cover of episode Business Rundown: How Much Power Do Presidents Really Have Over The Economy?

Business Rundown: How Much Power Do Presidents Really Have Over The Economy?

2024/10/28
logo of podcast The Fox News Rundown

The Fox News Rundown

AI Deep Dive AI Chapters Transcript
People
B
Brian Riedl
T
Taylor Riggs
Topics
Taylor Riggs:本期节目探讨美国总统对经济的影响力。尽管国会拥有大部分权力,但总统正通过关税和行政命令行使越来越多的权力。总统候选人在经济形势好转时会宣称功劳,而在经济低迷时则会推卸责任。总统不能单独制定财政政策,国会拥有最终的立法权和拨款权。 Brian Riedl:总统通过行政命令绕过国会,行使越来越多的权力,例如征收关税和增加支出。拜登政府利用行政命令增加了1.2万亿美元的支出,包括学生贷款减免、食品券和医疗保健支出。虽然大部分权力仍然掌握在国会手中,但总统在关税和行政命令方面拥有越来越多的权力。特朗普总统曾提出用关税替代所得税,这在数学上行不通,而且关税最终由美国人民承担。历史上,关税主要被用作针对性的报复措施,而非广泛征收。特朗普的关税政策确实导致某些商品价格上涨,但整体通货膨胀率并未大幅上升,因为关税是针对性的。与针对性关税相比,对所有商品征收关税会导致更高的价格水平和更高的通货膨胀。对所有商品征收广泛的关税,每个家庭的额外支出可能高达6000美元。 过多的政府支出导致通货膨胀,而行政命令绕过国会增加了政府支出。总统利用行政命令绕过国会增加支出,导致联邦预算膨胀。民主党总统利用行政命令增加支出,共和党总统则更多地利用行政命令来实施关税政策。特朗普和哈里斯的政策都会导致巨额赤字,这在财政上是不可持续的。由于债务增加,利息支出急剧增加,这将对美国经济造成严重影响。美国政府债务持续增长,最终可能导致债务危机。持续增长的债务最终将导致债务危机,因为债券市场无法提供足够的资金。根据模型预测,在目前的债务趋势下,美国经济在20年内可能崩溃。

Deep Dive

Chapters
Presidential candidates often take credit for a strong economy and blame external factors when it's weak. While Congress holds most fiscal power, presidents increasingly use tariffs and executive orders to exert influence.
  • Presidents utilize tariffs and executive orders to influence economic policy.
  • Congress retains primary control over fiscal matters like budgets.

Shownotes Transcript

Translations:
中文

Hey folks, I'm John Rich. Just as wokeness and censorship have subverted the music industry, they've also crushed free expression on social media. Censors have suspended social media users, canceled entire news channels, obliterated online discussion platforms, and even banished a sitting American president.

from big tech platforms. Well, I'm here to say there's a place for you. A place where patriots can speak freely without fearing some unknown unseen speech enforcer that wants to shut you down. That place?

It's called True Social, a free speech social media platform that hosts breaking news, TV streaming channels, and powerful commentary on all the issues facing our great nation. Break free of big tech and make your voice heard. Join me on an uncancellable platform where I like to debut my songs and where you can read exclusive commentary from our 45th president, Donald J. Trump.

I'll see you on Truth Social, where freedom lives. Download the Truth Social app or visit truthsocial.com. Now, two pigeons bemoaning the fact you can stream DirecTV satellite-free. These humans can stream all the top-rated national news channels on DirecTV and now with no satellite dish. It's just in. Weather, sports, election coverage.

I'm Taylor Riggs, and this is the Fox Business Rundown. ♪

Monday, October 28th, 2024. As former President Trump and Vice President Harris campaign on the economic issues, we're looking at just how much power and autonomy a U.S. president has over our economy. Ultimately, most of the power still resides with Congress, but presidents are carving out more and more authority through tariffs and

and executive orders on spending and taxes. When the economy is doing well around an election, presidential candidates are rushing to take credit. But when the economic picture looks a bit muddier, we hear other things are to blame. The regular boom and bust of industry or market factors outside of executive control. Yet even though we have an economy that embraces the free market, the government does have some influence.

Both former President Trump and Vice President Harris have been campaigning hard on the issue of the economy, each offering their own vision for tackling inflation, taxes and housing affordability. As voters are heading to the polls right now all the way up until Election Day, they may be choosing their candidates heavily based on these plans.

These candidates may have countless plans, but the president can't set fiscal policy alone. Like when it comes to our budgets, for example. The president introduces a budget proposal, basically setting up what the administration's spending and taxes will look like. But then Congress gets to pass laws and appropriate the money spent on fiscal policies. On the campaign trail, both candidates have told supporters that they have plans and workarounds for getting things done without needing the approval of Congress.

And the candidates must balance pushing their growth-focused policies while showing they will keep up the fight against inflation. All right, the million-dollar question. How much power do presidents really have? We hear on this campaign trail promises and promises and promises. Do they take more credit than they should?

Yes. I mean, historically, when we're looking at economic policy and in particular taxes and spending, the power of the purse has always been with Congress. Presidents can really only sign or veto what Congress sends them. Brian Riedel is a senior fellow at the Manhattan Institute, formerly chief economist to Senator Rob Portman and staff director on the Senate Finance Committee. And I'm pleased to say he joins me now.

Although there is increasing power of presidents using executive orders, which go around Congress. Tariffs, for instance, have been done primarily through executive orders over the past several decades. And additionally,

We've seen with the Biden administration, the use of executive orders to increase spending. We saw this with $1.2 trillion worth of student loan bailouts, SNAP expansions and health care expansions that never went through Congress, that were done by President Biden through executive orders. So ultimately,

Most of the power still resides with Congress, but presidents are carving out more and more authority through tariffs and executive orders on spending and taxes. So let's tackle both of those. Over the weekend, we heard from former President Donald Trump. And, you know, your history as an economist is why I'm so desperate to get your take on this. So on Joe Rogan, he was talking about potentially maybe floating out the idea of replacing tariffs.

instead of income taxes. Now, every sort of traditional economist that I speak to probably thinks that that is not a good idea. But underneath the surface, what do you think the former president is getting at when he floats ideas around like that? Tariffs and no income tax. When Americans hear that, they hear a free lunch. They hear, well,

Tariffs are something that China is going to pay. The American people don't pay tariffs, which is in fact wrong. But I won't pay income taxes anymore. So I think the appeal of that is the idea of replacing $2.4 trillion in income taxes with a tax that China would pay. The reality, of course, is very different. China does not pay tariffs. Tariffs are taxes on ourselves.

Additionally, it is mathematically impossible to replace the income tax with tariffs. It can't work. But it does have a certain free lunch, stick it to China while cutting my taxes appeal that, of course, is popular. The reality of the policy may be different.

Going away from sort of that specific policy proposal, in general, there's been a lot of conversations about tariffs being the ultimate eye for an eye, right? If China wants to put tariff on my product or undercut wages so that they can export more goods...

We want to do retaliatory, very targeted tariffs so that it's I-4-9, not these broad-based tariffs, which I know a lot of economists are not for because in theory, like you said, they don't work. But what do you make of the more targeted measures, the I-4-9, a tit-for-tat, a negotiating tool? Does that make tariffs a little bit more palpable?

Historically, that is how tariffs have primarily been used, at least since the end of World War II. We have tried to work towards free trade with other countries, but there have been times where the United States would use tariffs on a case-by-case basis. If, say, China is using unfair trade practices on a certain item, we might put a tariff on that item temporarily in order to persuade China to move off of their tariff.

Now, you're still raising taxes on Americans when you do that. And so I think that there is still a cost to Americans for those sorts of tariffs. But those have been somewhat bipartisan. Even Reagan would do those kinds of tariffs. And frankly, that's the kind of tariffs we saw during Trump's first term, tariffs on washing machines and very specific items like that. What's unique is the idea of saying we're going to put a 20 percent tariff on

on every item from every country, even countries we have free trade with right now, that's something that scares economists a lot because they see it as very damaging.

Trump was able, though, to do that with very little inflation. And I think a lot of Americans in the last four years feel like the price of my goods are up on average about 20 percent. So would we rather have some targeted tariffs like Trump did? But at least I didn't feel the effects of that as much in terms of overall inflation. And we can sort of promote growth in other areas to help my pocketbook.

Yeah, I think the Trump tariffs did raise prices. It's undeniable. For instance, when he put tariffs on washing machines, the price of washing machines immediately jumped by 9% until those tariffs were later removed and the price went back down. But the overall inflation rate in the economy didn't rise very much.

because there were only targeted tariffs on a few items. It wasn't enough to raise the overall price level. And the difference now is he would be putting tariffs

not on one or $200 billion worth of small imports, but on $3.2 trillion of imports on everything, food, gas, cars, everything would have tariffs. So you're going to see so much more of a higher price level. The estimates range from different think tanks.

of anywhere from $1,350 in higher costs per family, all the way up to $6,000 in higher costs per family. If you do the broader tariffs on everything rather than the targeted tariffs on a few items.

Hey folks, I'm John Rich. Just as wokeness and censorship have subverted the music industry, they've also crushed free expression on social media. Censors have suspended social media users, canceled entire news channels, obliterated online discussion platforms, and even banished a sitting American president.

from big tech platforms. Well, I'm here to say there's a place for you, a place where patriots can speak freely without fearing some unknown unseen speech enforcer that wants to shut you down. That place?

It's called True Social, a free speech social media platform that hosts breaking news, TV streaming channels and powerful commentary on all the issues facing our great nation. Break free of big tech and make your voice heard. Join me on an uncancellable platform where I like to debut my songs and where you can read exclusive commentary from our 45th president, Donald J. Trump.

I'll see you on Truth Social, where freedom lives. Download the Truth Social app or visit truthsocial.com. That makes sense. And it's nice to know that we can get some more policy, at least in the next eight days, to really determine what sort of a campaign talking point and what's a real policy that a lot of cabinet members could maybe get on board with. So obviously, we'll certainly be watching that. You mentioned sort of the overall big inflation. And I think a

A lot of our viewers at home feel like, well, yeah, when you talk about executive orders and massive spending and trillions and trillions and trillions of free money without proposals from Congress, without approval from Congress, then yes, more government spending leads to inflation. And people at home feel angry.

And they want people like Elon Musk, who over the weekend comes out and says, I will do government efficiency. We have a bloated six and a half trillion dollar government. I'm going to cut two trillion out of that. Talk to us on that second point about, you know, what you said about executives using more of their authority and executive orders when it comes to spending and the impact that that has had on the American people.

I mean, the federal budget is huge. It's bloated. It's about six and a half trillion dollars. It's continued to rise. And even when we get gridlock, often people have said historically, if you have one party control Congress, another party control the presidency, you'll get gridlock and they won't be able to increase spending as much. Except presidents are getting around gridlock with executive orders. You know, again, President Biden is

did $1.2 trillion over 10 years in new spending from executive orders on student loans, SNAP, and healthcare. And it would have been even more had the Supreme Court not shot down the bigger student loan bailout. So even if you have gridlock, Democratic presidents have been particularly aggressive on using executive orders

to increase spending. And there's no reason to suggest that'll stop with the Harris presidency, frankly, until the Supreme Court stops them. Republicans have been using executive orders more for things like tariffs. Trump has talked about using executive orders for impoundment, which is basically a way to refuse to spend money that's already been appropriated.

Although it's expected that the Supreme Court would very quickly shoot down impoundment because it is considered blatantly unconstitutional. But this is where the edges of the debate are on how to get around Congress on fiscal issues. Your expertise is, you know, fiscal issues, it's deficit, it's debt, it's looking at, you

you know, debt to GDP, these massive, you know, trillion dollar deficits that were running. I'm curious if you have a thought, you know, I've been following the bond market and when the Federal Reserve cut interest rates, we all thought rates would fall. Rates are rising. Yields are rising. I think because there is this narrative that no matter who wins, we're going to be facing a

potentially maybe higher growth if it is Trump, but also maybe higher deficits and a little bit of higher inflation on the horizons. You have those long-term bond yields tracking that trajectory. How are you thinking about both candidates and how seriously they will or will not be taking the deficit and how much it's costing us to fund our debt with our interest payments as those borrowing costs keep rising?

Neither Trump nor Harris is remotely serious about budget deficits. According to the Committee for a Responsible Federal Budget this morning, Trump's policies will add $7.8 trillion in deficits over the decade. Harris will add $4 trillion. And that's on top of a baseline deficit of $22 trillion. So we're really looking at about $30 trillion in new deficits over the decade under Trump and about $26 trillion in deficits over the decade for Harris.

This is totally unsustainable. And you mentioned interest costs. Interest costs have tripled already since 2021 from $350 billion to nearly a trillion. We're spending about 18% of all our taxes on interest. And by the end of the decade, we're going to be spending as much as a third of our taxes just on interest on the debt. Oh, my gosh. Make it stop. That means...

You're going to work until May 1st just to pay the interest on the debt. So what makes me mad about this is I'm running a household budget. If I were looking at my credit card bills with my child and my husband, and I would say we have to work through May just to pay interest on our credit card before we can even get to rent and groceries, the average American...

you know, wouldn't be able to live like that. But we have this idea that the federal government can because they'll just print unlimited money. And Republicans have been crying wolf about debt and deficit for 20 years, and it's never blown up in our face. So we're just not going to talk about it anymore. But when does that when does it really come in and smack us in the face? The debt has jumped from 40 percent of the economy in 2008 to 100 percent to date.

It's projected under current policies to go up to about 250 to 300 percent of the economy over the next 30 years. At that point, 80 to 100 percent of your taxes will be paying interest on the debt. That's well over $150 trillion in new borrowing over 30 years.

The bond market cannot lend us $150 to $170 trillion over 30 years. At some point, the bond market is going to tap out, interest rates are going to rise, and we're going to have a bit of a debt crisis on our hands. When that happens is tough to predict. It could be in five years. It could be in 10 years. It could be in 15 years. But it will happen because the bond market can't lend us

all the money we need to borrow. Just to give an example, the economists at the University of Pennsylvania's Wharton School did a simulation about a year ago under current debt trends. They could not even project a functioning economy in 20 years. Their models completely crashed within 20 years just under current debt trends. So we know the crash is coming. We don't know when.

But it's coming.

still alive during that time. Our children and grandchildren are still alive during that time. So you brought it back for us. Our viewers can still get that urgency. Elections are important. Policies are important. And it's not just some futuristic 20 years down the road, but something that we really can start to change now if we start to reduce some of that spending. Brian, I want to thank you so much for your time. We really appreciate it. It's been a pleasure. Thank you.

Hi, everybody. It's Brian Kilmeade. I want you to join me weekdays at 9 a.m. East as we break down the biggest stories of the day with some of the biggest newsmakers and, of course, what you think. Listen live or get the podcast now at BrianKilmeadeShow.com.