A 2nd time in power in 2020 the impeachment inquiry is a scam join us for the latest developments on al jazeera. Hi im Steve Clemons and i have a question for you are you concerned that the worlds economy is more fragile than anyone is admitting lets get to the bottom line. You can always find doomsday predictions telling you that the dollar is on the verge of collapse or the Global Financial system is in serious danger but how much of it is true lets look at this clock this is a live shot of the u. S. National debt clock in new york its not 100 percent accurate but it gives you a good estimate of the American National deficit right now earlier this year it pushed well beyond 20 trillion dollars its 22. 00 trillion dollars now but what does that mean for the United States and for the world is the sky about to fall what do we really need to be worried about and what trend should we be paying attention to fortunately we have 3 people in the room who have all the answers to these questions sandra to v. T. Is c. E. O. Of the Global Consultancy Firm beyond global and shes author of super hubs how the financial elite and their Networks Rule our world edward luce is the chief u. S. Commentator for the Financial Times and doug redeker who has represented the u. S. And the executive board of the International Monetary fund is also a top leader at the World Economic forum in davos its so great to be with all of you here today. For joining me and let me just start out were looking at the National Debt clock is that something that we should care about or is it just a number show in principle you should always care about the level of national why that is that because its measure of what you can afford in the future as well as today id say that the absolute number 23 trillion whatever it might be. Isnt as important as the share of g. D. P. And its still considerably below 100 percent of g. D. P. In the United States particularly if you only include publicly held debt that is that as bond markets called that no debt as implied by what we Social Security. In the future in the next 2030 years whatever that might be its actually not that and so numbers like 22 trillion. They are just numbers what matters is ratios and the ratio compared to say china compared to a lot of europe and compared to parts of the United States history particularly after the 2nd world war is not that high what matters is will growth exceed interest but i want to hear you say its really a number when obama came into office that clock was around 10 trillion dollars now its about 2020 trillion dollars when winter came in its 2 trillion dollars youre now and youre saying that we really need to worry about a debt debt to g. D. P. Ratio which i think the United States is a is is about 90 percent there are different numbers depending on how you can do you know what the right number is virtually and somewhere around i mean there are different ways of calculated lets call it 90 plus so when i do so with that. So give me give me give us some other numbers like what does japan at i mean japan is going to be staggered japan is well north of 200 percent of g. D. P. Debt to g. D. P. And japan is always considered an outlier whenever you have those great graphs and charts theres always the question do you include japan or do you do that little squiggly thing because if you include japan its such an outlier that everybody else is down here and japan is up there. But japan is a very different economic model because its a different social model is different political model japan is homogeneous japan has outlasted every economic bear assumption for years on the assumption that someday the japanese will pull together and as a homogenous culture they will bear any costs an absurd amount of debt to g. D. P. But let me go back to my made it to era point so i am more worried because i think its not a number that bothers me youre right 22 trillion 23 trillion i mean its an absurd or whatever number that does bother you so what bothers me is the deficit more than the debt because the deficit which is roughly a trillion dollars a year in good times in the u. S. Right now an example ministration means that people are getting used to things that we are borrowing to pay for it so its not just the sum total of the outstanding debt stock its the fact that an ongoing basis we are now building up obligations to our people and to other government functions that need to be paid for on a rolling basis so its not that under the Obama Administration as a means by which to respond to the financial crisis we had a stimulus which then rolled off as the economy picked up in the crisis became something that we take care of me let me just let me just make your point for you in a way and in 2016 the National Deficit was 585000000000. 00 and that has grown steadily every year now in 2100 its 1. 00 trillion 1. 11 trillion dollars and as you said its likely to continue to grow and so put this in real terms i mean these are numbers right now what are we not able to do what is the United States not able to do because of this deficit thats building and creating future obligations so i wouldnt look at it that way because we are able to do anything we want right now if we just consider that borrowing is a costly sexercise right whats happened in the world over the past. Its called the past decades but certainly in the past decade and certainly in the past recent few years is no longer do countries borrow on the expectation that they will repay they borrow on the expectation that they will refinance and in the 0 or low or negative Interest Rate environment thats a costless exercise you just borrow because youre actually getting paid in germanys case youre getting paid for the privilege of borrowing so thats a great thing but thats not necessarily going to last forever in fact i would argue its impossible to believe its going to last forever so at some point these low absurdly low negative Interest Rate borrowing costs are going to turn around and since youre not being youre not borrowing on the basis of an ability to repay it warring on the basis of an ability to refinance when those refinancing costs go up wheres the money coming just because i know youre going to bring sandra in a very quick point im not sure youre disagreeing with me. Were talking about whether the tax is being used well and id agree entirely with these deficits that weve seen generated in the last 23 years under trump have been wasted on the corporate sector that was already highly profitable that was already by the story right buying back shares with david m. So there was no so they were investing capacity having this added to the economy that would be a different thing from a sickly basically shelving it a stock buyback showing in other ways are are things that are unproductive the do not out of the stuff that promised during the Election Campaign training infrastructure all the stuff he hasnt done since he was elected if the deficit was being used to raise future growth rates that i would have a and i suspect they would have a different view of whether the. Standard youve written about super hubs of the financial elites and as i understand it really the way this is a stacked deck if you will the Global Economy in certain ways and so be it said in your purse. Specked if what doug just shared and but doug just zeroed in that this is in a way a stacked deck and that the numbers do matter but youve written that these folks are doing it purposely well let me differentiate i think after the financial crisis of 2008 the debt that was taken on was a bug not a feature i think since President Trump has taken over its become a feature not a bug and i would say that dead is one risk and traction with growth but also risks have the nasty habit of interacting with each other and exacerbating each other so i think of another risk that is very dangerous when it comes together with debt is the global trade war because that will weigh on growth and potential long term globalization because we see protectionism all over the world so i think when you take all these forests together and the fact that since 2008 the world has become more interconnected technical progress has been exponential. I just think that we cannot its impossible to say what the black swan will be when a crisis will happen and what will trigger it but that the whole system as such has become more fragile as a fact so just how do you look at both risks and then the status of the dollar and the status of the u. S. Economy the predominant position that america has in the world today are you still worried at all about that or do you think that actually were overhyping that fragility so i would i would divide into 2 things the dollar and the Financial Market supremacy right the New York Stock Exchange as you see that sort of listen thing on the on the dollar itself what i guess none of us and to submit it was that you were going to have this bullying approach by the u. S. President that effectively because remember dollar values as any currency values have to be valued against Something Else so if you are tamping down the economic. Potential and activity of another country then by definition their currency is probably going to be weaker these a v. The dollar so the us is a very resilient economy and has performed very well in spite of because its been a lean. The us economy has done well because it has intrinsic benefits and because as we just talked about youve got these deficits that weve incurred taken on to stimulate when stimulus might not have even been necessary but were doing well the u. S. Economy is doing well but because of the trade wars because of the abuse i would argue of sanctions and tariffs and other means youre actually seeing a tamping down of confidence in other countries and other major currencies so the dollar continues to appreciate which is exactly what of course donald trump doesnt want to see and why hes been jawboning jay powell to try and reduce u. S. Interest rates thats a separate issue the dollar so far has been stronger than the president would like it has been very resilient i would argue it is going to continue to be resilient however it is resilient in spite of the fact that most of the rest of the world views dollar supremacy no longer as a necessarily a good thing or even something that they are willing to tolerate for the the greater global good they actually view it as there is no alternative there is an effort now on multiple levels to see if they can find an alternative but for a variety of reasons its very difficult to see that there is going to be one cant the Chinese Renminbi eventually be an alternate will eventually is a long time but less so in the forseeable future the problem with the room in b. Is. The room in b. Is a managed currency so nobody believes that the chinese economy much less the chinese. Currency is actually set by the markets so if youre going to be using it as a reserve currency or as a currency for your transactions and trade you want to know that the value is either going to be retained so its stable because its fully fairly valued or. Because you can anticipate whats going to happen basically Market Driven mechanisms in the chinese case it is not implicitly is explicitly a tool of the Chinese Government and so therefore the remove me as an attractive alternative to the dollar still has a long way to introduce is going to focus for a minute and would love your view if if donald trump is pounding on the chairman of the Federal Reserve board jay powell as doug just shared. On the level of Interest Rates doesnt that reduce the sense of independence of the u. S. Dollar and whats going to do it you have a kind of china mimicry where the Central Government is pounding on economic authorities to get economic results here is there any risk in Donald Trumps behavior well yes of course he wants to be an autocrat and so he behaves like an autocrat and including those that he criticizes but i think the effect will still be that the dollar will be will remain strong only because its the best house in the neighborhood but i think part of the the exorbitant privilege the fact that the u. S. Can print dollars is also still considered a safe haven by trump because of the institutions which while he has tried to undermine them and he has arguably weakened checks and balances it still compared to other countries relatively secure and i love this analogy best house in the neighborhood where santa wrong that this is the best house in the neighborhood or just every other house just really sucks so bad that i think. To rephrase what theyre both saying is that the dollar is the tortoise toward you know the tallest dwarf is the told us 12 but to go back to the house analogy best house of the neighborhood as a former American Economic public official once said its not the wolf at the door its the termites in the foundation right so what might today the termites and the foundation. Political america is becoming increasingly ungovernable we have a president whos just discussing who is attacking one of the most secure. Situations in the federal system namely the u. S. Federal reserve. We have a separation of powers that isnt delivering political Decision Making but most importantly of all we have a budgetary situation that is increasingly if you look at the share a federal Budget Expenditures going on yesterday and not tomorrow and tomorrow means training young People Education infrastructure opportunities and environments in which big new business is a created particularly you know when demography is increasingly aging but what the budget is increasingly going on is Social Security medicare Interest Payments on debt on yesterday in other words and thats those are the termites of the foundation theres no one particular moment where you realize its not a sort of flash crisis its a gradual thing to which we get a clear let me ask you about that because i think why wouldnt there be a flash crisis as i look at markets in the past or the change in political power historically something comes to mind is Great Britain in the 1950 s. In the suez crisis where with this single crisis it was became a punctuation point that the world realized your home country was no longer able to be the m. P. R. Instrument which drew support from the pound right eisenhower a little bit but it was britains dependence it raises the question with their minds in the in their framework are we not paying enough attention to the fact that tomorrow we may look at a very different. American situation with with regard to the rest of the world and his timing way once famously or one of his characters once famously said how did you go bankrupt gradually then suddenly. So theyre not mutually exclusive the termites in the foundation eventual cause it to collapse if it goes on like that what could cause that. You know a crisis in the gulf where america basically because the people dont want to risk troops. And spend more money where. And it takes basically being the guarantor of supplies i suppose that could be an amount it could be dramatic reform to make chinas currency and liquid and deepen its Capital Markets that i find its less probable. Any number of cracks one of ants could cause this foundation to collapse but for the time being were talking about as i said earlier the told us 2 off the dollar the dollar is the least bad option available and id like to see this you know i think in the sense that whether we get a return of President Trump in the United States or you get. Elizabeth warren or Bernie Sanders any number of other candidates as well do you think that could have ramifications to push reset on the way the dollar is looked at in the world so i would say the its not just the dollar i think the big issue and its akin to what youre describing is about us in gauge men and the multilateral world order that we and the europeans created post world war 2 whether its Bretton Woods institutions the u. N. Or a wide range of the accepted institutions and norms the Global Trade Commerce finance economic. Everything i mean ironically you know this week the demario will cease to function as it was designed to tell our audience what. Has a dispute settlement board body which is supposed to have 7 judges called the appellate body the body it is supposed to have a minimum of 3 and as of december 10th. 2 of those judges terms expire and the u. S. Has withheld support for renewing or extending those terms so that as midnight december 10th there will only be one in power judge which is below the koran which means that the dispute settlement mechanism cannot function but again thats thats you know arcane stuff but were. Matters more i think then the deputy you know is this institutional framing of do we believe in these multilateral institutions or not and you were asking about what happens as a result of the 2020 elections here in the United States i would say that youve got either a return to normal or you dont and normal to me lets say they dont is the reelection of donald trump or as you said you know elizabeth Warren Bernie sanders who are really seeking a revolution on a lot of Different Levels not just military engagement and isolationism versus interventionism just the u. S. Role in the world a joe biden style presidency would be more continuity go back to quote normal and in a normal environment then i think the u. S. Dollar and the u. S. Preeminence in Financial Markets and economic prowess around the world is restored it wont go back to the way it was but it largely stays on the status quo before the Trump Administration sought to challenge that multilateral system if we are seeing a reelection of donald trump or Something Like a warren presidency where she seeks to overtly change the paradigm then you are looking at an increasing motivation of other countries to to create new institutions new mechanisms i still dont see a challenge to the dollar but i do see challenges to business as usual are we going to go back to normal if were not then all bets are off sandra. What doug just described this is something that i see going on globally that that the pressures of whether the system goes back to normal and pushes reset or changes and if you look at the political dynamics in advanced industrial democracies one after the other the rise of populism is essentially a rejection of the social contract and the economic contract so were talking at a big macro level about the dollar and global influence and markets but beneath that and the way growth has been shared has created incredible political tumble and change and im interested in your insights again coming back to super hubs in the financial elite. Do they get the message that the equation is not working that even if they they want to keep things back where they were but are they willing to tweak it so that we get something between dougs 1st option and 2nd option. Yes so in my book super apps i explain the Financial System as a complex self organizing system that is based on Network Theory i explain it with Network Theory that sounds complicated but it actually makes it easier to understand and in this network were all nodes and super hubs are the center of nodes and i do think that the super Work Together very effectively after the crime financial crisis of 2008 where i said the redistribution from the 99 percent to the one percent was a bug not the feature and or a trump has turned it around to an extreme and i think so its now resilient its going to be with us well its now increased exponentially and donald trump knows that if there are checks and balances he can brain he wont have absolute power so that is the purpose why surprisingly effectively he has undermined global institutions which are based on our common norms and values race and disrupting that disrupt stability and creates new risks but i would like to draw attention to another fact because we are focusing really on the Financial System while we must not forget the fact that the u. S. Is still so strong with regard to the Financial System and the dollars of monopolism you know through due to globalization and technical progress we are seeing the tech world in the tech world is increasingly more venturing over into the financial world the guys are getting bigger and bigger peter teal writes up a book and all right getting more parts i think its a parallel danger thank you ed let me just ask you the last couple of minutes as you look at the dashboard of the Global Economy to be americas place in it what are the parts of it that you think are most important to look at today i think we havent talked enough about china and india both of which are going to synchronize slowed. China has provided more of the source of Global Demand for Global Growth since the 2008 crisis in the United States more than the u. S. Consumer yes. And china is now its now slowing india is slowing very rapidly so that there is a global synchronized slowdown going on. But you know weve got the sort of twin engines of the east down quite right Larry Summers used to talk about the World Economy flying on the american can back of the American Consumer is that true again its very least a twin engine but actually its more than 20 so its getting more complex but the whole of slowing but the part of the world that needs to be growing rapidly is slowing most markedly and thats asia what is your black swan that we should be thinking about oh i think technological decoupling i think theres a very real risk accelerating every day that youre going to end up in the very near future with a chinese bloc a u. S. Bloc and the europeans caught in the middle and everybody else caught in the middle without the half the u. S. Brings to the table so the economy of the 21st century is going to be very much technologically driven 5 g. Is the start and that infrastructure is clearly now going to be divided and that can happen and they can still also use the dollar they can still use the dollar but i would say my black swan is that you could end up with not a central bank created currency as a threat to the u. S. Dollar but you end up with some form of the Digital Currency the does end up being so thats a crypto currency a bit coins well i wouldnt call it a big coin and i dont think anybodys come up with the right model yet but in terms of your black swan scenario Facebooks Libra its not going to be that either but there are a lot of impediments to it but given the suspicions of central bank created reserve currencies the idea of this technological barak ation in the currency realm is not something that i would say 30 seconds on your black swan well theres an embarrassment of riches just my answer. And i the greatest was actually that im seeing is inequality which is increasing exponentially 20153080 people have as much wealth 3600000000 people in the world and now thats 80 people versus 3600000000 people yes and 2001000 that. On the part of the billionaires to 26 from 80 to 26 now have as much as 3800000000 people so this is said to further increase also due to technological you know the tech giants so its getting worse and worse and less stable i love spending time with you but its kind of depressing in some way things are not all well in the economic house id like to thank you all for being with us doug redeker a senior fellow in Global Economy a Development Program at Brookings Institution edward luce chief u. S. Commentator for the Financial Times and sandra levy c. E. O. Of beyond global in new york thank you all so much for being with me today before we get to the bottom line lets go back to new york there is the u. S. National debt clock that we saw at the beginning of the show notice any difference its not precise but more than 70000000. 00 in debt was added in half an hour and for now none of that makes a difference according to our experts so what does matter Government Debt that cripples new investment trade wars that slow growth inequality were just a few dozen 1000000000 billionaires hold more wealth than 3 and a half 1000000000 people and Tech Companies that today are more powerful than governments fear is replacing trust in the world and that may cause future earthquakes shaking up the Global Economy creating a less Mighty Dollar and changing americas place in the world and thats the bottom line. December on aljazeera as this year comes to an end we look ahead to 2020 and the stories that may shake the year people in power investigates the shocking truth of disabled people in Eastern Europe skakel deciding the future of the u. K. And its place in europe will the general election result the breaks it is she a story of palestinian women rising above market and struggling for freedom against all on and the worlds best Football Team is fed to cattle for the fee for Club World Cup 29. 00 g. Join us the special coverage. December on aljazeera. Fishing boats from north korea are washing up on the shores of japan. Some of carrying dead bodies. One to one east investigates these mysterious go ships on aljazeera. New yorkers are very receptive to aljazeera because it is such an International City theyre very interested in that global perspective that al jazeera provides. Big stories generate found some news of headlines these protests are saying down with the system down with all of the parts with different angles from different perspectives just because we came to prison doesnt mean the right stuff that the gate separate the spin from the facts the western media jumps on stories without taking them to the misinformation from the journalism its about telling the stories of those human beings on the ground with the listening post on aljazeera. This is aljazeera. Theres been proud of and this is the news hour live from doha coming up in the next 60 minutes. Thought she is a North Eastern india impose a curfew after widespread protests against a citizenship bill making its way through parliament. Young mans later on son search a defense a country against genocide charges at the International Court of justice. Also ahead the final day of campaigning in the u. K. Its general election where in one of the battlegrounds where some residents are considering a tactical vote its. About 40 International Test cricket returns to pakistan for the 1st time in more than a decade details of their match against sri lanka later in the program. The upper house of Indias Parliament is voting on a bill that will grant citizenship to minorities who face religious persecution in pakistan and bangladesh and a gonna stand bought the bill has stood controversy because it excludes muslim refugees from the 3 neighboring countries opposition politicians and Rights Groups say the exclusion of muslims as part of the governments hindu nationalist agenda defending the bill the home minister says Indias Muslim citizens have nothing to fear. It is a question of giving citizenship to people who have come because of religious persecution the minorities or any muslims need not worry i want to say this clearly