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So I have some terrible news. We are back in a debt ceiling showdown. For those who havent had my misfortune in covering a bunch of these, let me offer a quick refresher on whats going on here, and let me make my bias pretty plain. I think the debt ceiling is one of the dumbest, one of the most dangerous aspects of U.S. law. What happens here is Congress decides to spend money it passes a Trump tax cuts, or a defense spending bill, or a farm bill something that is going to raise the deficit.

Then, later on, it holds a separate vote on whether to keep borrowing the money needed to pay the bills for the spending that it has already decided to do. And so far in history, it has always taken that vote, because if we dont pay those bills, we default. And if we default on U.S. treasuries, basically taking the single safest and most widely held financial asset in the world and making it risky, we will cause a global financial crisis.

But no one likes voting for raising the debt ceiling, because voting for more debt is an embarrassing vote to take. And so the minority party often uses the debt ceiling to embarrass a majority party over all the borrowing theyre doing. And again, this is why the debt ceiling is stupid, even though that borrowing reflects policies the minority often also put in place when they were in the majority.

But more recently, Republicans have moved beyond using the debt ceiling to embarrass the Democrats and begun really threatening to cause a default unless their policy demands are met. And it wouldnt be fair to say this is all Republicans, but it is enough that there is real uncertainty as to whether or not Republicans even can raise the debt ceiling when they need to. And thats where we are now.

But just because the debt ceiling is inane doesnt mean the debt isnt worth thinking about. Interest rates have gotten a lot higher in the past couple of years. The U.S. has added a lot of debt in the past few decades. Weve gone from federal debt equaling about 35 percent of G.D.P. in 2007 to about 70 percent in 2012 to about 100 percent now.

And its only going up from here. The Congressional Budget Offices 2022 long term budget outlook, which is the projection I use in the episode, it sees debt as a percent of G.D.P. rising to 185 percent of G.D.P. by 2052 though whether we should really trust a projection looking 30 years out, well, well talk about that. So I wanted to discuss this with somebody who doesnt share my priors on all this, an actual fiscal conservative which is different, I want to note very different now than a modern Republican, and someone who thinks it is worth having this kind of debt ceiling showdown.

Veronique de Rugy is an economist at the Mercatus Center at George Mason University. Shes a nationally syndicated columnist, and shes long been arguing for a much lower debt load, a much smaller government, and been a leading advocate of using the debt ceiling to achieve both.

As always, my email, ezrakleinshow@nytimes.com.

Veronique De Rugy, welcome to the show.

Thank you for having me.

So lets start in the news. We seem to be entering our newest, latest, greatest debt ceiling showdown. Youve backed, in the past, the usefulness and importance of using the debt ceiling to force budget negotiations. I am I think more, to put it gently, skeptical of that. So make the case to me that the debt ceiling is more than, like, a disastrous mistake of American governance.

So I mean, historically, right, the debt ceiling has been used by both sides to get some deficit reduction bills or proposal through. So for instance, since the 80s, the eight largest debt reduction bills that have been adopted all were adopted through the debt ceiling. So you know, Gramm-Rudman, the two of them during the 80s, but also the Bush tax hike in the 90s, and the Clinton tax hike in 93, and then the Balanced Budget Act, and we can go on and on and PAYGO and, of course, the Budget Control Act.

These are all pretty significant budget reduction measures that both sides have attached to the debt ceiling. I was particularly involved in this idea of using the debt ceiling in 2011. Ive lost some of my commitment to the idea. I mean, its one of the very few opportunities, unfortunately, because our budget process is broken, that both sides have to really negotiate matters of the debt. But it should be an opportunity to be able to really make that case that we need to do something.

That said, I think kind of what the more of these standoffs we have, the more investors and the financial sector and other parties are going to be worried that this is going to be the time where we go over. And we cant. We need to raise the debt ceiling, and we need to raise it on time. I think its extremely important.

It just strikes me, then, as a slightly odd position. On the one hand, I take your point that it has been used as a mechanism to get people talking about the debt. And on the other hand and I think this is, most people will date this to 2011, and so would I. As the Republican Party became more extreme in certain ways, as the parties polarized into their modern forms, this idea that maybe this would not be used to embarrass the other side and get them to talk to you, but actually end up in a breach and I think it could happen in 2011. I think it very much could happen now.

And the reason people like me find this appalling, I think, is its consequences are really dramatic. I mean, as youre saying a minute ago, we really dont want to breach so Moodys Analytics says a short-term debt limit breach could lead to nearly 2 million people losing their jobs. Brookings thought that a short-term debt breach would lead to more than $750 billion in higher federal borrowing costs.

The Council of Economic Advisers at the White House, they modeled a longer term default, and they found something more like the Great Recession happening the stock market falling 45 percent, unemployment jumping five percentage points.

So it just seems that passing, functionally, a grenade back and forth for no reason, hoping people use it to negotiate, as opposed to actually letting the grenade go off, I dont know. I dont understand why we would put ourselves under that level of risk continuously.

So the latest drama about the debt ceiling is a big clue that we have a problem. People can disagree on what the nature of the problem is, but I think its unfair to put this entirely at the feet of the Republicans. I mean, lets not forget that the Democrats have played with the debt ceiling a lot too. During the Trump years, and the Democrats negotiated tax increases to go with the debt ceiling. And still, a majority of them didnt vote for the debt ceiling.

I mean, I know right now it feels so dramatic. And I think its because when the Republicans do it, what they want is they want spending reduction, which is probably more difficult to get through than spending increases. But I think its kind of unfair to claim that its just one side. Both sides have used the debt ceiling to pass budget reductions, with at least their version of what debt reduction would look like.

And thats part the fact that our budget process is one thats broken, for lack of a better word. Its kind of a winner takes all. Basically, if youre in the minority, youre not even really a participant on whatever the budget is going to be. And the only moment where you may have a voice is during this debt ceiling process. So we should have a conversation about getting rid of the debt ceiling. But for better or worse, this is one of those moments where we have a conversation about it.

But I have mixed feelings about this, in the sense that I really hope that the outcome will be a good one. Its worth noting that of 70 percent of voters and 58 percent of Democrats believe that the president should negotiate and find common grounds, including spending cuts. But the good news to me is that markets seem to be pricing the risk of a default at 4 percent, which is less than in 2011, which was 7 percent. So I think theres still a lot of hope but give it another week, and those numbers could change.

Let me agree with part of this, and disagree with part of what you just said. So the part I agree with is that, certainly, Democrats have messaged around the debt ceiling. And I mean, you go back, Barack Obama has voted against debt ceiling increases. Its always been something the opposition party uses to embarrass the governing party. I think there are two differences, though. One is I would say, Democrats fundamentally message on the debt ceiling, and Republicans fundamentally leverage through the debt ceiling.

And that wasnt always true. I think thats a kind of post 2010 thing. But I also think the reason for that, and the reason I am personally afraid right now, is that the differences between the two the structure of the two parties the Democrats have a much more internally coherent congressional caucus. And so at the end of the day, the Democrats can deliver whatever votes they need to deliver to make sure the debt ceiling goes up. And thats why we didnt see a huge danger around this in the Trump years, or in the George W. Bush years, or anything else. It was never in doubt that Nancy Pelosi or Harry Reid or Chuck Schumer or whoever it was at that moment could get the Democrats they needed to vote for the debt ceiling. And the dangerous thing is thats not true with Kevin McCarthy. I mean, it also wasnt true, necessarily, with John Boehner, but its really not true with McCarthy, given all that he gave up to become Speaker, given the power of one member of his conference to call a vote on his speakership.

The fear is not so much that in a perfect world, John Boehner and Barack Obama couldnt come to a deal, or even Kevin McCarthy and Joe Biden couldnt come to a deal, but that Joe Biden, Kevin McCarthy and the Freedom Caucus cannot jointly come to a deal. And that seems to me to be whats pushing us into a more dangerous place, not the existence of the thing itself, which if the parties are strong enough, they can simply use it cosmetically, but the existence of the thing combined with this structural breakdown of the Republican Partys ability to control its own members and deliver votes on key issues.

No, I mean, I dont disagree with you. I think theres a real risk there. And to be honest, Im even surprised that they were able to put a bill on the table. So maybe thats kind of reassuring that for the debt ceiling, theyll be able to unite. But we can never be sure, right? But this is a risk. Lets agree that this is a real risk, and we wont know until we know how big of a risk it is.

But this is a risk that could be aggravated if the Democrats dont come to the table, right? I think kind of now, its time for both sides to sit down. The president has put out a budget with roughly $3 trillion in savings. The Republicans put out a proposal with $5 trillion, this is over 10 years. Its time to negotiate. Its time to come to the table. And so its not Im not disagreeing with you. But I think that if they dont start negotiating right now, this makes all your worries even more salient, it seems.

So were talking on Wednesday the 10th. Yesterday, there was a meeting between President Joe Biden and Speaker McCarthy and the other congressional leaders, although I think those are the real two key members at the moment on this. And my understanding, having reported a bit on the meeting and theres been a lot of public commentary on it is they all came, they all said their platitudes. And now, the staff is going to begin actually trying to negotiate, and to see what sort of common ground there might be. And I should say the Biden administrations position is theyre not negotiating on the debt ceiling. That has to be clean. Theyre negotiating simply on the budget. But what did you take from that meeting?

I took pretty much the same as you, except that I think that the Biden administration is showing some signs that they are going to negotiate, one way or another. I dont know. Maybe Im wrong. I mean, politics is not my thing, and I dont know how external pressure works on politicians ever these days, especially. But I have a feeling that theres going to be a lot of pressure for, really, both sides to get it done, to find a solution.

And were going to see, behind closed doors, probably more willingness on both sides to negotiate. I just cannot imagine that either side is serious about the risk of going over the limit. Ive been wrong many times before, so maybe Ill be wrong this time around. But I took it as kind of encouraging, just the fact that they said that the staff is going to talk. And I think, in the end, they will come together. The U.S. for all its drama, the last 15 or 20 years, theyve always come together in the end and delivered.

So I wish they did that more during the regular process, but fingers crossed, right?

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So I want to roadmap this in, because I want to talk about the proposals on the table. But before we do that, I want to talk more broadly about the fiscal picture, because you can believe whatever you believe about the debt ceiling. And as Ive said, Im skeptical of it. But theres a different question about whether or not were in a good budgetary position going forward. And so lets talk a bit about the more long term fiscal picture. And I dont want to do the very long term. The 30 year stuff, I think, is not its extrapolating too far. But how would you describe it over the next, say, 15 years? What does it look like to you?

It looks very red. You know, I mean, this year, were on schedule to have a deficit of $1.5 trillion. Thats over 5 percent of G.D.P. We are going to be paying in the next 10 years interest on the debt, because thats the thing about deficits, they cost money. And in a time where interest rates are going up, it costs even more money. So I think its something like 17 percent or 20 percent our revenue are going to be used to pay for interest on the debt.

And at 15 years, I dont know. I know the 30 years number and the 10 year window, but and our deficit is going to be quite big. Its going to be $20 trillion. And that means the debt is increasing that much. Thats in the next 10 years. I know you dont want to talk about the 30 years, but we know there are things that are coming towards us in the next 30 years actually, in the next 10 years, with Social Security and Medicare trust funds drying out. Theres another fight coming up about what to do about this.

But if you, as C.B.O. does, plan on all these benefits not being cut, taxes not being cut, and basically, all the money to fill the gap being covered by general revenues, thats $114 trillion of deficit spending in the next 30 years. Its a lot of money.

So I was spending some time, because Im an interesting person who knows how to have fun, with the Congressional Budget Offices 30 year projection. So lets talk we can talk about why I become skeptical in the 30 year, but maybe because I think first of all

Oh, you should be skeptical, because they are a very rosy scenario, and theres so much we dont know.

Well, theyve often been pessimistic too. I mean, theyve often well, well talk about that a minute. Let me first give the audience some baseline here. So if you look over the next 30 years, they break it down into their averages for each 10 year set. And Ill just read a couple of these out. They look at Social Security, which in 2022 they estimated would be 4.9 percent of G.D.P. And then over the next 10 years, they think thatll be 5.5 percent of G.D.P. Then, over the 10 years after that, 6.1 percent of G.D.P. then after that, 6.3 percent of G.D.P.

And I take that one pretty seriously, because thats a kind of mechanical, more people are retiring situation. Then, you have major health care programs like Medicare. 2022, thats 5.8 percent of G.D.P., and then in the first 10 years, 6.2 percent of G.D.P., second 10 years, 7.6 percent of G.D.P., and then the third 10 years, 8.6 percent of G.D.P.

But now you get to interest, and this is particularly something I wanted to talk to you about, because I was struck by how much of their long term budget worries are about interest payments rising, particularly if we have higher interest rates.

So right now, were paying 1.6 percent of G.D.P. in interest over the next 10 years. They think thatll average out to 2.6 percent, then the 10 years after that, 4 points of G.D.P. in interest, and then the 10 year after that, 6.2 percent of G.D.P. in net interest payments. So they see that rising much faster, for instance, than even health care costs, which have I think in past documents like this been the real driver.

So talk to me a bit about that interest rate picture, because I was really struck how much of their projections are riding on what you think is going to happen to interest rates.

Well, yeah, I mean, the whole story is about interest rates. But I actually think that there is a non-zero probability that their story is rosy, actually. So obviously, youre right to say that theyve been pessimistic about interest rates, certainly the last 10 or 15 years, where theyve projected interest rates growing in a way that they really havent, right? But no one knows how long the current hike in rates is going to stay.

And Ive been trying to think a lot about whether I think that the structural forces that have kept interest rates low in the last 20 years are going to still prevail. And Im willing to actually concede that, theres a very possibility that, eventually, were going to go back to very low rates. I think its also worth trying to think about the fact that there are forces that are possibly raising interest rates, too.

And I think kind of its possible that C.B.O. is kind of mechanically assuming increasing interest rates. I think that theres a possibility that they would be overly optimistic. So for instance, when you look at the literature on the impact of debt to G.D.P. on interest rates so N.B.E.R. has a bunch of papers, Brookings, the C.B.O. I went and looked at the range of projection that they have.

And obviously, some of these papers are empirical, some of these papers are just theories. And so Ive come out of reading this thinking, for every 1 percent increase of debt to G.D.P. ratio, you get between two and three basis point increase in interest rates. So what does that mean? Lets assume that the debt to G.D.P. increases, as projected by C.B.O., by roughly 100 percent. Youre getting an increase in interest rates somewhere between 2 percent and 3 percent, and thats above whatever interest rates will be.

And thats significant at our level of debt. And the C.B.O., I was kind of looking at how they were projecting their numbers. And I talked to my colleague, Keith Hall, who used to be the C.B.O. director. And theyre not fully integrating this literature onto their projections.

So what Ive learned the last 20 years is that the budget hawks have been really wrong, but also, people who have said that interest rates would never go up, theyve been wrong too. I mean, they maybe you can say that theyve been wrong on a much shorter period of time, and well know soon enough. But I think its not realistic to count on low interest rates to never go up. If they never go up, maybe we dont have a debt problem, as long as the government has a plan to repay it eventually, or at least that people believe that the government has a plan to repay it. But that interest rate risk, I think, is one that is worth considering.

I mean, I do think thats right. So let me talk a bit about the C.B.O. picture here, and then come back to something where I think you may well be right that theyre optimistic. So to get at why people have begun I think people, particularly on the left, have begun to mistrust C.B.O. predictions here.

So in April, C.B.O. itself and good on them for doing this they released a report retrospectively evaluating their budget projections, so not interest rates here, but budget accuracy going back to 1984. And when they looked at it, they found, the C.B.O. overestimated total outlays in its budget year and six year projections about 75 percent of the time.

So generally, they thought we would spend more than we actually did. And C.B.O. also looked at their projections of net interest, and they found that over the 10 year time frame, their error was about 106 percent, so it could go really wrong.

Yes.

But I think something Im worried about, and Ill cop to this is, that I think theres a kind of complacency among liberals now who, having watched the budget hawks get this wrong a bunch of different times, kind of only imagined that the error can go in one direction, that its always going to be how bad the budget picture is is overestimated. And I think its pretty easy to imagine ways we could underestimate it. We could have a big recession, or more than that. That would make the government spend a bunch more. Right now, if you look at projections on defense spending, I dont think they are counting for our posture against Russia and our posture, which is rapidly getting more hard line, towards China very hard for me to imagine in that world, defense isnt going to go up in the coming decade, when I look at the politics in Washington right now.

And so its not hard to imagine ways we could both spend more, or need to spend more, or the economy could be weaker than we want it to be or as you say, maybe inflation is harder and harder to get under control, and so they just need to keep interest rates higher for longer. So I do think its important to take seriously the idea that C.B.O. can be wrong in either direction.

Yes.

And the fact that theyve been wrong in, I think, assuming the budget picture was worse than it turned out to be recently doesnt mean they cant be wrong in assuming that it is better than it will turn out to be next time.

I agree with you. I will say this. So the question is, looking at the last 40 years, this is a very unusual time in the history of the U.S., especially the last 15, Id say, where you had that window for the C.B.O. study, like, went from peak interest rates and weve havent had interest rates at that level ever since, but also a long era where, effectively, we didnt have inflation.

So the question is, is this representative of what was before, or what will come? I mean, the same thing, by the way, that you said about being complacent about interest rates applies to a lot of economists with inflation, right? I mean, economists kind of gave up on the idea that inflation could ever go up. It was kind of, like, inflation was 2 percent if you could even get it there. Im much more careful now.

Im trying really hard, much more than I used to, to kind of make a difference between what I think credibly can happen and motivated belief, if you want. Ive been wrong a lot in assuming that the debt was going to become unmanageable, that interest rates were going to go up, that we would have inflation. Ive been wrong enough times that Im open to always being wrong.

That said, were entering a time of uncharted territory, because we havent had these levels of projected debt. Again, there could be, I dont know, an enormous discovery or something that we cant foresee. And it could go in the other we know were going to have emergencies. We know we could have a war. We know we can have all the but the reverse could be true, right? We could something really great can happen, and we can grow really fast, and the things unforeseen. But the truth is that, basically, no one knows.

One thing I can imagine somebody whos more of a modern monetary theorist saying here is, look, this is all fake. The government can print the money it needs to pay off whatever debts it incurs. The only constraint on the economy is the real constraints of how many people we have, how much capital stock we have. We can do anything we can actually do. But we can also afford to print money to pay off our debtors.

So how do you respond to that kind of thinking, which I think its fair to say, has become a lot more common in the past couple of years?

I mean, I dont know if anyone is saying this right now, because weve actually seen in the last few years that its not really fake accounting. I mean, when you get a lot of spending into the economy, some money printing way above what was necessary to close the output gap, and you compound this with bad luck right, the war in Ukraine and you can see the inflation that were getting.

So theres a moment where the real world actually sends a signal. I dont think its possible to just print money, spend as much money as we want and just expect that nothing will happen.

Let me ask you about inflation here, because on the flip side of inflation raising interest rates, it also inflates away the debt. If you owe 100 bucks, and inflation goes from to 2 percent to 10 percent, that $100 is in real terms worth less. So something youll hear from the administration, from liberal economists, is the thing to care about here is real interest payments, which is to say, interest payments adjusted for inflation. And those have looked pretty low. Theyve been staying pretty stable.

Now, the C.B.O. is expecting here that we get inflation back to about 2 percent, but how do you think about the inflation picture? Because from one perspective, maybe having more inflation is good for the debt.

Well, its good for the debt if having inflation is not bad for a lot of people, right? Right now, there are a lot of people hurting because everything is more expensive. And if you are not, for instance, a Social Security beneficiary, where your benefits have been indexed to inflation, or theres just a lot of stuff thats price is going up, but your wages are not going up as fast, I mean, real wages have gone down. So thats not great.

Then theres also the fact that when you have inflation, unless the Fed gives up entirely, which I dont think it will, you have to raise interest rates. And in a world where so many people have built their businesses and our financial system, and everything else is based on this idea that interest rates will always be low, we already see in the banking system that it causes some real distress, right?

So I think that the idea that inflation could be just used for the purpose of reducing the debt, as if thats a great idea I mean, dont get me wrong. Carmen Reinhart and her co-authors actually looked at the way that governments throughout history have actually addressed reduced debt to G.D.P. ratio. And in a surprise, inflation was the big component of that. So it has certainly been a way, but it has consequences.

But one of the things that I know is, like, lets assume that C.B.O. is right about that $114 trillion in deficit that we need to do in the next 30 years. Ill ask you, whos going to buy this debt? $114 trillion, right? I mean, the Japanese and the Chinese have reduced their holdings to $2 trillion. I mean, foreign investors used to hold 50 percent of our debt. Now, its like 30 percent. Do we really believe that domestic investors are going to step in to buy all this? I dont know.

I mean, this to me is a real risk of having a really high debt. Its like, effectively, youre taking a risk.

Well, I think the other side youll hear on this is two things. So one, demand for U.S. treasuries has been really strong now for a long time. People have all kinds of reasons for that, but people want them. They seem to want more of them, and more of them, and more of them. And so we havent had a problem selling them. But if we did, what we would do, I think, kind of mechanically, is to raise what they pay. So I mean, that would mean that our debt does get more expensive for us, right? Our interest payments go up. I think thats probably part of what the C.B.O. is projecting in here.

And so something youll hear people say if they are not in favor of aggressive action on the debt right now, is look, if that begins happening, then we can begin dealing with it. We can always begin making changes, or more serious changes at that point, but this idea that we have to be making changes now because were worried about the uncertain 20 or 30 year future when the changes we make now will hurt people now, whereas the future, well see. If we have to do something then, well do it then. It doesnt make sense to treat it in this way, that were trading the possibility of future problems for the certainty of current harms.

How do you respond to that line of argument?

This is a possibility, like in the scenario where interest rates go back to being low and inflation returns to its target and a lot of the conflicts that we see right now go away, and the federal government signals that it has a plan to repay the debt under that scenario, it may not be a problem at all to go to 200 percent of G.D.P. in debt. Its a possibility, absolutely.

The problem that I see is that if this doesnt pan out, this notion that we will have all the time that we need to react and to take the measures that are needed, thats unlikely. Remember that in those C.B.O. projections, again, they dont forecast wars, recessions, a big recession, pandemic, what have you, right? Its like peace, prosperity, and relatively low interest rates higher, but relatively low interest rates.

I dont foresee that we are going to have any real problem during a normal time, right? Its going to all happen during an emergency. And Ill say, like, from a prudential perspective, in theory, we should be thinking about addressing some of our debt problems when times are good, where the economy is growing, where its easier to collect revenue and less spending is needed, so we can jack up spending and do what we need to do when times are hard.

I mean, dont you think that the last three years, in a way, offer a very small example of what failing to assess for any risks when it comes to the level of our debt and by that I mean, like, inflation going up, and interest rates, and having to fight inflation with increasing interest rate, and creating instability in the banking system, and all of this. I mean, this can happen really quickly, when a few months before no one expected it.

I do think thats a lesson of this era but so let me then, because youre sort of moving between having a lot of uncertainty, but also making this point about precautionary principles so let me ask you more concretely: What path you would like to see us on? So when you look at that C.B.O. document, over the next 10 years, they project an average of 5.1 percent of G.D.P. in deficits annually. What would you like to see that number at?

And so it depends on what were trying to achieve. Are we trying to reduce our debt to G.D.P. ratio? I mean, with all the caveat that, fundamentally, debt to G.D.P. ratio is not theres not a magic number, which I, by the way, used to believe somehow. I didnt know what that number was, but you hit a certain debt to G.D.P. number, and then boom, everything goes to hell.

But lets say Olivier Blanchard, Jason Furman and Larry Summers, right, their whole research, even though they have different approaches, is to say, ultimately, debt doesnt really matter because under some conditions, we can reduce the debt to G.D.P. ratio. So if thats the goal, theres a lot of things that you need. And I think its a decent goal. I think kind of reducing the level of our debt, increasing our ability to pay it back, is a good goal.

I think youre slightly overcomplicating this. I mean, just give me a number of what you think annual deficits could run at that would not scare you for the fiscal future of the country. I mean, you think it is worthwhile to have a negotiation with the debt ceiling hanging in the balance to reduce the deficit, year on year. Surely, you have something in your head by which you would say, that was successful, we did it. Like, that was worth running this risk because we got to this outcome. Like, what outcome would be that for you?

Well, I can tell you right now what Id be happy about is that we dont negotiate the Social Security cliff in 2033 when its happening. This is how much Ive lowered my ambition. So the debt ceiling is just an opportunity to actually talk about debt problems. I think we were way more like in the 1990s, where that could be used as an opportunity to actually have a conversation and come to the table, as opposed to this drama which is just horrendous.

And I think I really hope no one is considering even trying to breach the debt ceiling.

But they are considering that. Thats why were having a negotiation over the debt ceiling.

Do we know that? I mean, are we sure?

I just can only listen to what people say, but thats why, like, Im trying to push this question of a number. I do think its worth asking the question of, if were doing this, what makes it worth doing? And I take your point. Well talk about Social Security and Medicare in a second. But one thing that I have noticed is people are being very unclear about what theyre actually trying to achieve here, as opposed to simply less deficit.

So I look at the Republican offer. We can talk about it, but its clear to me theyre trying to achieve a rollback in Biden administration policies. Biden has a budget that would cut the deficit by a couple trillion, mainly, though not exclusively, through tax increases. But Id like to hear people say, this is where I think we need to go. If we get above this, it wasnt successful. If we get here, beneath it for deficits like, I will be happy. Like, I, Veronique de Rugy will stop telling people theyve done a bad job on this.

So let me tell you, like, I dont think the Republicans demands are totally outrageous, if only because discretionary spending in the last two years has increased by 23 percent, so the idea of rolling it back some doesnt seem as outrageous as what most people have said it is. That said, this is just the beginning, in my opinion, because this does nothing to address the long-term sustainability of our debt.

I think the only thing we need to do is not so much to pay down all the debt, or to significantly reduce change, basically, the path were on, I think, is important. We need to make it sustainable. What sustainable looks like is do I know exactly? But I think reducing the risk that we face when we have an enormous debt, if interest rates were going to go up and interest consuming a lot of our revenues, I think thats risky.

And so can I tell you exactly what debt sustainability looks like? I think it means finding a way so that we dont face a situation where the deficit increase is so enormous under a fairly rosy scenario where nothing bad happens.

But you dont have in your head a deficit as a percent of G.D.P. number for that? There isnt like, for you, if we got it to 3 percent a year, youd be happy?

I mean, in my ideal world, it would be even lower. But I think that 2 percent to 3 percent have you been following whats going on in France?

A bit. Not enough that Im an expert, but

So Fitch downgraded Frances debt. And its not catastrophic, but it will have consequences for a country that has already a problem. And the arguments that Finch used were interesting.

The first one was that the deficit was over 5 percent, right? Im not saying that the U.S. is exactly comparable. We have a lot of things on our side that France doesnt have. But ours is not far behind. And certainly, by the end of the decade, it will be there again, according to C.B.O., thats what we have to go with.

It also said that to G.D.P. ratio was like 111 right, this is where were going to be at the end of the decade according to C.B.O. And one of the things that was also interesting that makes the case for you about the debt ceiling being dangerous in my opinion, the debt ceiling is dangerous in more than one way. Its not just the risk of a default, but its also the fact that it actually shows a lack of unity and increases the probability that the country is not going to come together, that politicians are not going to come together to do the right thing.

And maybe and these tensions actually could be signaling bad times for the U.S., and a lack of trust for the U.S. And thats one of the things that Fitch said about France, was that the tensions and the protest and the fighting were a sign that the country just didnt have it together, and certainly wasnt going to have the political ability or the will to do what it took to control its debt.

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Opinion | A Libertarian and I Debate the Debt Ceiling - The New York Times