>> Steve: GOVERNMENT SPENDING
SINCE Covid-19 HAS SHOT TO THE
HEAVENS. NOT JUST IN ONTARIO, BUT
EVERYWHERE. AND IT'S WORTH NOTING: PEOPLE
ARE NOT COMPLAINING ABOUT THE
DEBT AND DEFICITS AS THEY ONCE DID. THAT BEGS THE QUESTION: DO
DEFICITS ACTUALLY MATTER
ANYMORE? WELL, LET'S GET INTO THAT. WITH US NOW:
IN EAST SETAUKET, NEW YORK, ON
THE NORTH SHORE OF LONG ISLAND: STEPHANIE KELTON, PROFESSOR OF
ECONOMICS AND PUBLIC POLICY AT
STONY BROOK UNIVERSITY, AND AUTHOR OF "THE DEFICIT MYTH:
MODERN MONETARY THEORY AND THE
BIRTH OF THE PEOPLE'S ECONOMY"; IN MONTREAL, QUEBEC:
CHRIS RAGAN, HE'S DIRECTOR OF
MCGILL UNIVERSITY'S MAX BELL SCHOOL OF PUBLIC POLICY;
AND IN THE NATION'S CAPITAL:
ECONOMIST ARMINE YALNIZYAN, ATKINSON FELLOW ON THE FUTURE OF
WORKERS AND A COLUMNIST FOR THE
TORONTO STAR, WITH UNQUESTIONABLY THE BEST LP
COLLECTION ANYWHERE IN THE
WORLD, AND WE ARE DELIGHTED TO WELCOME CHRIS AND ARMINE BACK TO
OUR PROGRAM, STEPHANIE FOR THE
FIRST TIME. NICE TO HAVE YOU ALONG AS WELL. LET'S START WITH A QUOTE HERE
FROM THE WALL STREET JOURNAL TO
GET US STARTED. SHELDON, IF YOU WOULD, LET'S
BRING THIS GRAPHIC UP. >> Steve: OKAY. LET'S START THERE. STEPHANIE, TO WHAT EXTENT HAS
THIS PANDEMIC CHANGED THE WAY WE
THINK ABOUT DEBT AND DEFICITS? >> Stephanie: WELL, I THINK
EARLY ON IT CHANGED THE WAY WE
THINK QUITE DRAMATICALLY, RIGHT? YOU KNOW, WE HAD OBVIOUSLY A
CRISIS HIT, AND UNLIKE WHAT
HAPPENED AFTER THE PREVIOUS CRISIS -- AND I'M REFERRING TO
THE SORT OF 2007-2008 FINANCIAL
CRISIS -- OKAY, CONGRESS RESPONDED, GOVERNMENTS AROUND
THE WORLD RESPONDED TO THAT
CRISIS AS WELL, BUT WHAT WE GOT HERE IN THE U.S. IN TERMS OF A
RESPONSE WAS REALLY KIND OF ONE
AND DONE. WE GOT ONE MEDIUM-SIZED FISCAL
PACKAGE AND THEN CONGRESS
BASICALLY WASHED ITS HANDS OF THE WHOLE THING AND WENT AWOL
AND LEFT THE JOB TO THE FEDERAL
RESERVE TO TRY TO RESTORE THE JOBS AND THE ECONOMIC GROWTH
THAT, YOU KNOW, HAD BEEN LEFT
BEHIND. THIS TIME WAS DIFFERENT. THIS TIME WITH Covid WE GOT A
VERY SIZABLE RESPONSE IN MARCH
OF LAST YEAR, HERE WE GOT $2.2 TRILLION, AND THEN CONGRESS
CAME BACK IN DECEMBER AND DID
ANOTHER $900 BILLION. AND THEN THIS MARCH, CONGRESS
CAME BACK AND DID $1.9 TRILLION. NONE OF IT WITH ALL OF THE USUAL
HAND-WRINGING ABOUT THE DEFICIT
AND HOW TO PAY FOR SPENDING. SO AT LEAST IN THE FIRST 18
MONTHS OR SO OF THE PANDEMIC, WE
HAD A VERY DIFFERENT RESPONSE, NOT JUST HERE IN THE U.S. BUT OF
COURSE ACROSS EUROPE AND THERE
IN CANADA AS WELL. MUCH MORE ROBUST, MUCH LESS
CONCERN FOR THE BUDGETARY
IMPACTS. AND I THINK, YOU KNOW, THE
EVIDENCE NOW IS THAT THE U.S. EXPERIENCED THE SHORTEST
RECESSION IN OUR NATION'S
HISTORY AS A RESULT OF THAT ROBUST FISCAL SUPPORT. >> Steve: OKAY. CHRIS RAGAN, SAME QUESTION TO
YOU: HOW MUCH HAS THIS PANDEMIC
MADE US RE-THINK WHAT WE USED TO THINK ABOUT DEBTS AND DEFICITS? IS. >> Chris: WELL, I GUESS I
WOULD SAY THAT, YOU KNOW, I'M
LARGELY IN FAVOUR OF WHAT THE CANADIAN FEDERAL GOVERNMENT DID
IN TERMS OF FISCAL POLICY. I THINK WE WERE HIT WITH AN
ENORMOUS AND VERY UNUSUAL SHOCK
AND I THINK THERE WAS A VERY REAL NEED FOR PROVIDING VERY
SIGNIFICANT RELIEF, FINANCIAL
RELIEF, TO HOUSEHOLDS AND BUSINESSES, AND WE DID IT --
THEY DID IT VERY QUICKLY. THEY DID IT AT SCALE. AND I THINK THE GOVERNMENT
SHOULD BE COMMENDED FOR THAT. BUT, I ALSO THINK THAT THE LAST
TWO YEARS OR 32 YEARS FOR THAT
MATTER HASN'T CHANGED SOME BASIC TRUTHS ABOUT FISCAL POLICY, AND
I THINK IT IS STILL TRUE AND
ALWAYS WAS TRUE THAT EVERY TIME THE GOVERNMENT SPENDS MONEY, YOU
EITHER, YOU KNOW, FINANCE IT
WITH TAXES OR YOU FINANCE IT WITH BORROWING, AND ON THE
BORROWING SIDE, YOU CAN EITHER
BORROW IT FROM THE PRIVATE MARKETS OR YOU CAN BORROW IT
FROM YOUR FRIENDLY CENTRAL BANK
DOWN THE STREET, AND ALL OF THOSE APPROACHES TO FINANCING
HAVE BOTH PROS AND CONS. SO EVERY TIME YOU RAISE TAXES,
THERE ARE PROS AND CONS. EVERY TIME YOU BORROW FROM
PRIVATE MARKETS, THERE ARE PROS
AND CONS. AND EVERY TIME YOU PRINT MONEY
TO BORROW FROM YOUR CENTRAL
BANK, THERE ARE PROS AND CONS. AND SO THE BEST MIX OF TAXES AND
PRIVATE BORROWING AND PRINTING
MONEY I THINK DEPENDS VERY MUCH ON TIME AND PLACE, AND THERE'S
NOT A SINGLE BEST POLICY FOR ALL
TIMES AND ALL PLACES, BUT I ABSOLUTELY AGREE THAT THE LAST
18 MONTHS HAS BEEN A
FUNDAMENTALLY DIFFERENT SHOCK AND IT'S CAUSED FOR -- IT'S
CALLED FOR VERY CREATIVE FISCAL
POLICY, AND WE'VE DONE IT. >> Steve: ARMINE, IT'S PRETTY
OBVIOUS IF YOU LOOK AT PRETTY
MUCH EVERY COUNTRY IN THE WORLD TODAY, THEY'VE ALL SAID TO HELL
WITH DEFICITS, WE'RE GOING TO
SPEND WHATEVER IT TAKES IN ORDER TO PROTECT PEOPLE FROM THE
RAVAGES OF THIS CORONA VIRUS. BUT DO YOU BELIEVE CHRIS IS
RIGHT THAT AT THE END OF THE DAY
THERE ARE SOME BASICS THAT ARE TRUE REGARDLESS OF WHAT TIME
PERIOD WE ARE IN IN HISTORY AND
THEY NEED TO BE OBEYED? >> Armine: I THINK I'M GOING
TO GO BACK TO YOUR ORIGINAL
QUESTION, WHICH IS, DO WE THINK ABOUT DEFICITS FUNDAMENTALLY
DIFFERENTLY NOW BECAUSE OF THE
PANDEMIC? I'LL SEE YOUR QUESTION AND I'LL
RAISE YOU ONE. I THINK WE LOOK AT MONEY
FUNDAMENTALLY DIFFERENTLY. STEPHANIE MENTIONED THAT THAT
STARTED IN THE WAKE OF THE
GLOBAL FINANCIAL CRISIS, WHERE CENTRAL BANKS AROUND THE WORLD
MARSHALED RESOURCES TO SAVE THE
FINANCIAL SYSTEM FROM PARALYSIS, TO KEEP THE LIQUIDITY GOING. AND SUDDENLY WE FOUND THAT THERE
WERE GAJILLIONS OF DOLLARS
AVAILABLE TO PROTECT THE MOST LARGE FINANCIAL INSTITUTIONS. SO, MONEY WAS AVAILABLE TO
SOCIALIZE RISK BUT NOT TO
SOCIALIZE PROFITS. THAT REMAINS IN PRIVATE HANDS. AROUND THE SAME TIME WHEN THE
GLOBAL FINANCIAL CRISIS CAME, WE
STARTED SEEING THE BIRTH OF CRYPTO CURRENCIES THAT HAD MOVED
FROM DARK MARKETS, BASICALLY
GANGSTERS USING WAYS OF EXCHANGING THINGS, TO
MAINSTREAMING IT. BITCOIN WAS INTRODUCED IN 2009,
I THINK IN JANUARY, RIGHT IN THE
HEART OF THE RECESSION. AND AS OF TODAY, I JUST CHECKED
BEFORE WE CAME ONLINE, THERE ARE
13,000 CRYPTO CURRENCIES IN CIRCULATION RIGHT NOW. BITCOIN STILL HAS THE BIGGEST
MARKET SHARE. BUT IT WAS ONLY 7,000
CRYPTO CURRENCIES AT THE END OF
SEPTEMBER. AND THE REASON I'M RAISING THIS
IS BECAUSE WHAT IS MONEY AND WHO
PRODUCES IT HAS BEEN RAISED IN QUESTION. CHINA CLAMPED DOWN ON
CRYPTO CURRENCIES BECAUSE IT
WANTS TO ISSUE ITS OWN AND OF COURSE ALL CENTRAL BANKS ARE
LOOKING AT WHO ISSUES SOVEREIGN
CURRENCY. AND THEN THE THIRD ISSUE IS THE
PANDEMIC, WHERE WE REALIZED
THAT -- WELL, FIRST OF ALL, WE HAVEN'T SEEN THIS KIND OF
GOVERNMENT REACTION BECAUSE THIS
ISN'T A DEMAND SHORTFALL. IT IS A SUPPLY STOPPAGE TO
CONTAIN THE CONTAGION, WHICH
HASN'T ENDED YET. AND THERE IS ABSOLUTELY NOTHING
IN OUR PLAYBOOK ON HOW YOU DEAL
WITH SUPPLY-BASED SHOCKS, WHICH I THINK WE'RE GOING TO SEE MORE
OF, WHETHER IT'S PANDEMICS OR
MORE EXTREME CLIMATE MOMENTS. BUT WITHOUT GOVERNMENT STEPPING
INTO THE BREACH, WE ARE GOING TO
SEE TOTAL COLLAPSE OF WHOLE ECONOMIES. SO WHAT THIS HAS DONE IS ASK US:
WHAT IS MONEY AND WHAT ARE
GOVERNMENTS FOR? I THINK IT'S A VERY PROFOUND
QUESTION AND IT DOESN'T END AT
WHAT ARE DEFICITS, ALTHOUGH THAT'S ONE OF THE MANIFESTATIONS
OF WHAT ARE GOVERNMENTS FOR AND
WHO ARE THEY FOR? THAT'S THE MOMENT WE ARE IN. >> Steve: I APPRECIATE YOUR
POINT. AND I GUESS LET ME JUST PIVOT --
BOY, THERE'S THAT WORD AGAIN --
LET ME JUST PIVOT OVER TO STEPHANIE WITH THIS. I THINK WE'RE ALL OLD ENOUGH TO
REMEMBER THE EARLY 1980s WITH
REAGANOMICS AND A COMPLETELY DIFFERENT FROM TODAY VIEW OF HOW
YOU OUGHT TO HANDLE MONEY. IT WAS DEREGULATION. IT WAS LET FREE MARKETS BLOOM. IT WAS GET THE GOVERNMENT OUT OF
YOUR FACE. IS THAT ERA, IN YOUR VIEW,
STEPHANIE, IS THAT HISTORY NOW? >> Stephanie: NOT NECESSARILY. BUT DON'T FORGET THAT PART OF
WHAT REAGAN DID ALSO WERE
MASSIVE TAX CUTS AND AN ENORMOUS BUILDUP IN THE MILITARY BUDGET. THAT PRODUCED INCREASES IN THE
DEFICIT AND A NEAR TRIPLING OF
THE NATIONAL DEBT. SO THIS CONVERSATION THAT WE'VE
BEEN HAVING ABOUT, YOU KNOW,
DEFICITS AND WHETHER AND HOW THEY MATTER, REMEMBER THAT IT
WAS DICK CHENEY, VICE PRESIDENT
CHENEY, WHO FAMOUSLY QUIPPED THAT REAGAN HAD PROVED THAT
DEFICITS DON'T MATTER, AT LEAST
NOT THE WAY THAT WE'VE BEEN TAUGHT TO THINK OF THEM. SO, YOU KNOW, THERE WILL ALWAYS
BE A STRONG GROUP, A STRONG
PRESENCE OF POLITICIANS HERE IN THE U.S. AND ELSEWHERE WHO
BELIEVE THAT THE WAY TO GENERATE
ECONOMIC GROWTH AND PROSPERITY IS MOSTLY THROUGH THE FREE
MARKET, THROUGH DEREGULATING
MARKETS, THROUGH TAX CUTS, THROUGH GETTING GOVERNMENT OUT
OF THE WAY AND INCENTIVIZING THE
PRIVATE SECTOR, AND THAT IS SORT OF THE RHETORIC THAT GAVE US THE
SO-CALLED TRICKLE-DOWN ECONOMIC
THEORIES THAT, YOU KNOW, HAVE BEEN IMPLEMENTED AND TRIED FOR
THE BETTER PART OF FOUR DECADES
NOW. AND I THINK IF YOUR QUESTION IS,
ARE WE SEEING A SHIFT AWAY FROM
THAT? I THINK THE JURY IS IN SOME
SENSE STILL OUT. WE ARE ATTEMPTING TO DO THAT
HERE UNDER THE BIDEN
ADMINISTRATION, BUT AS YOU'RE UNDOUBTEDLY AWARE UP THERE IN
CANADA, WE'RE HAVING SOME
TROUBLE PASSING THAT KIND OF LEGISLATION. SO WE HAVE COMPETING IDEOLOGIES
WHEN IT COMES TO HOW TO GROW AN
ECONOMY. >> Steve: WHEN YOU JUST SAID
THAT, EVERYBODY ELSE SMILED
BECAUSE, YES, WE HAVE -- WE HAVE BEEN AWARE THAT THERE HAVE BEEN
SOME DIFFICULTIES DOWN IN DC ON
THAT ISSUE. BUT, OKAY, THAT WAS 40 YEARS
AGO. LET ME TAKE YOU, CHRIS, TO 25
YEARS AGO, 26, PAUL MARTIN, THEN
THE FINANCE MINISTER, BRINGS IN WHAT THE GLOBE AND MAIL CALLED
THE MOTHER OF ALL AUSTERITY
BUDGETS AND HE SAID AT THE TIME THE DEBT AND DEFICIT ARE NOT
INVENTIONS OF IDEOLOGY, THEY ARE
FACTS OF ARITHMETIC, THE QUICKSAND OF COMPOUND INTEREST
IS REAL. IS THAT SOME OF THE SORT OF
BASIC ARITHMETIC THAT YOU TRIED
TO TELL US ABOUT IN YOUR PREVIOUS ANSWER? >> Chris: WELL, YEAH. I THINK IT'S HARD TO DISAGREE
WITH SOME OF THE ARITHMETIC. YOU CAN LOOK BACK AND YOU CAN
STILL HAVE A DEBATE ABOUT
WHETHER PAUL MARTIN AND JEAN CHRETIEN SHOULD HAVE EMBARKED ON
THE FISCAL CONSOLIDATION THAT
THEY DID, STARTING IN 1995. I MEAN, MY OWN VIEW IS THAT IN
FACT DEBT -- SO FEDERAL PLUS
PROVINCIAL DEBT IN THIS COUNTRY HAD REACHED 90% OF GDP. THE PRIVATE MARKETS HAD STARTED
QUESTIONING HOW WE WERE GOING TO
PAY IT BACK OR WHEN WE WERE GOING TO PAY IT BACK OR WHETHER
WE WERE GOING TO PAY IT BACK. BOND YIELDS STARTED SPIKING. THE GOVERNMENT THEN DECIDED THAT
THEY NEEDED TO ACTUALLY
CONSOLIDATE, YOU KNOW, BASICALLY CUT -- MOSTLY CUT SPENDING, A
LITTLE BIT OF TAX INCREASES. BUT DEFICITS THAT WERE PRETTY
SUBSTANTIAL AS A SHARE OF GDP
TURNED INTO SURPLUSES WITHIN A FEW YEARS, AND OUR DEBT-TO-GDP
RATIO FELL. AND I THINK THAT WAS ACTUALLY
MOSTLY GOOD POLICY, AND IN FACT
ONE OF THE LEGACIES OF PAUL MARTIN'S ACTIONS THAT STARTED IN
THE MID 1990s WAS THAT BY THE
TIME WE GOT TO THE GLOBAL FINANCIAL CRISIS IN 2008 AND
WHAT WAS ALSO TRUE AT THE
BEGINNING OF Covid IN 2020, IS THAT THE FEDERAL GOVERNMENT'S
DEBT-TO-GDP RATIO WAS LOW. IT WAS 30 OR 31% OF GDP. AND THAT GAVE US THE ABILITY IN
BOTH OF THOSE SITUATIONS TO BE
VERY AGGRESSIVE IN TERMS OF DESIGNING A FISCAL POLICY
RESPONSE IN 2009 AND '10, IT WAS
A FISCAL STIMULUS PACKAGE THAT WAS 3 OR 4% OF GDP, AND OF
COURSE WITH Covid, IT WAS THE
PROVISION OF FINANCIAL RELIEF THAT ENDED UP BEING 15 OR 16% OF
GDP. AND I THINK THAT WOULD HAVE BEEN
HARDER TO DO IF OUR BOOKS HAD
BEEN IN LESS GOOD POSITION. >> Steve: ALL RIGHT. BUT, ARMINE, I DO WANT TO CIRCLE
BACK TO THIS WITH YOU AND I TAKE
YOUR LARGER POINT ABOUT WHAT IS GOVERNMENT FOR. THAT IS A PROFOUNDLY IMPORTANT
AND INTERESTING QUESTION. BUT I'M GOING TO GET BACK TO THE
MATH AGAIN. I MEAN, IS MATH MATH? ARE THERE BASIC ARITHMETIC
REALITIES HERE THAT THOSE WHO
RUN DEFICITS IN THE ORDER OF $365 MILLION ANNUALLY WILL
SIMPLY HAVE TO DEAL WITH IT AT
SOME POINT? >> Armine: YOU KNOW, THIS
REMINDS ME OF THE MINIMUM WAGE
CONVERSATION AND WHETHER RAISING THE MINIMUM WAGE IS GOING TO
KILL JOBS. AND THE EVIDENCE WHEN IT COMES
TO DEBT TO GDP OR DEFICITS IS
THAT JAPAN CAN RUN OVER 200% OF GDP. IT IS NOT A FAILED STATE. CHAD CAN RUN 15% OF GDP. IT IS A FAILED STATE. THERE IS NO MAGIC NUMBER WHERE
DEBT TO GDP IS THE RIGHT NUMBER. WHAT MATTERS IS HOW YOU'RE USING
THE MONEY YOU'RE BORROWING. AND WHETHER IT IS CREATING
SOMETHING OF VALUE THAT RAISES
UP PEOPLE'S QUALITY OF LIFE. AND IF YOU ARE DOING THAT, IF
YOU ARE ACTUALLY MAXIMIZING
POTENTIAL, NOT JUST IN TERMS OF GDP GROWTH BUT QUALITY OF LIFE
GROWTH, THEN YOU ARE -- WHATEVER
IT IS YOU'RE DOING, YOU CAN AFFORD TO DO BECAUSE IT PAYS
ITSELF -- YOU KNOW, IT PAYS FOR
ITSELF AT SOME LEVEL, BECAUSE IF YOU DON'T DO IT, YOU'RE ACTUALLY
MINIMIZING YOUR ABILITY TO
MAXIMIZE YOUR OUTPUT. SO I'M NOT SURE THAT THE MATH
QUESTION IS THE RIGHT QUESTION. IT'S LIKE, WHAT ARE YOU DOING
WITH THE MONEY? IT'S THAT OLD MAE WEST LINE. IT AIN'T HOW BIG IT IS, IT'S HOW
YOU USE IT. RIGHT? WHAT ARE YOU DOING WITH THE
MONEY THAT YOU'RE BORROWING? >> Steve: YOU ARE A REALLY
DIFFERENT KIND OF ECONOMIST,
I'VE GOT TO SAY, WHICH IS WHY WE KEEP HAVING YOU BACK ON THIS
PROGRAM. THAT WAS GREAT. >> Stephanie: CAN I SAY
SOMETHING? CAN I FOLLOW ON THAT? SO, ARMINE ... I LOVE THIS. IT'S NOT THE SIZE OF THE DEBT
THAT MATTERS. BUT I'LL DIFFER SLIGHTLY. I'LL SAY IT'S THE DENOMINATION,
RIGHT? THAT IS WHAT IS SO CRITICAL
HERE. OUR DEBT HERE IN THE U.S. IS
DENOMINATED IN U.S. DOLLARS. CANADA'S DEBT IS DENOMINATED IN
THE CANADIAN DOLLAR. JAPAN'S IS DENOMINATED IN THE
JAPANESE YEN. YOU GO TO A COUNTRY LIKE GREECE
OR ITALY, NOW YOU HAVE DEBT
THAT'S DENOMINATED IN THE EURO, RIGHT? BECAUSE THESE COUNTRIES GAVE UP
THEIR SOVEREIGN CURRENCY MANY
YEARS AGO AND THEY BEGAN BORROWING IN CURRENCIES THAT
THEY CAN'T ISSUE. IT'S LIKE WHAT HAPPENS IN
VENEZUELA OR ARGENTINA. YOU START TAKING ON
FOREIGN-DENOMINATED DEBT AND
IT'S A GAME CHANGER BECAUSE NOW YOU'RE PLEDGING TO PAY BACK DEBT
IN A CURRENCY THAT DOESN'T COME
FROM YOU. SO IS THERE DEFAULT RISK? ARE YOU VULNERABLE IN WAYS THAT
CANADA AND THE U.S. AREN'T? YOU BET YOU ARE. YOU START BORROWING IN A FOREIGN
CURRENCY. SO I THINK ARMINE'S EXACTLY
RIGHT TO POINT TO JAPAN AS THE
PERFECT EXAMPLE HERE. HERE IS A COUNTRY THAT HAD A
VERY ROBUST RESPONSE TO Covid. NOT BECAUSE IT WAS FRUGAL FOR
THE LAST 30 YEARS AND HAD KEPT
ITS DEFICIT SMALL OR KEPT ITS BUDGET IN SURPLUS. NO. JAPAN HAS BEEN RUNNING FISCAL
DEFICITS FOR THREE DECADES,
LARGE DEFICITS, AND BASICALLY THE LARGEST DEBT-TO-GDP RATIO IN
THE WORLD AT SOME 240%. SO IT'S NOT LIKE THEY WERE
SCRAPING BY AND ALL OF A SUDDEN
HAD THE MONEY TO UNLEASH IN RESPONSE TO Covid. THEY WERE ABLE TO DO THAT
BECAUSE THEY'RE A
CURRENCY-ISSUING GOVERNMENT LIKE THE U.S., LIKE CANADA. AND THE REASON THAT THINGS WERE
DIFFERENT THIS TIME IN ITALY AND
IN PLACES LIKE GREECE IS BECAUSE THE EUROPEAN CENTRAL BANK
STEPPED UP EARLY, DIDN'T WAIT
LIKE IT DID AFTER THE DEBT CRISIS IN 2010, IT STEPPED UP
EARLY AND IT BACKSTOPPED THESE
GOVERNMENTS AND IT SAID, LISTEN, WE KNOW YOU CAN'T ISSUE THE
CURRENCY, BUT WE HAVE YOUR BACK. WE WILL HOLD INTEREST RATES
DOWN. WE WILL BUY BONDS. WE WILL SUPPORT YOU. GO SPEND THE MONEY YOU NEED TO
SPEND. FIGHT THE PANDEMIC. SUPPORT YOUR ECONOMIES. AND WE HAVE YOUR BACK. SO IT'S SORT OF LIKE, YOU KNOW,
CONGRESS SUPPORTING INDIVIDUAL
STATES HERE IN THE U.S. WE HAVE TO TREAT INDIVIDUAL
STATES, GOVERNORS AND MAYORS,
DIFFERENTLY. THEY DON'T HAVE CURRENCY-ISSUING
CAPACITY, AND THE ECB HAS TO
TREAT MEMBER GOVERNMENTS DIFFERENTLY BECAUSE THEY'VE
GIVEN UP THEIR CURRENCY-ISSUING
CAPACITY. >> Steve: WHILE YOU'VE GOT THE
FLOOR, I WOULD LIKE TO READ AN
EXCERPT FROM YOUR BOOK "THE DEFICIT MYTH" WHICH JUST
COINCIDENTALLY IS ON THE SHELF
RIGHT THERE OVER YOUR RIGHT SHOULDER. AND HERE COMES THE EXCERPT:
(MODERN MONETARY THEORY)
>> Steve: LET'S GET INTO SOME CONVERSATION HERE ABOUT MMT,
MODERN MONETARY THEORY. STEPHANIE, DO YOU WANT TO START
AND GIVE US YOUR SORT OF BEST
HANDY DANDY DEFINITION OF THAT. >> Stephanie: SO MMT -- YOU
KNOW, IT HAS THE WORD "THEORY"
IN THERE. DON'T LET THAT CONFUSE YOU. IT'S A LITTLE BIT OF A BRANDING
PROBLEM IN A SENSE BECAUSE MMT
IS REALLY A DESCRIPTION OF THE MONETARY SYSTEM THAT EXISTS
TODAY AND THE MECHANICS OF
GOVERNMENT FINANCE. SO WHAT WE'RE TRYING TO DO IS
EXPLAIN HONESTLY, CANDIDLY, HOW
DOES THE MONETARY SYSTEM WORK AND HOW DOES GOVERNMENT FINANCE
WORK UNDER THE SYSTEM WE HAVE
TODAY, WHICH IS NOT A GOLD STANDARD SYSTEM? SO BACK IN THE DAY, THE U.S. DOLLAR WAS TIED TO GOLD. WE HAD AN INTERNATIONAL MONETARY
SYSTEM WHERE WE HAD FIXED
EXCHANGE RATES. WE HAD A DIFFERENT SYSTEM, AND
THINGS WORKED DIFFERENTLY. AFTER 1971, PRESIDENT NIXON TOOK
THE U.S. OFF THE GOLD STANDARD
AND THIS OLD MONETARY SYSTEM CALLED THE BRETTON WOODS SYSTEM
WENT AWAY. NOW WE HAVE WHAT ARE CALLED
FLOATING EXCHANGE RATES, FIAT
CURRENCIES. AND IT MATTERS. IT CHANGES EVERYTHING. SO WHEN I SAY THE TAXPAYER ISN'T
AT THE CENTRE OF THE MONETARY
UNIVERSE, WHAT I MEAN IS THAT CONGRESS CAN DO WHAT CONGRESS
HAS BEEN DOING FOR THE LAST 18
MONTHS. WRITE A PIECE OF LEGISLATION,
COMMIT TRILLIONS OF DOLLARS TO
PROVIDING SUPPORT FOR THE ECONOMY, FIGHTING THE PANDEMIC
AND SO FORTH, AND IT CAN DO THAT
WITHOUT HAVING TO GO TO THE REST OF US HAT IN HAND TO RAISE THAT
MONEY. IT CAN COMMIT TO SPENDING MONEY
THAT IT DOES NOT HAVE. HOW? BECAUSE CONGRESS HAS THE POWER
OF THE PURSE. THEY WRITE THE BILL, AND IF THE
VOTES ARE THERE, THE MONEY GOES
OUT. THERE IS A SYSTEM IN PLACE THAT
INVOLVES PRIVATE BANKS, IT
INVOLVES THE CENTRAL BANK. THE CENTRAL BANK WORKS WITH THE
FINANCIAL SYSTEM TO GET THAT
MONEY INTO OUR ACCOUNTS. IF CONGRESS AUTHORIZES THE
SPENDING, THE MONEY GOES OUT,
AND IT IS ALWAYS ACCOMPLISHED THROUGH THE CREATION OF NEW
MONEY. SO IT ALWAYS LEADS TO NEW MONEY
CREATION THAT GETS SPENT INTO
THE ECONOMY. WHETHER SOME OF THAT MONEY IS,
YOU KNOW, SUBTRACTED AWAY,
UNPRINTED, IF YOU LIKE, THROUGH TAXATION, IS A DIFFERENT
QUESTION. BUT THE POINT IS THAT THERE CAN
BE NO SHORTFALL IN SPENDING
CAPACITY WHEN YOU ARE THE ISSUER OF THE CURRENCY. >> Steve: CHRIS RAGAN, COME
BACK AT THAT, IF YOU LIKE. >> Chris: WELL, I'LL GO BACK
TO WHAT I SAID IN MY OPENING
COMMENT. SO I HAVEN'T HEARD ANYTHING THAT
HAS CHANGED WHAT MY KIND OF
THREE FUNDAMENTAL FACTS ARE, IS THAT WHEN THE GOVERNMENT SPENDS
MONEY, THEY'RE EITHER GOING TO
PAY FOR THEIR SPENDING, WHICH IS THEIR CLAIM ON RESOURCES, BY
USING TAX DOLLARS OR THEY'RE
GOING TO BORROW FROM PRIVATE MARKETS OR THEY'RE GOING TO
BORROW FROM THEIR CENTRAL BANK,
WHICH MEANS PRINTING MONEY. SO ALL OF THOSE THINGS ARE
POSSIBLE. ALL OF THOSE THINGS ARE USED ALL
THE TIME. THE REAL DEBATES ARE ABOUT THE
BALANCE BETWEEN THOSE THREE
THINGS. SO WE CAN HAVE A DEBATE ABOUT,
WELL, SHOULD WE HAVE HIGHER
TAXES OR NOT? WE CAN HAVE A DEBATE ABOUT, YOU
KNOW, SHOULD WE BORROW MORE FROM
PRIVATE MARKETS OR NOT? AND WE CAN HAVE A DEBATE ABOUT
WHETHER WE SHOULD PRINT MORE
MONEY OR WHETHER THE CENTRAL BANK SHOULD PRINT MORE MONEY OR
NOT. AND THERE ARE LONG AND COMPLEX
AND INTERESTING DEBATES THAT GO
ON INTO ALL THREE OF THOSE QUESTIONS. AND OF COURSE THERE'S THE FOURTH
QUESTION, WHICH IS: SHOULD WE
SPEND MORE OR NOT, AND IF SO, ON WHAT? SO I DON'T THINK ANY OF THOSE
THINGS HAVE CHANGED, BUT YOU CAN
CERTAINLY HAVE A GOOD DEBATE ABOUT THE RELATIVE WEIGHT YOU
PLACE ON THOSE DIFFERENT METHODS
FOR FINANCING. AND WHAT MMT IS ABOUT, AS I
UNDERSTAND MMT, READING
STEPHANIE'S BOOK AND OTHER THINGS, YOU KNOW, THAT -- MANY
THINGS THAT ARE WRITTEN IN
RESPONSE TO STEPHANIE'S BOOK, IS THAT, YOU KNOW, MMT TAKES THE
VIEW THAT YOU CAN DO A LOT MORE
OF THE FINANCING WITH THE CENTRAL BANK PROVIDING THE
FINANCING AND YOU CAN WORRY
ABOUT INFLATION, SO WE CAN COME BACK AND TALK ABOUT INFLATION,
AND THEN YOU CAN USE YOUR TAXING
AND SPENDING AS A WAY TO CONTROL INFLATION. THAT'S MY VERY PERHAPS SHODDY
UNDERSTANDING OF MMT, IN A
NUTSHELL, BUT WE CAN GET INTO THAT. >> Steve: STEPHANIE, I KNOW
YOU WANT TO COME BACK ON THAT
BUT HOLD OFF FOR A SECOND BECAUSE WE DID JUST IN THE
PROVINCE OF ONTARIO TODAY HAVE A
FALL ECONOMIC STATEMENT, A KIND OF FISCAL UPDATE ON WHERE THE
BOOKS OF THE PROVINCE OF ONTARIO
ARE NOW, AND, ARMINE, I'D LIKE YOU TO COMMENT ON THIS BECAUSE
THE NEW DEFICIT FIGURE FOR THIS
FISCAL YEAR IN WHICH WE FIND OURSELVES, 2021-22, IS NOW MORE
THAN $20 BILLION, WHICH IS DOWN
A THIRD FROM WHERE THEY PROJECTED IT BUT IT'S MORE THAN
20 BILLION. MY QUESTION FOR YOU IS: WHAT
WE'VE HEARD ABOUT MODERN
MONETARY THEORY, WOULD THAT APPLY TO THE PROVINCES AND THE
SIZE OF THEIR DEFICITS AND
BORROWING, ET CETERA? >> Armine: NO. >> Stephanie: SO MMT --
>> Steve: NO, THIS IS FOR
ARMINE. SORRY. LET ME HEAR FROM ARMINE ON THIS
AND THEN I'LL COME BACK TO
STEPHANIE. >> Armine: NO, BECAUSE ONTARIO
DOESN'T ISSUE THE CANADIAN
DOLLAR. IT ISN'T IN CHARGE OF HOW MUCH
MONEY IS IN THE SYSTEM. SO MUNICIPAL -- MUNICIPALITIES
AREN'T ALLOWED TO HAVE DEBT
BECAUSE OF THE WAY OUR LAWS ARE ORGANIZED, AND PROVINCIALLY
GOVERNMENTS CANNOT TAKE
ADVANTAGE OF THIS THEORY. BUT IF YOU'VE GOT A FEDERAL
GOVERNMENT THAT DOES HAVE THE
PROVINCES' BACK, AND THAT'S WHAT WE'VE BEEN SEEING DURING THIS
CRISIS IS, YOU KNOW, THE
ABSOLUTELY HISTORIC DEAL ON EARLY LEARNING AND CHILD CARE. EVERY SINGLE PROVINCE -- EVERY
JURISDICTION IS CASH STRAPPED. AND YET WE NEED TO DO SOMETHING
ABOUT EARLY LEARNING AND CHILD
CARE IF WE'RE GOING TO GET A FULL RECOVERY BACK AND MAXIMIZE
THE POTENTIAL OF ALL OF OUR
WORKFORCE, MALE AND FEMALE, PEOPLE WITH CHILDREN AND PEOPLE
WITHOUT CHILDREN. SO SOMETHING HAD TO HAPPEN, AND
THAT WAS UNILATERALLY FEDERAL
FUNDING BUT NOT TRANSFERS TO THE PROVINCES WITHOUT STRINGS
ATTACHED. RATHER, MONEY THAT WAS SPENT TO
ACHIEVE CERTAIN GOALS THAT WERE
TAKING PLACE IN A NATIONAL FRAMEWORK BUT HAD PROVINCIAL
PRIORITIES AND TERRITORIAL
PRIORITIES. SO, YOU KNOW, THE PROVINCES
DON'T BENEFIT FROM MMT, BUT IF
YOU'VE GOT, FROM AN MMT APPROACH. BUT IF YOU'VE GOT A FEDERAL
GOVERNMENT THAT UNDERSTANDS THAT
IT CAN UNDERWRITE NATION-WIDE STRATEGIES, THEN YOU CAN
ACTUALLY CHANGE THE FISCAL
BALANCE SHEET OF THE PROVINCES TOO. >> Steve: OKAY. STEPHANIE, APOLOGIES FOR THE
INTERRUPTION. YOU WANTED TO SAY ... >> Stephanie: NO, I AGREE WITH
WHAT ARMINE JUST SAID. WHAT I WANT TO MAKE CLEAR, AND I
THINK THIS IS REALLY IMPORTANT,
IS THAT ONE OF THE GREAT STRENGTHS OF MMT IS THE
OPERATIONAL DETAILS. MONETARY OPERATIONS, THE
MECHANICS OF GOVERNMENT FINANCE. HOW DOES IT REALLY WORK. AND SO WHAT MMT HAS SHOWN, AND I
MEAN THE SCHOLARSHIP, THESE ARE
PEER REVIEWED ACADEMIC PUBLICATIONS WHERE WE LAY THIS
STUFF OUT IN VERY, YOU KNOW,
GREAT DETAIL TO EXPLAIN THAT GOVERNMENT PAYS ALL OF ITS BILLS
ONLY IN ONE WAY. THERE ISN'T THIS MENU OF
CHOICES. THE GOVERNMENT CAN'T SIT BACK
AND SAY: WELL, SHOULD I USE TAX
REVENUE TO PAY SOME OF MY BILLS? SHOULD I BORROW TO PAY SOME OF
MY BILLS? SHOULD I PRINT MONEY? IT'S PRESENTED AS IF THERE ARE
THESE THREE CHOICES THAT HAVE TO
BE MADE UP FRONT AND GOVERNMENT CAN PICK WHICH WAY TO PAY THE
BILLS. THAT'S NOT HOW IT WORKS AT ALL. THERE'S ONLY ONE WAY THAT THE
GOVERNMENT PAYS ANY OF ITS
BILLS. AND THAT INVOLVES NEWLY CREATED
MONEY. SO THERE ISN'T A MENU OF
CHOICES. WHAT YOU HAVE IS, LIKE I SAID
BEFORE, CONGRESS WRITES A BILL,
AND THAT BILL SENDS A SET OF INSTRUCTIONS TO THE CENTRAL
BANK. THAT'S THE GOVERNMENT'S FISCAL
AGENT. AND SO IF CONGRESS SAYS, WE'RE
GOING TO SEND $1400 CHEQUES TO
ALMOST EVERY PERSON IN THIS COUNTRY -- WHICH WE DID. CONGRESS IS SAYING IN THAT
LEGISLATION TO ITS BANK: YOU'RE
GOING TO BE CREDITING THE BANK ACCOUNTS OF THE PEOPLE WHO
RECEIVE THOSE CHEQUES AND
DEPOSIT THEM INTO THEIR BANKS. YOU'RE GOING TO MARK UP THE SIZE
OF THE BANK'S ACCOUNT, AND THE
BANK IS GOING TO MARK UP THE SIZE OF THE RECIPIENT'S ACCOUNT. THAT IS NEW MONEY CREATION. IT'S HOW IT ALWAYS WORKS. NOW, IT'S POSSIBLE FOR CONGRESS
TO WRITE A BILL THAT INCLUDES
TWO SETS OF INSTRUCTIONS. ONE SET THAT SAYS, GO CREDIT
THESE BANK ACCOUNTS AND DISPENSE
THIS MONEY; AND ANOTHER SET OF INSTRUCTIONS THAT SAYS, GO OUT
AND DEBIT THE BANK ACCOUNTS OF
THE CORPORATIONS AND OF THE RICHEST PEOPLE IN AMERICA
BECAUSE WE'VE DECIDED TO PAY
FOR, QUOTE, UNQUOTE, OUR SPENDING BY TAXING THE RICH AND
TAXING CORPORATIONS. NOW, THE TAXES AREN'T PAYING FOR
THE SPENDING. IT'S TWO SEPARATE SETS OF
INSTRUCTIONS HAPPENING ALONGSIDE
ONE ANOTHER. SOME PEOPLE GET CREDITS TO THEIR
BANK ACCOUNTS. OTHER PEOPLE GET DEBITS TO THEIR
BANK ACCOUNTS. AND WE PRETEND THAT THE
TAXPAYER, RIGHT, THE RICH, ARE
SHUFFLING MONEY OVER TO THE POOR AND TO HELP BUILD ROADS AND
BRIDGES. THAT'S NOT WHAT'S HAPPENING AT
ALL. BUT IT'S THE WAY IT'S TYPICALLY
DESCRIBED. >> Steve: IT SOUNDS, CHRIS,
LIKE THE NATURE OF THE
RELATIONSHIP BETWEEN CENTRAL BANKS AND GOVERNMENTS IS VERY
DIFFERENT UNDER THIS THEORY; IS
THAT RIGHT? >> Chris: I THINK IT IS,
ACTUALLY. YOU KNOW, THE WAY I WOULD
DESCRIBE HOW CENTRAL BANKS AND
GOVERNMENTS, FEDERAL GOVERNMENTS, WORK IN MOST
COUNTRIES IS THAT THERE IS AN
OPERATIONAL SEPARATION BETWEEN THEM. SO CENTRAL BANKS ARE TYPICALLY
OWNED BY THEIR FEDERAL
GOVERNMENT, BUT THEY ARE TYPICALLY OPERATIONALLY
INDEPENDENT, AND THE FEDERAL
GOVERNMENT AND THE TREASURY, YOU KNOW, SETS TAXES AND SETS
SPENDING AND DOES BORROWING --
ISSUES DEBT INTO PRIVATE MARKETS. AND THE CENTRAL BANK, YOU KNOW,
BASICALLY SETS THE AMOUNT OF
MONEY IN THE SYSTEM, AND THEY DO THAT BY BUYING GOVERNMENT BONDS
IN SECONDARY MARKETS. BUT THE MONETARY POLICY FROM THE
CENTRAL BANK AND THE FISCAL
POLICY FROM THE FEDERAL GOVERNMENT ARE TYPICALLY -- I
DON'T WANT TO SAY THEY'RE
COMPLETELY INDEPENDENT, BUT THEY ARE OPERATIONALLY INDEPENDENT. AND THE WAY I WOULD THINK OF MMT
IS THAT EFFECTIVELY YOU ARE
SUBSUMING THE CENTRAL BANK AND ITS INDEPENDENCE BUT ALSO ITS
ACTIONS INTO THE FEDERAL
GOVERNMENT BECAUSE NOW WHAT YOU'RE DOING IS YOU'RE BASICALLY
SAYING THAT THE FEDERAL
GOVERNMENT IS GOING TO SPEND ON WHATEVER IT WANTS TO SPEND ON,
BUT IT'S GOING TO -- IT'S GOING
TO PRINT MONEY, EFFECTIVELY, TO DO AT LEAST A LARGE AMOUNT OF
THAT SPENDING, PROBABLY A LARGER
AMOUNT THAN IT WOULD HAVE IN THE WORLD WHERE THE TWO ARE
OPERATIONALLY INDEPENDENT, AND
THEN YOU'VE GOT TO FIGURE OUT, YOU KNOW, WHAT IS THE DIVISION
OF DUTIES IN TERMS OF TRYING TO
INFLUENCE INFLATION AND, YOU KNOW, I WOULD SAY THAT'S THE KEY
THING. AND SO IN THE CURRENT WORLD, THE
CENTRAL BANK IS REALLY KEEPING
AN EYE ON INFLATION AND SETTING ITS ACTIONS LARGELY TO DO THAT. AND YOU CAN HAVE A DEBATE ABOUT
WHETHER CENTRAL BANKS DO THAT
WELL OR WHETHER THEY CAN MODIFY THEIR OPERATIONS. BUT IN THE WORLD OF MMT, AS I
UNDERSTAND IT, THE FEDERAL
GOVERNMENT WOULD ADJUST ITS TAXES AND SPENDING SO AS TO
CONTROL INFLATION, AND I GUESS
MY PROBLEM, I SUPPOSE, WITH MMT OR WITH THAT APPROACH IS THAT I
QUESTION WHETHER TAXES AND
SPENDING IS THE BEST WAY TO ACTUALLY CONTROL INFLATION. I SUSPECT THAT IT IS NOT. BUT WE CAN TALK ABOUT THAT. >> Steve: ARMINE, DO YOU HAVE
A VIEW AS TO WHETHER THIS WAY IS
A BETTER WAY OR IS ADVISABLE TO DO? >> Armine: I HAVE TO CONFESS. I'VE READ STEPHANIE'S BOOK. I HAVE LISTENED TO SO MANY OF
HER PODCASTS. AND I REALLY DO NOT UNDERSTAND
THE ROLE OF TAXATION IN THIS
WHOLE STORY. I DON'T WANT TO WEIGH IN BECAUSE
I DON'T REALLY KNOW WHAT I'M
TALKING ABOUT ANYMORE. >> Steve: HA HA. ALL RIGHT. DO YOU WANT TO GIVE IT A SHOT,
STEPHANIE? >> Stephanie: LET ME BACK,
YES, MY GOODNESS. SO, LOOK, FIRST OF ALL, WE
CANNOT CONTINUE TO PRETEND THAT
MMT IS ABOUT RELYING ON CENTRAL BANKS TO PROVIDE FINANCING FOR
THE GOVERNMENT. IT IS NOT ABOUT THAT. IT HAS NEVER BEEN ABOUT THAT. GO BACK TO RONALD REAGAN. MMT DID NOT EXIST. THERE WAS NO MMT. I WASN'T EVEN WRITING -- I
WASN'T EVEN DOING ECONOMICS AT
THE TIME. NONE OF THIS STUFF, MM, IT DID
NOT EXIST. BUT HERE'S RONALD REAGAN, DOING
WHAT? EXACTLY WHAT WE'VE BEEN TALKING
ABOUT. RUNNING LARGE GOVERNMENT
DEFICITS, TAX CUTS, BIG
INCREASES IN DEFENCE SPENDING, BLOWING OUT THE DEFICIT, NEARLY
TRIPLING THE NATIONAL DEBT. YOU DIDN'T HAVE QUANTITATIVE
EASING HAPPENING ALONGSIDE THIS
OR EVEN A FRIENDLY CENTRAL BANK. YOU HAD PAUL VOLCKER. INTEREST RATES WERE DOUBLE DIGIT
TERRITORY. AND WHAT HAPPENED? IT ALL WORKED BEAUTIFULLY IN
EVERY PIECE OF LEGISLATION THAT
CONGRESS AUTHORIZED, THE CENTRAL BANK CLEARED THE PAYMENTS. THEY MAKE THE PAYMENTS ON BEHALF
OF THE U.S. TREASURY WHEN THEY
ARE AUTHORIZED BY CONGRESS. THAT'S HOW IT WORKED UNDER
REAGAN. THAT'S HOW IT WORKED UNDER BUSH. THAT'S HOW IT WORKED UNDER
CLINTON AND OBAMA AND TRUMP AND
NOW UNDER BIDEN. SO MMT IS A DESCRIPTION OF THE
MECHANICS OF GOVERNMENT FINANCE,
HOW IT WORKS. NOT A PROPOSAL TO HAVE CENTRAL
BANKS MONETIZE THE DEBT OR
FINANCE GOVERNMENTS OR ANY OF THE REST OF IT. SO LET'S SET ALL OF THAT ASIDE. NOW, ON THE TAX STUFF. IF ARMINE IS CONFUSED ABOUT THE
ROLE OF TAXES AND MMT, LET'S
ADDRESS THAT, BECAUSE IT'S IMPORTANT. SO WHAT MMT RECOGNIZES IS THAT
TAXES ARE NOT IMPORTANT AS
PAY-FORS, THAT THEY DON'T FINANCE THE GOVERNMENT'S
SPENDING, BUT THEY ARE
IMPORTANT. THEY DO IMPORTANT THINGS. SO WHAT HAPPENS WHEN THE
GOVERNMENT TAXES A DOLLAR AWAY
FROM ME. EVERY DOLLAR THAT'S TAXED AWAY
FROM ME IS A DOLLAR I DON'T HAVE
AND THEREFORE CAN'T SPEND INTO THE ECONOMY. SO WHEN CONGRESS SAYS, I WANT TO
SPEND TRILLIONS OF DOLLARS
INVESTING IN INFRASTRUCTURE, REBUILDING ROADS AND BRIDGES,
DOING CHILD CARE AND ELDER CARE,
SOME FREE COLLEGE AND HEALTH CARE AND ALL THE REST OF IT,
THEY CAN COMMIT TRILLIONS AND
TRILLIONS OF DOLLARS AND THE PAYMENTS WILL GO OUT. NOW, THE QUESTION IS: HOW LONG
CAN CONGRESS CONTINUE TO SIMPLY
SPEND MONEY INTO THE ECONOMY BEFORE IT NEEDS TO WORRY ABOUT
OFFSETTING SOME OF THAT SPENDING
WITH HIGHER TAXES OR WITH CUTS TO OTHER PARTS OF THE BUDGET,
AND THAT'S INFLATION --
>> Steve: FORGIVE ME. LET ME JUMP IN HERE. WE'RE DOWN TO OUR LAST MINUTE
AND I'M GOING TO LET THAT
RHETORICAL QUESTION EXIST IN THE ETHER WHILE I ASK ARMINE THE
LAST QUESTION HERE, WHICH IS: WE
CLEARLY HAVE BEEN THROUGH A PERIOD OF TIME RIGHT NOW TO
FIGHT THE CORONA VIRUS WHERE
DEFICITS HAVE NOT MATTERED AT ALL. ARE YOU CONCERNED THAT WE'RE
ABOUT TO MOVE INTO A TIME OF
INCREASING FISCAL RESTRAINT BECAUSE OF THAT? >> Armine: OH, GOSH, STEVE. TALK ABOUT AN EASY QUESTION. I THINK IT DEPENDS ON WHO WE
VOTE FOR. AND WHO WE VOTE FOR DEPENDS ON
THE BEAUTY CONTEST OF IDEAS THAT
IS PUT IN FRONT OF US AS VOTERS ON WHAT WE SAY ARE THE BEST WAYS
TO PROCEED TOGETHER IN THE
FUTURE. AND I CANNOT GUESS WHAT THE
RHETORIC WILL BE AROUND WHETHER
A SMALLER GOVERNMENT IS A BETTER THING OR A BIGGER GOVERNMENT IS
A BETTER THING OR WHETHER IT'S
ABOUT SIZE AT ALL, AS I SAID BEFORE, OR RATHER A COMMON
PURPOSE. SO I DON'T KNOW WHETHER WE ARE
HEADING INTO ANOTHER ERA OF
AUSTERITY. BUT IT WILL BE A CASE OF
COMPETITION OF NARRATIVES. IT WILL NOT BE A TECHNOCRATIC
DISCUSSION ABOUT WHERE DOES THE
MONEY COME FROM. IT WILL BE WHO WINS YOUR HEART
AND MIND WITH THE PITCH THEY PUT
IN FRONT OF YOU WHEN IT COMES TIME TO GIVE SOMEBODY THE POWER
TO MAKE THE DECISIONS ON OUR
BEHALF. >> Steve: I CAN'T WAIT TO SEE
WHICH POLITICIAN QUOTES MAE WEST
FIRST. STEPHANIE KELTON FROM NEW YORK
AND CHRIS RAGAN IN MONTREAL,
ARMINE YALNIZYAN IN THE BIG SMOKE. IT'S GREAT TO HAVE ALL OF YOU ON
TVO TONIGHT. THANKS SO MUCH. >> Stephanie: THANK YOU. >> Chris: THANK YOU. >> Armine: IT WAS GREAT!
