fact is we got to do something about the debt. we need to be more rational and how we spend our money. it be nice if congress to the more extreme elements of our society and started rolling up their sleeves and doing the work. >> john hopkins business school author and journalist, thank you for being with us this morning. >> thank you. >> weekends on cspan2 are an intellectual feast. every saturday and on sunday

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