Macro Musings with David Beckworth

Ben Harris, vice president at the Brookings Institution and former Treasury official, dives into the U.S. government's fiscal health. He addresses the rising primary deficit and critiques the Big Beautiful Bill, discussing its implications on the national debt. Ben also explores how stablecoins and AI could offer innovative solutions to economic challenges. He shares insights on the unpredictability of debt dynamics, the significance of the debt ceiling, and the interplay between inflation and government spending, all while reflecting on his love for basketball.

Luis Garicano, a former member of the European Parliament and London School of Economics professor, dives into the future of digital money, discussing his book on the Euro’s evolution. He highlights the risks associated with dollar-denominated stablecoins and critiques Europe's cautious approach to Central Bank Digital Currencies. Garicano also emphasizes the need for significant reforms in Eurozone policies to tackle the complexities of fiscal discipline and ensure economic resilience amidst historical challenges. His insights provide a compelling look at Europe's financial landscape.

Mark Blyth, a Professor of International Economics at Brown University and author of "Inflation: A Guide for Users and Losers," dives into the complexities of inflation and its varied impacts on society. He introduces the concept of angrynomics, discussing how inflation affects different income groups. Blyth critiques traditional monetary theories and explores the dynamics of price controls during the pandemic. He also examines hyperinflation, demographic decline, and the need for adaptable policies in today’s economic landscape.

Sam Schulhofer-Wohl, Senior Vice President at the Federal Reserve Bank of Dallas, shares insights on recent Treasury market reforms and evolving central bank systems. He highlights the resilience of the Treasury market amid disruptions, emphasizing the growing role of nonbank institutions. The discussion also delves into the importance of central clearing for market transparency and stability. Schulhofer-Wohl navigates the complexities of bank capital regulations and concludes with the central banks' pivotal role in monetary policy through reserves and government securities.

Andy Levin, an advisor to global central banks and an economics professor at Dartmouth, returns to discuss the critical need for an independent inspector general at the Federal Reserve. He emphasizes the importance of transparency and accountability to maintain public trust in the Fed's operations. The conversation also touches on the challenges of the Federal Reserve's costly renovations, comparing them to historic landmarks, and highlights the urgent need for oversight in spending. Levin's insights underscore how independent evaluations can strengthen central banking practices.

Matthew Pines, the executive director of the Bitcoin Policy Institute, dives into the exciting intersection of Bitcoin, national security, and global monetary policy. He discusses Bitcoin's transition from an illicit tool to a strategic asset in U.S. policy. The conversation also covers stablecoin regulation amid evolving geopolitics, exploring the dollar's future and the potential of AI in reshaping monetary dynamics. Pines highlights the need for collaboration among democracies to counter geopolitical shifts, emphasizing the transformative power of digital currencies.

Peter Conti-Brown, a historian and legal scholar of the Federal Reserve, and Sean Vanatta, a financial history expert, explore their new book on bank supervision in America. They draw intriguing parallels between powerlifting and economic policy, highlighting concepts like hysteresis. The discussion also delves into the implications of the Supreme Court's Trump v. Wilcox ruling on the Fed's independence. Listeners will discover the evolution of bank regulation and the challenges of oversight in light of recent banking crises.

George Selgin, a senior fellow at the Cato Institute and author of *False Dawn*, delves into the intricate history of the Great Depression and its monetary implications today. He questions common beliefs about the New Deal, revealing its limited effectiveness in economic recovery. Selgin also discusses the gold standard's restrictive role during the Depression and critiques the Reconstruction Finance Corporation and the National Recovery Administration's mixed impact on revitalization. His insights highlight valuable lessons that resonate with current macroeconomic challenges.

Daniel Bunn, President and CEO of the Tax Foundation, dives into pressing fiscal issues facing the U.S. government. He discusses the history and importance of tax models in shaping effective policies. Bunn highlights the economic threats posed by tariffs and critiques current budget reconciliation efforts. If he were president, he outlines radical reforms to the tax code. The conversation also explores the implications of entitlement spending and the urgent need for sustainable fiscal strategies to manage national debt.

Luca Fornaro, a senior researcher at CREI and a professor at UPF and the Barcelona School of Economics, dives into the intricacies of hysteresis and its impact on economic growth. He discusses how downturns can cause long-term damage to productivity, leading to stagnation traps. The conversation also explores the interconnectedness of business cycles and long-term growth, as well as the role of population growth and innovation in driving economic development. Fornaro advocates for smart macroeconomic policies to stimulate recovery and address supply shocks.