Hi. Thank you for joining us. I'm Norbert Michelle, Cato Institute's Center for Monetary and Financial Alternatives.

And I'm joined today with my colleague, Dominic Lett. Dom handles fiscal policy issues and I handle monetary policy issues.

And we're going to talk a little bit today about which area is more hopeless in terms of fixing,

in terms of what are the problems and what are the chances of fixing them.

Some people might view this as a cage match, a battle for which

policy area is worse. It's entirely up to you as a listener to decide if that's how you want to

look at this. But Dom and I are friends, so don't worry, there will be no violence here. Yeah,

no, no, no, no, no, no. So, Don, would you like to just start off with a

little bit of maybe historically why or how, maybe how is better than why, how we got into the

fiscal mess that the United States is currently in, something like that? Absolutely. I think that

the kind of most important historical touchstone here

is probably World War II because there's a lot of different ways you can look at the fiscal problem,

the debt. I think one of the easiest ones to make historical comparisons is debt relative to the

size of the economy. So debt as a share of GDP. And World War II was kind of the high watermark

for the U.S. and we're pretty rapidly approaching that. So we're about at 100% debt to GDP ratio

over the next couple of years at some point, I think 2028, 27 will surpass the World War II high mark

and then debt will kind of continue on an

upward trajectory.

That's really driven by almost entirely by two problems.

So if you look at one measure, it's called the unfunded obligation.

So that's the difference between expected revenues and what the government has promised to

spend.

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