problems. short run i think the bond market can handle the deficit. and you say chances for fiscal restraint in this final deficit deal is 80% there will be some restraint you think? i do think so. i can t envision a scenario where there is nothing done to appease the republicans in the house at the very last minute, they will demand something and i think that that something will be fiscal restraint or maybe even a spending freeze. any chance that social security or medicare will be cut or tweaked somehow? i got to think it is zero. i think chances of social security changes are virtually nil. chances of tax hikes virtually nil. chances of defense spending increase, there will be an increase but not as robust as the last couple of years. so the debt ceiling just weeks arm really before people feel that. we have a long term problem and
billion that need to be found over the course of the next few years. so the fiscal statement monday, we expect it to be next monday, we expect it to be next monday, is likely to include cuts to spending, potentially allowing welfare benefits to rise in line with earnings rather than inflation and possibly cuts to the international aid budget and delaying spending on capital projects. they also need to be some tax increases, likely to be a spending freeze on tax thresholds, possibly some windfall taxes on banks and on energy companies for example. so the focus is going to be very much on how do you fill that gap that remains in public finances? ., , , ., finances? and as you say, we are expecting finances? and as you say, we are expecting the finances? and as you say, we are expecting the fiscal - finances? and as you say, we are expecting the fiscal event on 31st of october, monday next
whenever, march of 2021. you don t want to do that. what you really want to do, if you want to restore some confidence and stabilize the economy. how about a spending freeze and congress does nothing on the spending side, zero. the semi conductor thing needs to be looked at carefully. a $300 billion bill point number one. point two. semi conductor prices, which were high coming out of the pandemic, they are coming down. they are coming down in the private investment sector, private investment. there is over 200 billion dollars that has been invested in the chip sector. we don t need government money, okay? it s just a bunch of corporal welfare and industrial policy. intel, which ain t the company it used to be, is building a plant in germany. so i don t want the u.s.
are trying to sugarcoat it people are going to see right through it. so it s a terrible ploy. i mean, look, you want to end inflation? i ve got a plan. we will call it the kudlow hanley plan because i think you re moving up the ladder to a b or b+ in economics. sean: thanks a lot. i got a bad grade last week. i am picking it up. i m actually picking it up. a domestic spending freeze, cut tax rates for supply-side economic growth, open up the spigots for drilling of oil and gas and pipelines. sean: and fracking. do regular business yeah, you can frack. deregulate all business, stop these price controls and the fed is going to have to raise interest rates and take some cash out of the economy. that would be an anti-inflation plan. but that s not what you sign the paper today. what you saw in the paper today is no oil and gas production increases, more build back
john: well, i would ask larry what he thought of the president s op-ed, but i think he s got to prep for his show. sandra: he said off the top, i believe you told us, that he heard and read nothing new in that piece. larry: john, no no increase in oil and gas production, no spending freeze, and a continuation. i forgot to mention earlier, they want to raise taxes on the wealthy across the board. look, what s changed? i didn t see anything that changed. the only fun thing here will be the meeting between president biden and fed chair jay powell. now, that s going to be fun when jay says i ve got to take the interest rate above the inflation rate, which is depending on how you count it, 7 or 8%. sandra: that gives you a great show at 4:00. we should know something by then. john: i wonder what people would be writing if president trump met with j. powell?