there isn t going to be an economic down turn. there are signs that is happening. everything from the inverted yield curve. but i think the biggest issue really is the massive amounts of uncertainty that now exist in our economy. and you layer that on top of these unsustainable debt levels which the cbo referenced yesterday in its big report that came out and we are very vulnerable. we are skating on thin ice. so any additional amounts of uncertainty or pessimism could put us in a recession. on top of the immediate risks of recession which i do think are likely to happen just because of the normal business cycle, you also have the fact that economic growth is going to be lower in this country going forward than it has been in the past because of the age k of the population. this is something we have known about. we failed to address. we have real challenges on a number of fronts from helping to grow the economy, also dealing with these important issues of mobility and income insecurity
effective stimulus and the result would be even higher debt level. i would say on this front, we know beer going have another recession. the business cycle still exists. we should put in place a plan that you have a fiscal package in the short run that reduces the economy and tie it s to longer-term savings that kick in when the economy is strong again. if we had done that last time, we would be in better shape this time. we know politicians are unwilling to make the hard choices on the debt front the so putting them in place ahead of time might be the best hope we have. i have known you a long time, maya. i am smiling because you ve said this for a long time. one day maybe somebody would actually listen to you. maya is the president for the committee for a responsible federal budget. thank you for joining me, maya. that wraps up the hour for me. i will see you back here tomorrow at 1:00 p.m. eastern and 3:00 p.m. eastern. you can watch or listen to the show, by the way, on the road
unprecedented levels if lawmakers don t step in to change laws. that alarming news from the congressional budget office. cristina alesci is here. talk to us about the impact of the u.s. carrying debt. you re absolutely right, the impact right now is life is a party, it s sort of like throwing down your credit card at a bar with your friends. it feels really good in the moment, in the long term, what our own government said today, the debt level right now poses or in the future poses a substantial risk to the u.s. economy. as you point out this is happening under a republican administration, this is supposed to be the party of fiscal restraint, they criticize democrats all the time for the spend spend spend policies, and yet this administration has cut taxes to the tune of $1.5 trillion. at the same time, increased spending. i just want to put some context around this.
that the u.s. has a higher debt capacity than our current debt level, nobody s going to argue with that. yes, we can t that s why the markets don t freak out as the deficit has gotten bigger. the problem with deficits, of course, is that you have to pay back the money. and it crowds out other priorities that we have rising debt. because there is interest. it s not free. yeah, it s not free. that said, we can t afford it. and it s not really about mmt. mmt as a theory is confused. the argument that the u.s. can afford to run deficits, especially if it s for investing in things that are going to have a future payoff, you know we can do that because we ve been doing it for things that aren t even investments. we have now for the last two republican presidents had massive increases in the deficit
but so far italy is not changing course the government wants to deliver on campaign promises which include early retirement and increased spending on social services the problem is italy s debt as high as one hundred thirty percent of gross domestic product only greece has an even higher debt level e.u. regulations cap any country s debt at sixty percent of annual economic output financial markets are alarmed front pages warn of rising interest rates and banks are worried there are powerful players in any budget debate as they can close the spigot at any time and dry up the government spending on the streets the mood is tense. bitter because of the think they were discussing this with the appropriate seriousness we should brace for the worst. and there will be i think we re on the wrong track with governments made promises that can t be kept and now we re moving in the wrong direction and you know what. on wednesday both the government