devil solely stands for in terms of globalization anti protectionist sentiment that said remember that the devil salit likes hearing from powell last year we saw an historic speech from chinese president xi jinping which was welcomed by the devil salit here they wanted to hear what he had to say despite the fact that it remains some mystery over the openness of the communist countries economy so perhaps they ll be listening closely to what donald trump has to say here they can t ignore the fact that he is the leader of the world s largest economy the i.m.f. christine legarde today talked about the shape of the global economy so tell us are we looking. these national monetary fund seems relatively optimistic about the shape of the global economy going forward it s revised its growth estimate for this year and for the next year by zero point two percent to stand at three point nine percent is said that growth is coming from europe it s
say that was already reinvested in those countries. so if you built a new factory in germany, then you re not going to tear down the factory, sell it for scrap and bring it back. but there s a significant amount of cash that could come back, and in the future, more money could be repatriated. but i agree. the entire $4 trillion is not coming back. the assets are not being sold. it s a portion of it. maya mcgin eas i say to people, if this growth estimate the government keeps putting out doesn t come to pass, that s fairly serious. if i say that we re not going to get that kind of growth and i m wrong, i just look foolish. but if the people who have passed this bill on the backs of the idea the growth will overcome the deficit are wrong, then we could increase the deficit by 10% over ten years. i completely agree we re taking a major gamble based on magical growth numbers tharpt pretty much made up at a time we cannot afford to because we have not been in this territory before where
would raise your model, raising more than $1 trillion quite comfortably. what is the biggest difference between the assumptions in your model and assumptions in a joint tax committee? the joint committee uses a closed economy model assuming the united states the closed economy so anytime the government runs deficits that crowd out private borrowing, raises interest rates and adds to the borrowing costs and slows the economy. we have an open economy model assuming global capital markets won t be affected by a little bit of additional government borrowing which is why our models prove a lot more growth. paul: what about the argument of the deficit that it will increase the deficit by that amount, in the growth estimate which i understand the closed economy model, a crucial point you make but what about the growth impact of cutting the corporate rate like the bill
reporter: your argument, that would raise your model, raising more than $1 trillion quite comfortably. what is the biggest difference between the assumptions in your model and assumptions in a joint tax committee? the joint committee uses a closed economy model assuming the united states the closed economy so anytime the government runs deficits that crowd out private borrowing, raises interest rates and adds to the borrowing costs and slows the economy. we have an open economy model assuming global capital markets won t be affected by a little bit of additional government borrowing which is why our models prove a lot more growth. paul: what about the argument of the deficit that it will increase the deficit by that amount, in the growth estimate which i understand the closed economy model, a crucial point you make but what about the
political support for those the reality will be, because you and i discussed it during the sequester. the deficit will be bigger ten years from now than it is today, probably. it s a trajectory that we re on. at that point is becomes hard for people to say, of course, we ve got a tax cut. i can t take that away but it will ultimately affect the deficit and a higher deficit is going to affect people who are net recipients of money from the government. i think you ve emphasized over and over over the years that in the long run, there s a big deficit problem that needs to be addressed by policymakers. sure ponge. on a bipartisan ways bassis. that s been shared by economists on both sides of the aisle. let s say we get the high end of our growth estimate, 5%. gdp ten years from now is going to be at about $28 trillion. and so 5% of $28 trillion is 1.4, right? and so $1.4 trillion is a heck of a lot more money for this tax