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c-span 2 and find a full schedule on your program guide or watch any time on book tv.org. here to talk about campaign 2024 and the national debt. mr. galston, you wrote this piece in the national journal. debt crisis is coming. trump and harris are determined to ignore the problem at the country's peril. what is the crisis coming? guest: for your younger viewers, greta, a bit of history may help. at the end of the previous entry, we had four straight years of budget surpluses. we were actually paying down the national debt, which stood at one third of our gross domestic product.

since then, we have been piling up deficit and debt annually. we have added $25 trillion to the national debt over the past two decades. the next decade alone, we are on track to add another $22 trillion for a grand total of $50 trillion. that is not free money, because we have to pay interest on it. by the end of the next 10 years, the interest payments on the national debt will be almost twice what we are spending on national defense, domestic programs, and we will be in effect borrowing money to pay interest on the debt. that is not a sustainable situation. it's not a crisis that overwhelms the system all at once. it is like slow-motion bleeding that weakens the patient and

ultimately leads to death. it is very difficult to make this a front burner issue, but at some point we are going to have to start talking about it. host: what has led us to this point? what major policies over the years you are talking about has led to this situation? guest: well, starting early in the current century, we have had tax cuts that we didn't pay for. we have had spending increases that we didn't pay for. we have had two major economic crises where we had to throw money at the problems. in addition, we have an aging society. an aging society is an expensive society, because it costs for programs such as social security and medicare tend to rise more rapidly than the gross thomistic

product of the united -- gross domestic product of the united states. we have ignored all of those problems. on the tax side, spending side, on the financial emergency side, and the problems created by an aging society. at some point we are going to have to reckon with them. host: why at some point? you alluded to it earlier. what could happen? guest: the number one risk, as far as i'm concerned, is eventually the debt will get so large that lenders, domestic and foreign, will begin to wonder and worry about our capacity to repay it. as a result, they will require significantly higher interest rates in order to compensate them for what they see as the risk of default. at that point we will have a

financial crisis. we had a big problem when interest rates rose as high as 7%. what will happen if they rise to twice that? which they have been in my lifetime? we have i think a serious problem for the future. everything depends on the willingness of both domestic lenders and foreign lenders to keep lending us money at affordable interest rates as the deficit miles -- deficit piles ever higher. host: you said these two candidates are ignoring the issue. they aren't talking about it. they are, though, putting forth policies that would impact deficit. what is the difference between deficit and debt and what do make of their policy? guest: well, a deficit is what happens every fiscal year.

you spend $6 trillion, take in $4 trillion, you have a deficit of $2 trillion. what is the difference between those two? it is financed by borrowing and borrowing adds to the debt. a deficit accrues every year. debt is permanent unless you pay it. both candidates, it is fair to say, have ignore the problem. donald trump has proposals that would make the problem even worse. kamala harris has also proposed policies that would do nothing to reduce the long-term debt and would add a little to it. it is not a perfect symmetry. various analyses, including one performed by the wall street journal yesterday and by the

washington post today, confirm that the trump proposals would be even more expensive than the harris proposals. what i can say safely is that neither candidate would do anything to stop the bleeding. the issue of the deficit was barely touched upon in the presidential debate last week. that is a real sign that neither the candidates nor the journalistic community is particularly interested in talking about this. host: latasha agrees with you. she is a professor at the yale university law school and economist. writing that the big deficit candidate by the numbers. during the first presidential debate in the 1992 election deficit came up 13 times. each candidate was pressed on their substantive plan to bring the u.s. fiscal health into order. the victor, bill clinton, is the only president to have achieved

budget surplus in the last half-century. this week the deficit was referenced twice. why is that? guest: candidates have a hard time getting concerned about issues the american people aren't focused on. i remember the 1992 presidential debates very clearly. among other things, you had a third-party candidate, ross perot, who was barnstorming around the country on that issue. it was one of only two issues that he talked about in his presidential campaign. that forced both of the other candidates to respond. when bill clinton took office, he was very aware of the fact that 19% of the voters had voted for ross perot, reflecting public concern about the budget deficit and accumulating debt.

we haven't seen any dynamic like that this year, or for quite some time. it is an easy issue to avoid because it is a problem that accumulates in slow motion over a great deal of time. it is not something that hits you all at once, like a pandemic or a financial crisis. in my judgment, that makes it a particularly dangerous problem, because it is easy to ignore it until you have a real crisis on your hands. host: he remembers the 1992 debate because he serves as a former policy advisor to president clinton from 1993-1995. democratic caller, you are up first in this conversation. caller: good morning, guys. thank you for taking my call. i tend to agree with a lot of the callers and the sentiment

that has been pervasive in that conversation this morning. i don't feel like the government, no matter who is in there, democrat or republican, cares to represent the country or represent the issues we are facing everyday. the cost of living is impossible nowadays. i think the american people deserve so much better. i think where we are now is like being stuck between -- host: bill galston, what is the solution to address the nation's debt? guest: the caller i think brought our attention to the fact that there are urgent everyday problems that are top of mind for most americans. high prices being first and foremost. i think it's appropriate and inevitable that political

leaders and candidates for office respond to those urgent concerns. they must. at the same time, political leadership means telling people what they need to know. not just what they want to hear. it is going to take bipartisan leadership on the deficit and debt issue to bring it to the attention of the american people in a way that makes it impossible to ignore. this will not happen by itself. the american people i think are unlikely to rise up spontaneously and say "we must do something about this." they need to be persuaded we must do something about this. that is where political leadership is crucial. host: viewer in florida when the by omer generation passes away, will the social

security and debt self-correct? guest: the answer is no, it will not. don't take my word for it. every year the actuaries of the social security system who are responsible for running it and reporting to the american people on how it's doing have made it very clear that based on our current path we are going to need significant revenue increases or cuts to benefits in order to stabilize the system over time. the gap between the two is about 20%, which means if we don't do anything in the next decade that social security payments will abruptly decline by about 20%, which i think would come as a big shock to a lot of people who are relying on the system. at some point in the next 10

years, whatever we do about the broader deficit and debt situation, we are going to have to address a much more immediate and urgent crisis in the social security system. by the way, medicare as well. social security will run out of money in about 2033. medicare will run out of money in about 2036. those are problems we can't ignore whatever else we may do with the whole budget. host: john, north carolina, republican. caller: yes, good morning. thank you for taking my call. you've probably heard that the government should be able to eliminate a lot of the problems with paying out for social benefits, what you were talking

about. it is the baby boomers' decline. the number of payouts goes way down. the number that has been floated around is something like $70 trillion over the next 20, 25, 30 years. i wonder how much validity there is in that statement? and how you feel about it? guest: well, like i suspected just about everybody else listening to this program, i am not a world-class expert on the social security system, but i do read carefully what world-class experts have to say about it. the people who are responsible for managing the system do not

agree with the idea that as the baby boomers die off that the program will stabilize itself. it is true the baby boomers are dying off, but as we -- i am a boomer -- die off, other people will join. the number of people on social security will not go down. it will continue to rise for the next 10 years and then stabilize and rise more slowly, but it will not go down. our population is increasing. we are still an aging society. people who are now 50 are going to start retiring in large numbers within the next decade. i know it would be nice to believe when people like me are dead the system will take care of itself, but nothing i've read suggests that is true. host: your reaction to the news

out of the fed yesterday? goes big with a half cut is the headline. what impact does that have on the conversation were having? guest: first of all, as interest rates the -- interest rates not just for private borrowers trying to get a mortgage, but also for the federal government. that's good news in the short term, but i should also say that the 50 basis point cut, one half of 1%, suggests that the federal reserve board is quite worried about the signs of weakening in the labor market. what we know about a recession, if it were to come, is that it sharply reduces revenues going

into the government and tends to produce higher deficits, which will translate into higher debt. the fed, by moving as strongly as it did yesterday, is trying to ward off excessive weakness in the labor market and prevent that weakness from triggering a recession. everybody hopes that they got it right. host: william in ohio, democratic caller, your next for mr. galston. caller: greta, thank you for taking the call. this is the old 89-year-old true hillbilly. mr. galston, i have been a firm believer that the national debt -- host: william, you are listening to your tv and getting confused. can you mute that television? caller: i can turn it off. host: there you go. ask your question. caller: i am an old dumb

89-year-old hillbilly. i am not educated like these politicians. about the national debt, i have said for years and years that it can't sustain this. i started paying into social security when i was 14. i paid into it until i was 77. i think i am entitled to it, but these corrupt politicians say that that's an entitlement. if the corrupt politicians had kept their hands out of it, the social security would have never went broke. they keep talking about more taxes. we can't withstand another $8 trillion deficit like the great donald put us in. host: let's take the last point on taxes. you were talking about the candidates' plans, were you

referring to their tax agenda? guest: in part i was. let me just explain the situation as i see it. we had a big tax cut in 2017, the first year that donald trump was president. in order to make it possible to cut taxes that significantly while complying with the budget rules that govern the united states government, most of the tax cuts were scheduled to expire in 2025, next year. so, we are going to have a very big debate about whether those tax cuts should be allowed to

expire, which would bring more revenue into the federal government, or whether they should be continued or expanded. both candidates have made proposals that would expand the tax cuts. donald trump has been much more aggressive in that way. there are estimates that his tax proposals would expand the deficit and debt by an additional $5 trillion over the next decade. kamala harris' proposals are more modest and would expand the deficit and debt by half $1 trillion over the next 10 years. but the tax debate next year will be the most important opportunity that the american people and u.s. government are

going to have to begin to change our fiscal course. we haven't had enough conversation about that debate, which i think will dominate 2025. i don't think that there will be a lot of legislation other than the tax debate. that debate will be an opportunity to surface the issues that i talked about in my op ed that other people are beginning to talk about, that auditory awards are beginning to talk about, and we will see what happens. caller: good morning. i have a question. if the social security is going bankrupt eventually, why do we keep getting increases?

that is taking more that away. i would be happy to say that i don't need that race. i know they can't do it because they don't have the paperwork or people to do it, but when i worked, if my company did not have enough money, we wouldn't get a raise that year. i was fine with that. why can't they do that with social security? host: let's take that question. thanks. guest: that is a very interesting question. here's the answer as i see it. there are a lot of people who have worked all of their lives. they didn't make much money. perhaps they had low-wage jobs. they retired and became totally dependent on social security. it was and is their only source of income.

suppose that as prices have risen above 20% over the past 3.5 years there social security payments remained where they were. many of these lower income people would not be able to afford their rent, their heating bills, or grocery bills. for them, it's not something that they could have afforded to do without. it was an absolute necessity. that raises the question of whether everybody should get the same cost-of-living increase regardless of where they are on the income scale. i think the idea that people who don't need the increase might be asked to do without it is one that is worth considering. but as an across-the-board proposal i think that it would lead to a great deal of hardship

and a fierce political reaction. host: carol in maryland, democratic caller. caller: it is tyrell from owings mills, maryland. do you know which administration had the largest cost of living increase? guest: well, i can tell you that inflation reached its peak early in ronald reagan's administration. if you forced me to guess, i would say as a percentage basis it was probably in the early 1980's. but i am probably wrong about that. what is the answer? host: are you still there? caller: yes. it was richard nixon's administration. they got 13%. i got this one a couple of years

ago under joe biden, 8.9%. do you -- what do you think it would probably be this year? guest: well, look, every year is the same -- caller: sorry, next year. 25? host: what is your point? caller: i called about, does he agree with david stockman's book donald trump's more on capitalism? you know, inflation, there was a lot of inflation over donald trump's tenure. we had $8 trillion. according to david stockman, donald trump was responsible for a lot of that inflation, but they tried to blame joe biden for all of this. i just wanted to know his pointt on that. host: mr. galston? guest: well, i have not read mr.

stockton's book. i would distinguish between the rate of inflation, which was pretty low during the trump administration, a bit under 2% on an annual basis as i recall, and the rate of that accumulation, which -- rate of debt accumulation, which was very high under donald trump. donald trump was not interested in a balanced budget. he said several times, and i quote, "i love debt." which is something he learned as a real estate broker that is not as appropriate for the government of the united states as for someone building massive buildings in the middle of manhattan. that's about all i can say about that. host: we will hear from mark next in massachusetts. independent. caller: good morning.

mr. galston, back to the debt issue real quick. isn't it true that japan owns more debt than china? i haven't looked at it recently, but don't we owe it to ourselves and social security, like the number one debtor, or whatever? host: we will take those questions. guest: this is where it gets technical. the debt figures i was citing are what is known as the debt held by the public. the social security system is part of the different category, debt held by the government or debt that is an and kernel transaction between one part of the government and another part of the government. with regard to the public debt, last time i checked 30% was owned by foreign

creditors. i honestly don't know whether japan outranks china or vice versa. two. host: ed, tennessee, independent. caller: good morning. talking about immigrant earlier, the cbo just reported this year that the immigrants add $7 trillion to the economy, and trump's own irs die, $1 trillion is going uncollected in taxes and also we spent 4.3 trillion dollars a year on health care as warren buffett and charlie said.

it health care that is swallowing the profits in the united states. our health care is tied to employment. we have a lot of money that is never talked about and 25% of all the money and health is wasted. can you verify and back me up on any of this? guest: you know, i'm asked to be an expert in many areas. i'm an expert in very few of them. what i can say is that the caller is probably right. we have by far the most expensive health care system in the world. it is swallowing up an increasing share of our economy every year. it's also a health care that generates miracle cures, great advances in medicine and drugs, etc. unfortunately, americans pay the

full price of that and because of price regulations in other countries around the world, the fruits of our medical research innovation are available to them at a much lower cost than it is to us. so yeah, we do have a very broad system problem with health care. various things have been tried over the past few decades to rein in the rate of increase in health care. those efforts have had some success, but it is still continuing to grow every year as a share of our economy, and yes, the caller is probably correct. it is swallowing up a large share of the increase production, the gross domestic product of the country every year, and unless and until there

is a fundamental change in the way health care is delivered and paid for in this country, we're not going to be able to resolve the problem. host:ll has room to

improve. this is 30 minutes. ♪