PARIS?
>> BRANDIS, THE U.S. ECONOMY IS
BACK SOMEWHAT IT GREW AT MORE
THAN 6% IN THE FIRST QUARTER OF
2021 AS THE COMBINED IMPACT OF A
MASS VACCINATION ROLL OUT AND
FEDERAL STIMULUS CHECKS
TRIGGERED A SURGE IN CONSUMER
SPENDING.
THIS AS PRESIDENT BIDEN TALKED
ABOUT MASSIVE NEW FEDERAL
INVESTMENTS AND INCREASED TAX
RATES ON HIGH INCOME EARNERS.
HOW LONG CAN THE ECONOMIC BOOM
LAST?
JOINING US ARE ED STUART
PROFESSOR EMERITUS OF ECONOMICS
AT NORTHEASTERN UNIVERSITY.
AND MIKE MILLER.
USGDP GROWING AT 6.4% DOES THAT
OFFICIALLY MEAN THE COVID
TRIGGERED RECESSION IS OVER?
>> WELL, IT TOOK US WITHIN 1% OF
THE PREVIOUS PEAK WE HIT IN
FEBRUARY OF LAST YEAR.
I THINK THAT IS CLOSE ENOUGH TO
SAY THAT WE HAVE FULLY RECOVERED
IN TERMS OF GDP.
THIS WILL GIVE THE NBER WHO
DATES THE TIMES OF THE PEAKS AND
THE TROUGHS A CHANCE TO SET THE
DATE FOR THE PANDEMIC RECESSION.
WHICH I THINK THAT WILL BE
SOMETIME IN LATE SUMMER EARLY
AUTUMN OF 2021.
>> THAT APPEARS WHEN THE ECONOMY
WOULD HAVE BOTH --
AUTUMN OF 2020.
>> THIS IS DRIVEN BY THE
REOPENINGS AND THE STIMULUS
PACKAGE BUT WHEN THAT MONEY RUNS
OUT, WHAT HAPPENS?
>> WELL, THE GOOD NEWS IS THAT
AND THIS IS ONE OF THE THINGS
THAT I DON'T THINK A LOT OF
PEOPLE UNDERSTAND, YOU SEE THESE
LARGE NUMBERS OF 1.9 TRILLION, 2
TRILLION AND MOST OF THAT MONEY
IS PHASED IN OVER A FAIRLY LONG
PERIOD OF TIME IT IS NOT JUST A
ONE SHOT.
A LOT OF THE STIMULUS MONEY FOR
EDUCATION AND STATE AND LOCAL
GOVERNMENTS IS PROGRAMMED TO
LAST FOR AT LEAST THE REST OF
2021 AND WELL INTO 2022.
THE INFRASTRUCTURE PROGRAM THAT
IS YET TO BE PASSED I SAW AN
EIGHT-YEAR TIME HORIZON FOR
THAT.
IT'S NOT GOING TO RUN OUT
ANYTIME SOON AND THERE ARE ALSO
REALLY INTERESTING NUMBERS IN
THE LATEST GDP DATA THAT CAME
OUT IN THURSDAY AND THEN ALSO
THE PERSONAL INCOME NUMBERS THAT
CAME OUT FRIDAY SHOWING HOW MUCH
EXTRA INCOME AMERICAN CONSUMERS
HAVE AND HOW MUCH OF THAT THEY
SAVE.
THERE IS A LOT OF CONSUMER
BUYING POWER THAT IS STILL IN
BANK ACCOUNTS AND SAVINGS
ACCOUNTS THAT ARE THERE FOR
CONSUMERS TO SPEND OVER A FAIRLY
LONG PERIOD OF TIME TO COME.
>> A LOT OF PENT UP DEMAND AND
POSITIVE INDICATORS.
MIKE MILLER, WHAT SECTORS ARE
DOING BEST?
WHAT SECTORS ARE LAGGING?
>> WELL, WE'RE SEEING THE DRIVER
OF THE ECONOMY IS THE CONSUMER.
FOR SEVERAL REASONS.
THERE IS A LARGE AMOUNT OF PENT
UP DEMAND FOR CONSUMER DURABLES
THINGS WHICH LAST MORE THAN
THREE YEARS.
THAT'S CARS, APPLIANCES AND
FURNITURE AND THERE WAS A LOT OF
BUYING OF THAT HAPPENING.
AND THEN THE HOUSEHOLDS RECEIVED
A FAIR AMOUNT OF MONEY FROM THE
FEDERAL GOVERNMENT THE INCOMES
EXPLODED WITH THE $1400 CHECKS
TO A LARGE NUMBER OF HOUSEHOLDS
AND THEY ARE BEGINNING TO SPEND
SOME OF THAT.
A LOT OF THE SPENDING ON LEISURE
AND HOSPITALITY THAT WAS NOT
DONE DURING THE PANDEMIC THAT IS
GONE FOREVER BUT PEOPLE NEED THE
WASHERS AND DRYERS THEY WERE NOT
BUYING.
THE HOUSEHOLDS ARE BUYING.
THERE IS A BOOM IN HOUSING AND
THEN IF YOU LOOK AT IN TERMS OF
GDP THE AMOUNT OF MONEY SPENT
FOR NONDEFENSE GOVERNMENT
SPENDING THE NUMBER WAS UP 44%.
THAT IS ALL THAT REDISTRIBUTION
THAT OCCURRED WHICH HELPED
STIMULATE THE HOUSEHOLDS TO
SPEND MORE.
>> AND IT COULD BE MORE AS ED
STUART ELUDED TO.
LET'S HEAR WHAT PRESIDENT BIDEN
SAID ABOUT THE INFRASTRUCTURE
PLAN AND THE AMERICAN FAMILIES
PLAN AND A PLAN TO RAISE TAXES
ON HIGH INCOME EARNERS TO PAY
FOR IT.
>> IT'S ABOUT TIME WE START
GIVING TAX BREAKS AND TAX
CREDITS TO WORKING CLASS
FAMILIES AND MIDDLE CLASS
FAMILIES INSTEAD OF JUST THE
VERY WEALTHY.
AND HERE IS WHAT THE AMERICAN
FAMILY PLAN DOES NOT DO.
IT DOES NOT ADD A PENNY TO OUR
DEFICIT.
IT'S PAID FOR MAKING SURE THAT
CORPORATE AMERICA AND THE
WEALTHIEST PAY THEIR FAIR SHARE.
>> YOUR PHILOSOPHIES YOU MIGHT
BE DIVERGENT ON THIS, FIRST, ED
STUART THE COMBINATION OF THIS
SPENDING ON INFRASTRUCTURE AND
COMMUNITY COLLEGE, CHILDCARE,
COUPLED WITH SLIGHTLY HIGHER TAX
RATES FOR HIGH INCOME EARNERS
AND CORPORATIONS HOW WILL THAT
IMPACT THE ECONOMY?
>> I THINK OBVIOUSLY AS YOU
ELUDED I THINK IT'S GOING TO BE
VERY, VERY POSITIVE.
BECAUSE FOR MANY, MANY YEARS NOT
JUST THE TRUMP ADMINISTRATION,
BUT BACK 10 OR 15 YEARS, THE
AMERICAN ECONOMY HASN'T INVESTED
IN CLASSICAL INFRASTRUCTURE,
ROADS, BRIDGES THE AMERICAN
ASSOCIATION OF CIVIL ENGINEERS
SAID WE ARE SEVERAL HUNDRED
BILLION DOLLARS DEFICIENT IN
SPENDING ON WHAT EVERYBODY
AGREES IS INFRASTRUCTURE.
AS I POINTED ON THIS SHOW MANY,
MANY TIMES, IN THE UNITED STATES
WE HAVE ONE OF THE SLOW WEST AND
MOST EXPENSIVE INTERNET SYSTEMS
IN THE WORLD.
SO WE NEED LOTS OF INVESTMENT IN
REDUNDANT AND HIGHER GRADE
COMMUNICATIONS TECHNOLOGY.
THE PEOPLE IN TEXAS WILL TELL
YOU THAT WE NEED A LOT MORE IN
TERMS OF POWER GRID AND WATER
SYSTEMS AND THEN OBVIOUSLY FOR
THE NEW GREEN TECHNOLOGIES AND
ELECTRIC AUTOMOBILES, WE NEED A
MUCH MORE ROLLED OUT SYSTEM OF
CHARGING STATIONS AND ELECTRICAL
POWER.
>> I WANT TO BRING MIKE MILLER
IN ON THIS.
WHAT ABOUT THAT TAX PIECE, MIKE
MILLER?
AND THESE RATES FOR THE MOST
PART WOULDN'T EVEN MATCH WHAT
THEY WERE PRE2017.
COULD THAT SLOW THE ECONOMY?
>> WE HAVE TO UNDERSTAND THAT
CORPORATE INCOME TAX IS LESS
THAN 9% OF THE REVENUE OF THE
FEDERAL GOVERNMENT.
INCREASING IT IS NOT GOING TO BE
A MAJOR INCREASE IN THE REVENUE.
I THINK THE PRESIDENT HAS TO
REALIZE IF THE AMERICAN PEOPLE
HAVE DECIDED OR WILL DECIDE IN
THE NEAR FUTURE WE WOULD LIKE TO
BE LIKE SCANDANAVIA, THE ONLY
TAX STRUCTURE THAT CAN DEAL WITH
THAT IS NOT TO TAX THE RICH
THERE IS NOT ENOUGH MONEY THERE.
THERE WOULD HAVE TO BE A LARGER
BASE IN THE MIDDLE CLASS PAY
RATES OF 40-50% OF THE INCOME TO
THE GOVERNMENT LIKE IRELAND AND
SCANDANAVIA.
MAYBE THAT IS WHAT THE AMERICAN
PEOPLE WANT AND IF SO WE CAN
CHOOSE SO BY PICKING
REPRESENTATIVES.
I AM NOT A FAN OF THAT.
THERE JUST IS NOT ENOUGH MONEY
WITHIN THE RICH TO PAY FOR ALL
THE PLANS WE HAVE.
>> ED STUART YOU MIGHT DISAGREE?
IS THAT HOW YOU SEE IT?
THERE IS NOT ENOUGH MONEY TO
TAX?
>> YOU ARE AN EXTREMELY PER
KAYCIOUS MAN.
>> I DON'T KNOW IF THAT WORD
MEANS.
>> SHARP SIGHTED.
YES.
YES, I THINK THERE'S MORE THAN
ENOUGH.
THERE WAS A RANDS CORPORATION
STUDY JUST DONE THAT THE THROUGH
TAX CUTS AND REGULATORY CHANGES
FROM 1979 UNTIL 2020 THE UNITED
STATES HAS TRANSFERRED 37
TRILLION FROM THE BOTTOM 90% OF
THE POPULATION TO THE TOP 10% OF
THE POPULATION.
THE INCOMES OF THE UPPER 1% OF
THE COUNTRY HAVE GROWN
EXPONENTIALLY.
THE CORPORATE PROFITS ARE THE
LARGEST THEY'VE BEEN AS CHAIR OF
GDP SINCE THE SECOND WORLD WAR.
CORPORATE TAXES IN THE U.S. ARE
LESS THAN 1% OF GDP IN MOST
OTHER COUNTRIES NOT JUST
SCANDANAVIA, THEY ARE AT LEAST
2%.
SO THERE'S PLENTY OF ROOM FOR
CORPORATIONS TO PAY THEIR FAIR
SHARE OR AN AVERAGE SHARE OF TAX
REVENUES THAT MOST
INDUSTRIALIZED COUNTRIES PAY.
>> MY POINT IS IT'S MUCH MORE
PROGRESSIVE THAN THE COUNTRIES
WHERE A RICH PAY A LARGE
PERCENTAGE OF THE PIE AND THE
LOWER INCOMES PAY ALMOST NONE OF
THE TAX.
>> THIS IS A GREAT DEBATE AND WE