Welcome to hard talk, i am stephen sackur. A watershed moment in Global Economics. Big government is back as the Fail Safe Engine of Economic Growth, the joe Fail Safe Engine of Economic Growth, thejoe biden growth, the Joe Biden Administration growth, theJoe Biden Administration is pouring trillions of dollars into an ambitious rescue and Recovery Plan and the europeans are doing their best to keep up. Soaring debt and rising inflation, those fears seem to have been pushed aside. My guess is a claimed economist ken, once dubbed the godfather of austerity. Ken rogoff in massachusetts. Welcome to hardtalk. At several points of the last year, you have described what has happened to the Global Economy as a result of the pandemic as as a result of the pandemic as a unfolding catastrophe. Given what we see today, do you think you were a little bit too pessimistic . Pessimistic . Indeed. , particularly pessimistic . Indeed. , particularly the pessimistic . Indeed. , l particularly the vaccines pessimistic . Indeed. , particularly the vaccines have been able to come out faster and have been more a fact of all the Public Health experts who were telling me and telling us. That has really been what is turning things around more than anything and no, i had not predicted it, but it is not good enough, but it is better than what we had hoped. The . Than what we had hoped. They have ust than what we had hoped. They have just issued than what we had hoped. They have just issued their than what we had hoped. They have just issued their latest up have just issued their latest up some of where the Global Economy is and the Growth Forecast from around 5. 5 to 6 , which is a pretty extra in herfigure and suggest 6 , which is a pretty extra in her figure and suggest there is a resilience in the Global Economy and perhaps, we had not expected that. Yes economy and perhaps, we had not exnected that expected that. Yes and no, depends expected that. Yes and no, depends on expected that. Yes and no, depends on where expected that. Yes and no, depends on where you expected that. Yes and no, depends on where you are | expected that. Yes and no, | depends on where you are in expected that. Yes and no, depends on where you are in the world. The advanced economy, china had done better, but if you go to large parts of the world, we are seeing a decade of poverty, and most countries in the world will not get back to where they started until 2023 and so, it is pretty terrible and that is not even talking about within countries who have suffered the most. It has been a disaster, but i would still put this is the worst crisis, worse than the financial crisis. Financial crisis. Some talk about this financial crisis. Some talk about this Case Financial crisis. Some talk about this case shape financial crisis. Some talk about this case shape economy or by which they mean this to levers of the cave representing the growing divergence between the growing divergence between the rich world and the emerging economies. Do you see that as one of the greatest and most damaging legacies of covid i9 . A lot of the political conversations about what is happening within the wealthy countries, not compared to what is going on in countries like brazil and we have not even seen the financial fallout with the emerging markets piling up in the death, the debt they could run up into trouble. The world is suffering incredibly and we are looking at the political ramifications within our own countries and Around The World i think this will reverberate for a decade. I want to come back to that, but i do want to talk in detail to the United States and you said that only a few short weeks ago, you did not believe the us economy was going to get back to the per capita gdp that had beenin to the per capita gdp that had been in place in late 2019. Not possible until next year or the year after next. Again, this latest report suggest they believe the us will recover to that late 2019 point by the end of the next year. Do you acknowledge that you were wrong on that . ~ ,. ,. , on that . Thinki everyone has ramed on that . Thinki everyone has ramped up on that . Thinki everyone has ramped up their on that . Thinki everyone has ramped up their forecast. On that . Thinki everyone hasj ramped up their forecast. The ramped up theirforecast. The imf have been steadily doing it. The case of vaccinations, the opening up of the us economy and certainly the very strong Stimulus Thatjoe Biden has been successful in getting through. It looks like the us miraculously will be on pace to get back to where it started just two years after the start of the pandemic instead of what couldve been longer. Of the pandemic instead of what couldve been longer. Why . Why is it performed couldve been longer. Why . Why is it performed so couldve been longer. Why . Why is it performed so much couldve been longer. Why . Why is it performed so much better i is it performed so much better than you thought it would over the past year . I than you thought it would over the past year . The past year . I mean, overwhelmingly the past year . I mean, overwhelmingly its the past year . I mean, overwhelmingly its because the vaccines of calm and works better in the Public Health problem looks like knock on wood, as we say, it has been gradually tamed. That is what is getting people back in and creating the optimism and certainly the support from the government is playing a role in this. But, if the pandemic was not over, youre up legs horribly, and particularly, europe lags. Horribly, and particularly, eumpe lage europe lags. Former Chief Economist europe lags. Former Chief Economist as europe lags. Former Chief Economist as i europe lags. Former Chief Economist as i said europe lags. Former Chief Economist as i said in europe lags. Former Chief Economist as i said in my| economist as i said in my introduction, known in the press as the godfather of austerity. Now looking at a Joe Biden Administration that is pumping, lets say if they get their Infrastructure Spending plan through the congress, looking at injecting around 4 Trillion Us Dollars into the economy over the next few years will as a direct result of their rescue and recovery of covid 19 plan. Godfather of austerity, do you approve . I have never written about austerity and my work. The word does not appear in my 500 page book nor the concept, we are concerned about very high debt levels, but you can raise taxes and ive never written anything about taxing the rich more. But thatis about taxing the rich more. But that is thejoe biden propose to do. The initial stuff he is doing that is catastrophe relief. He is imposing something much stronger over the long run which will involve taxing corporations, taxing people, and to pay for it. That is a direction i have always supported and im glad to see he is doing that. He is doing that. Have you modified he is doing that. Have you modified your he is doing that. Have you modified your views he is doing that. Have you modified your views in he is doing that. Have you j modified your views in any he is doing that. Have you modified your views in any way . You to very carefully said that she did not write about austerity. I take the point. But you did write very specifically about the damaging nature of high levels of net National Debt in the us federal debt projected over the next couple of years is going to far surpass the 90 level by which you postulated things become very difficult and damaging for the economy and indeed, the Congressional Budget says the debt will grow to well over 100 , maybe hundred 7 of gdp and so, unless you resign from the earlier argument, you must think that is very dangerous. Let me see what my early argument was. It wasnt that things suddenly change your tickets very high, swerve a Cholesterol Level, tickets very high, swerve a Cholesterol Level, when your cholesterol Cholesterol Level, when your Cholesterol Level Cholesterol Level, when your Cholesterol Level goes Cholesterol Level, when your Cholesterol Level goes from | Cholesterol Level, when your i Cholesterol Level goes from 199 to 21, does me of a heart attack next day, itjust means youre more vulnerable. The reason that we have very high debt that youre more vulnerable side of stuff happens, you cannot react as aggressively to them, but he stuff to try. We are in a wartime situation and there will be the last 12 years since i wrote a paper on this that the Interest Rates have collapsed. They have simply collapsed. They have simply collapsed and so the government, at least the United States and the other economies have, they have borrowing from those not expected. Does the same as my Stock Markets are so crazy high. No one expected Interest Rates to be so low. Unfortunately, there are a lot of countries in the world, maybe most of countries in the world that do not have this luxury and theyre paying much higher Interest Rates and theyre still borrowing as they should in a crisis like this. But the situation is much more precarious. It but the situation is much more precarious precarious. It is interesting but ou precarious. It is interesting but you just precarious. It is interesting but you just use precarious. It is interesting but you just use the precarious. It is interesting but you just use the word | precarious. It is interesting but you just use the word crazy high to describe Stock Market Levels in the us and you said thatis levels in the us and you said that is all about the consistently low Interest Rates that we have seen. Instead the danger of complacency in the stock market and among ordinary people who buy homes and do other activities in the United States and are these Interest Rates going to stay low and clearly, with the levels of Government Spending and the rising debt that we are seeing, there is an Inflation Danger and with that Inflation Danger comes the very real possibility of quite a quick rise in Interest Rates. Of quite a quick rise in Interest Rates. The question is, the possibility Interest Rates. The question is, the possibility of Interest Rates. The question| is, the possibility of Interest Rates will normalise more with or without the high spending. They are at record lows, these things do not tend to last forever, i do not think this time its different anything Interest Rates will rise. If they rise slowly, it is going to be painful, markets will go down in Housing Prices will soften or even go down, but it will not necessarily be anything catastrophic. Certainly if some shock hit which made Interest Rates go way up which is not easy to say that there would be bite, it has happened on occasion over the last couple of years, that would be very problematic. But certainly asset prices, whether youre looking a bit coin, game stop, the stock market, Housing Prices are dizzyingly high and much higher than i think anyone predicted a year ago, much less ten years ago. Predicted a year ago, much less ten years age predicted a year ago, much less ten years ago. You have advised several different several different administrations and youve also, as ive said, worked very seniorjob. I wonder how you responded to another very senior economist or economic thinker in the United States saying this that the more he looked atjoe biden� s approach to prime the economy and this massive, almost unprecedented spending that he has embarked upon, some are saying that it was the least responsible Fiscal Policy he had seen in a0 years and he warned that the us was facing a pretty dramatic fiscal and monetary collision. Did you agree with that . flit did you agree with that . Of this may did you agree with that . Ii this may surprise you did you agree with that . Iii this may surprise you but i have been disagreeing with it in the first of all, it really depends on whether you think theyre going to be doing this forever. We are in a situation wartime mode and indeed, if that some progressive economists wants that, that the discipline to print and not raise taxes to pay for it, youre going to have a problem. I see would joe biden is doing its tactically smart. He says he is a very thin majority and he is a very thin majority and he has a Honeymoon Period and he has a Honeymoon Period and he is just taking what he can get while he gets it. Frankly, at least the first package that he proposed, i do not really know that people with the hundred a0,000 needed to get a check from the government, but it made it easier to get through, but there are many things in the package and in the second package, he is doing a lot of things that need to be done but really trying to reengineer the economy same time, i do not know if he expects it to get it all through her if it is a matter of tactics, but we would like to see more Infrastructure Spending more genuine and productive spending. That is something with low Interest Rates that we should be doing, whether it is broadband or improving distance, education, building roads. This is what we should be doing and its cheap and i think hes really overstating his case to push the administration that way and when a government proposes policies in this way, i dont think they expect everything like this to happen. You said that this will like this to happen. You said that this will be like this to happen. You said that this will be should like this to happen. You said that this will be should be i that this will be should be doing in terms of massive Infrastructure Spending to kick start Economic Growth to rebuild america better. Is it so incontrovertibly true, i am mindful of what Ronald Reagan said more than a0 years ago in my the most dangerous sentences in the english language is, i am from the government and i am here to help. His whole economic point is that the government is not the best of the right agency to be doing this stuff. It the right agency to be doing this stuff this stuff. It is a question of how to pay this stuff. It is a question of how to pay for this stuff. It is a question of how to pay for the this stuff. It is a question of how to pay for the interest | how to pay for the interest structure. The governance of the infrastructure in many countries Around The World have the private sector pay for part of it and they have fees later to pay back the private sector. Different structures, but do we need infrastructure . Absolutely. Their basic things like the bridges and roads and another thing like broadband to be used to not consider an infrastructure but everyone does not. Infrastructure in the advanced economies has been on advanced economies has been on a Straight Line down for the last 50 years, really. And even though i think all economists and i read a piece in 2008 in the Financial Times arguing for more Infrastructure Spending, even though all economists have agreed on this, and curiously, it is a difficult to do political. Itjust doesnt happen quick enough and i commend joe biden for putting this front and centre. Donald trump talked about it, but he never did anything. Lets trump talked about it, but he never did anything. Never did anything. Lets go back to the never did anything. Lets go back to the point never did anything. Lets go back to the point that never did anything. Lets go back to the point that you i never did anything. Lets go back to the point that you made earlier. The danger of growing disparities in the world economy. Growing inequalities between rich and poor but also within countries growing inequality. Do you think the policymakers and the rich world care enough about the dangers of growing Global Inequality . They clearly dont. We have seen some small steps that a lot of this Inequality Debate and the rich countries that has been started over the last ten years ignores everybody else. For example Anti Globalization and the french economist wrote that globalisation, capitalism, it failed and produced inequality. Not if youre a farmer in india or china, the billions of people have been lifted out of poverty. In between the pandemic, this reversal of globalisation in the need for decarbonisation, the need for decarbonisation, the need for vaccines, we are seeing things go to sharp reversal in this barely a whisper about it in the debate in washington. They are handing out trillions of dollars when is spent on helping india days out its coal plants or 25 billion on helping poor countries get vaccines which will bring massive global benefits. I am very concerned that this narrow focus on me, us, has really not sustainable any more than inequality within countries as it is going to come back to bite us if we ignore the rest of the world the way we seem to be doing. It is a me first thing that some may pin the play my donald trump. He goes far past them, his motto was America First by joe biden isnt really moving very far away the concept of America First and one could say the same about european Nation States as well. There is a concern to look after their own people and a sense that the protectionism is still Alive And Kicking as a economic formula for the future. Absolutely, the vaccines have brought out the worst in all of this and youre seeing some funding going out into the world is very minimal. The trade wars and everything. Donald trump captured this but frankly, bernie sanders, the Democratic Progressive candidate is still very president ial candidate, still very influential. He and donald trump are not very far apart on these globalisation issues. Donald trump tapped into the Democratic Base and he was campaigning against this. Normally, the president is someone who says 0k, we need to be responsible and look at the whole world. Joe biden, i think at his heart, understands these issues and is responding to the political moment. I am optimistic that we will see better over time, optimistic that we will see better overtime, but optimistic that we will see better over time, but near term absolutely, it has been America First still. �. , first still. Are there two forces and first still. Are there two forces and trends first still. Are there two forces and trends that l first still. Are there two i forces and trends that are working together . The follow up from the pandemic where the governments Around The World are looking at the Supply Chains and theyre looking at the uncertainty and vulnerability that comes with that form of globalisation they think, maybe we should back off from their and do more at home and then, theres the whole question of china relationship. Us china relationships, the rich world has become too dependent on chinese products, chinese economy and it wished to back away from that. Those two trends are seeing governments in the rich world talk more and more about changing their economic model interests certainly takes them very forward from globalisation. I very forward from globalisation. Very forward from tlobalisation. ,. ,. , globalisation. I do not have easy answers globalisation. I do not have easy answers for globalisation. I do not have easy answers for this globalisation. I do not have i easy answers for this because the us china tension, the Us China Relationship is the most profound thing of the next four years, we are looking at a situation with this pandemic which may have come out of china which is probably advanced chinas economic progress by a few years. And many other parts look to china and feel like it works and the advance Economy System has not worked as well for them and so, we are in a very troubling moment and the us needs to look very hard how to deal with china and. Very hard how to deal with china and. Very hard how to deal with china and. When joe biden sa s, china and. When joe biden says. Im china and. When joe biden says. Im not china and. When joe biden says, im not going china and. When joe biden says, im not going to china and. When joe biden says, im not going to let. Says, im not going to let china eat our lunch and the implication of that is that the us is going to disengage from china and compete very aggressively against china in different parts of the road economy, do you think he may be making a mistake, a self harming mistake . Making a mistake, a self harming mistake . Making a mistake, a self harmin mistake . , harming mistake . The problem is that china is harming mistake . The problem is that china is also harming mistake . The problem is that china is also is harming mistake . The problem is that china is also is making that china is also is making her lunch and they make a lot of what we consume and the intermediate products, we are where we are and its not an easy situation to get out of and i think obviously will be desirable to find a more cooperative equilibrium. But i do not know what you want call this renewed cold war that is brewing between the us and china could breed problems and you do what you have to do. I hope they find a way forward out of this and they really dont have anything more than bland hope in that dimension. I think theyre very tough questions and frankly, as awful a person is donald trump was, deeply flawed. We could go on and on, he probably did move the conversation in a direction that it needed to go. The people they tell me Hillary Clinton was planning to do this on day one anyway. I do not know. But it is a change in tone the probably needed to be explored and we are doing it. On that same thought, in this debate in america, i am very aware that the french government have been talking about the long term impacts of changing the relationship with china and also learning from what the covid 19 pandemic has told us about the vulnerabilities of the world economy. The Finance Minister said this recently. Saying that there will definitely be a before and after the coronavirus in terms of Global Economics and economic thinking. Isnt that big of a deal . It thinking. Isnt that big of a deal . ,. ,. , deal . It is very hard to say what is going deal . It is very hard to say what is going to deal . It is very hard to say what is going to be deal . It is very hard to say what is going to be at deal . It is very hard to say what is going to be at the l what is going to be at the other end of this and i think its going to change the way we work, its going to change the way relationships in the Global Economy it is very hard to know where that is going and a lot of people say when i expressed the view that we are going to see some d globalisation. They say no, it is never going to happen. Im not so sure. Again, i dont know what to say but where were going. If we did break off from china, it would lead to a sharp fall in the standard of living. If youre playing the long game and trying to make a0 years ahead do you have not figured out how to coexist with them economically, then something has to be done. I think at the end of the day, chinas part of the world. If we do not solve their pollution problems, if we dont deal with them in a way thatis dont deal with them in a way that is mutually satisfactory, geopolitics, its not going to work. So, we have to work with china. We do not want to have the kind of relationship with china the rear with russia. China the rear with russia. China is a much more formidable foe. ,. , china is a much more formidable foe. ,. , foe. Government is good rather than bad foe. Government is good rather than had in foe. Government is good rather than bad in terms foe. Government is good rather than bad in terms of foe. Government is good rather than bad in terms of being foe. Government is good rather than bad in terms of being the l than bad in terms of being the key driver of the economy. Is that now where america is . Well, we are in a catastrophe like the war. So you dont really think of the private sector dealing with that. Lets not forget that these vaccines which have gotten us out of the pandemic, they were not even big pharma, these were small entrepreneurial forms that had these ideas that we have been waiting years longer if we didnt have them and so, it in terms of basic research, the government to contribute. We are in a pandemic and i think of you keep pretending that the government can do everything, will be in trouble. But i think we need to deal with inequality and that we need to raise taxes, we need to spread the wealth around in a way that globalisation has fallen short. We have to end there, ken rogoff. Thank you forjoining me on hardtalk. Rogoff. Thank you for Oining Me On Hardtalkh it has certainly been called, particularly with snow across parts of the uk, but if you do not like the cold, it is going to feel a lot better on wednesday and we will have a cold northerly wind and the arctic air has spread across the continent and parts of the mediterranean and widespread outbreak of cold arctic air. Through the early hours you can see clear skies across much of the country with a few Winter Showers they are across parts of scotland. But later wins, clear skies, frost as well, temperatures in some cities down to around 2 with three degrees early on wednesday morning. Wednesday is looking Something Like this. Lots of bread sparkling sunshine first thing in the morning but the cloud will build to the morning and into the afternoon. The second half of the day is looking a little overcast for some of us and in the northwest of the country, later in the afternoon, towards the evening, the clouds with the can further and we are expecting some outbreaks of rain in places like belfast, glasgow and much of the western aisles this because weatherford is approaching. The wind is changing direction and milder air is reaching us and very later on thursday morning, you can see across the country, it is frost free. That changes by in air of low pressure to the north of the uk will see that slightly milder air brought in by the South Westerly Winds and so, i think on thursday, temperatures for a while will recover to double figures, only just. Perhaps 11 or 12 and parts of england and wales. But that also comes with the front and a brakes of rain for parts of the northwest of the uk. I think the weather will be further south and southeast. As we had to thursday night and friday, that Weather Front will move across and it is a core front and behind it, once again, we open up the gates to again, we open up the gates to a cold air stream from the arctic which could bring Winter Showers to Northern Areas of the uk. Yes, temporarily it is going to turn a little bit milder through thursday, friday and saturday, but the second half of the weekend, it is turning colder again. A very warm welcome to bbc news. My name is mike embley with the latest headlines for viewers in the uk and Around The World. Delicate diplomacy in vienna the United States says the first day of talks on reviving the Iran Nuclear Deal were constructive. Brazil registers more than a,000 coronavirus deaths in 2a hours a new record for the country. At the trial of Derek Chauvin a Police Trainer tells the court the force used by the ex officer on george floyd was excessive. 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