Neon signs and it is kind of dirty on purpose. Right next door to the pot shop. We are cool. Not that i no that is where you buy pot. Abcaseven ipot. [laughter] i have heard. But you know you have this very comeau we are not a bank feel on purpose. I think the post office is closer to them than they are to the banks. In your conversations with elective and nonelected officials in the federal government kind of reaction are you getting . So far i will telli will tell you who has been supportive, and you wont be surprised. Senator warren early on. Very supportive. Senator brown recently, Ranking Member of the Senate Ranking democrats. Bernie sanders recently joined and very publicly. And so so for people who are focused on the stuff have not gained wide traction, but the conversations have just started. Hopefully more. It is best to not be involved in legislative. Legislative. The postmaster general currently is not set either way. The 1st female postmaster general. Less i sound a little ignorant. I have relatives who have fallen victim to payday loan companies. It has been difficult. They have dug themselves into a whole that they just cant get out of. As people live from paycheck to paycheck and deal in a cash economy. One of the purposes was to encourage economy. For many of these people economy, banking, money, they are important to them. They dont think longterm. How would the postal bank encouragesbank encourages people to live more fruitfully are economically or how would it be a way for them to manage their money better, and two in the bank would help them manage the money . As you said, they live paychecktopaycheck. Going back to 1910, all of am money coming into the postal make in 1910 came from peoples mattress and stalking. Theida data shows there is a lof money that is not in the banks. There is people that have money to safe but it is ending up on cashier on a prepaid debt card. If you have cash in your wallet it is gone. So i think having a place and this is where japan and germany examples prove something we actually cant speculate. They have more savers there. They have a culture of saving and just per capita much more than the u. S. Ment a japanese scholar claims the postal bank caused that. It is possible that once you have a place to put your money more people would save. But i cannot talk on that. I would hope. [inaudible question] wednesday, booktv in prime time features books about drone warfare. At 8 p. M. , scott shane on objective troy. A terrorist, a president and the rise of the drone. Then strategic failure and how president obamas drone warfare, defense cuts and amateur military impaired america. And the book unmanned drones after that. Drone warfare starting at 8 p. M. Eastern on cspan2. On our next washington journal we talk to Supreme Court reporter david savage of the la time abouts about the death of Justice Scalia over the weekend and the vacancy left on the court. Than aaron cline of the bipartisan central on the Federal Reserve and the possible changes to Interest Rates. You can join the conversation on the phone or by facebook and twitter. Washington journal live every morning at 7 a. M. On cspan. In the early 1980s a lot of the largest banks were on the brink of collapse because they lent too much money to latin america. So they required banks to hold more Equity Capital meaning if they lost money because of a bad decision it would not cause them to default but come out of the shareholders capital. You see bank Equity Capital rising. But when banks are forced to hold more equity they have to share more profits and they are less profitable. So lending opportunities went toward shadow banks. Companies like leiman brothers and fannie mae and freddy mack. As the banks became safer they became less important. By the time of the financing crisis you had lis lending and leverage that was built up outside of the bank and we were not aware of it. A similar phenomena can be observed with natural disasters. Seems like we have one after another. Hurrica hurrica Hurricane Katrina and hurricane rita and this tells you see are seeing billion disasters. And you would see large spikes as we enter the 2000s. There is a lot of concern this is the result of global warning especially with flooding and hurricanes. There is scientific agreement on this but that is not the main reason the disasters are going up. The main reason is because we are putting more wealth on the coast where they are more vulnerable to mother nature. They are vulnerable for the same reason they are prosperous reason do is have cities. Close to water helps the transit and that is true for millions of years. It is good for transport links. It turns out people like to live next to water. It is temperate and pleasant. The flood plain is where the soil was the richest. This chart shows the buildup over the value of structure over the hundred year flood plane of new york city. As you can see nearly based on Economic Development it was guaranteed a storm hitting now was more costly than 1938 with the greg new england haur hurricane. This is an interesting picture. A lot of Lower Manhattan is built on land fifills. A lot of land was reclaimed here to expand the possibility of putting people in such productive places. If you look at the red line, that is the original outline of Lower Manhattan. Everything else was a landfill in 1609. That is the area flooded by super sandy in 2012. You can see how closely they matched each other. It was inevitable new york city was going to be flooded like this because it was calling for disaster from the moment it was founded. Because new york city gets getting wealthier, and more prosperous, it is eninevitable another hurricane will come along and be more damaging than hurricane. Once or twice ever 50 years a large hurricane, that is not very intense, but wide, hits the city and does image. The center for strategic and International Studies looks at the oil market and experts from the industry testify. We bring it to you live at 10 a. M. Eastern on cspan. Every election cycle reminds us how important it is for citizens to be informed. Cspan is a home for political junkies and track the news. There are a lot of cspan fans on the hill. My colleagues will say i saw you on cspan. There is so much cspan does to make sure people outside of the beltway know what is going on inside the beltway. Booktv sat down with menzie chinn to talk about his book lost decades. This interview was recorded on the campus of the university of wisconsinmadison. It is 20 minutes. Professor menzie chinn, your book, lost decades, how big is the u. S. Debt . Who owns it . What do we mean by own . Guest well the u. S. Debt is Something Like 14 trillion and about 7 of gdp. That is giving you a little perspective. It tells you it is an unprecedented amount in postwar history at least. Who is is owed to . Most of it is owed to other americans. Sometimes you can think of that has we are borrowing from ourselves. A sizable junk is owed to foreigners and that would be the chinese and various Oil Exporters. Host how do you quantify debt . What is considered u. S. Debt . Guest that is a complicated question. Most of the numbers you hear are debt owed by the u. S. Government. So that is actually the number i threw out. There is a lot of other debt including debt by households to banks, corporations to other corporations and to financial institutions. If i were to add up all of the debt it would be double counting. In fact, most of the time, as ec economist we talk about the net debt, and that works out to Something Like at the moment 25 of the gdp. That is a lot. But in and of itself it is not as problematic as certain times. The question isnt net debt. But the fact at certain times some corporations and some households get into trouble and they are unable to pay their debt and become insolvent and that ripples through the economy saying there is a 1 here but owed over here and it washes out. Institutions and households count on having assets and they loaned money to somebody and cant get it back. Corporations and firms have borrowed money and cant pay it back. And that results in a real debt crisis host lets talk about public debt. The 14 trillion of public debt; does that include future Social Security and medicare payments and things like that . Guest no, just the outstanding amount of treasury out there. What i will do is net out what is owed between accounts within the u. S. Federal government. So it is really just what is the debt that is outstanding that is being held by the public. Host profester chinn, what is a treasury . Guest that is the liability of the federal government directly issued by the federal government. Host do i own treasuries . Guest if you invest in a pension firm. I dont have, i think, anything. Typically we dont unless we, you know, you have it in some ira that is invested in some other fund. Maybe a savings bond would be the closest think a lot of us have seen. Host does the university of wisconsin have treasury . Guest that is a good question. Probab probably. Not the university itself but the retirement system the employees are invested in. Host we say the chinese are buying our debt. What does that mean . Guest well the way to think about it is the chinese were exporting a lot more than importing. They would, as a country, earn proceeds, and most in the form dollars. They exported stuff to the world and most of the goods are invoiced in dollars. If they are earning more from exports than spending on imported they will have a pile of Foreign Exchange accumulati g accumulating. You can get it in currency but that gets you zero interest. So typically it is held in the form of treasuries. When you hear someone saying the chinese have treasuries they are saying they are Holding Dollar assets mostly in the form of treasuries because treasuries are the safest assets in the world in a way because we have not defaulted on treasuries in a long time and they are easy to get in and out of. That is they are highly liquid. It is the ideal form in which to save in. That is why the chinese and many Oil Exporters like saudi arabia and kuwait wouldnt have their Foreign Exchange reserves in treasuries. Host as an economist is that a bad thing for the United States . Guest i dont think it is bad china holds them but i think it would be bad if the rest of the world keeps accumulating treasuries at a rapid pace because it means the United States is accumulating the debt at a rapid pace. One of the big author earth shaking things you dont hear about is china is running down its pile of foreign reserves. That is a sharp break with what happened over the last 15 years. We are getting in some sense what we wanted. The u. S. Government with the share of gdp and accumulating debt at a rapid pace and the United States isnt by as many tryin treasuries and then the price of treasuries will be lower and that is the thing with higher Interest Rates. So many offsets going on at the same time. But if emerging market countries, including china and Oil Exporters, tend to accumulate further treasuries that will put pressure on the Interest Rates. And Interest Rates have been unnaturally low. The title of the book is lost decades. What happened in 2008 that empoup empowered that ripple. Guest that is a good question. My key author and i want to put forward to all of the acronyms and other terms flying around there is one single underlying story repeated throughout history and that is for whatever reason governments encourage or on their own push through increased borrowing. Sometimes it is in the belief times are different and we can manage the increased borrowing in an efficient way and a safe way. So Allen Greenspan in the mid2000s said we are all borrowing much more but in essence we are smarter than we used to be and we have computers to manage risk and new theories about how to deal with risks and new derivatives that can help us manage risk. The idea we can borrow more is not as scary as it used to be. That is a dangerous idea. And a particularly dangerous idea because you get into trouble when you borrow a lot and the environment changes. And a lot of the environment looked like it was going to be repaid easily isnt. That is essentially 2008. It is the household borrowed because they thought the prices would keep going up so it made sense to borrow. The banks loaned and they also borrowed. Financial institutions borrowed. And they were able to evade regulations because they were outdated with respect to how much you had to reserve in terms of capital. You had financial deregulation and that is the direct governmental interventions. You had the government embarking on a spending free after the 2001 tax cut. We cut taxes in 2003 and that encouraged more borrowing. And we have the financial innovation. And that led to an increase in borrowing and that led to disparity until it didnt work and people said lets reassess this. The securities we issued. I dont think they are worth as much as we thought or