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tv   Washington Journal Karl Smith  CSPAN  July 13, 2020 11:34am-11:39am EDT

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that happens. on theneed to do more liquidity end of the response, because while we can put in a lot of measures to encourage growth, and we have new lockdowns in effect, then it is simply not possible to take -- for businesses to put people back on the payroll. host: we showed viewers the coronaviruse response, the cares act and some of the smaller acts that were passed by congress. it is 2.6 trillion dollars. the entire federal expenditure was $2.6iscal 2006 trillion. when did this level of spending start to catch up with us, especially if we are talking about the potential more liquidity to get us through the here and now. guest: the fortunate thing for us right now is that interest
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rates on government that are very low, and the crisis actually sent them down further. people became injury -- afraid to invest in any risk associated with it, so they put a lot of their money in government bonds. that gives us a year, a couple of years of low-interest rates while the crisis is here. i would probably think that we would see interest rates rising maybe in the next two or three years. at that point it would be important to come across some sort of long-term plan. u.s.debtclock.org, viewers $26.5see, taking in trillion and those numbers continue to arise as they continue to in u.s. debt clock. how do we plan a postcode runner post coronavirus
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recovery? has been onocus restructuring the economy. a lot of things will have to change. number one, unless the complete threat of the virus is gone and we have a series of vaccines, whatever we need, they are probably -- there will probably be new ways of doing business. still more remote business, retail locations will probably be larger. we may have less office space. all that will require new physical investments. we think it is important for congress to look toward what we call cost recovery, which is various methods, our preferred method of making it easier for us to do new physical investments and build new things. they are going to need to build things to make the economy resilient in the post-corona environment. we also expect to happen -- we will see how much it does happen -- there will be a reworking of supply chains around the world.
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we think a lot of companies will take a second look at moving operationsir op back to the united states or north america because the virus has interrupted the flow of trade around the world and made it so that areas that are not under sort of u.s. jurisdiction or u.s. control or even a strong ally, we don't know what the response is going to be, when it is going to happen, if another crisis like this is going to happen. edges that help companies move , allowing back companies to deduct the full cost of their investment up like, a lot of congressmen tax credits, which they can target for very specific behavior. we are less a fan of that. because they tend to reward a closero have relationship with members of congress and they encourage the kind of jockeying for special
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interest waves. they are broad basing it as well. anyone who build something physical in the united states, what we are going to do is instead of have you deduct it over time, we will deduct it immediately from your taxes. reduce the cost of investment and give you additional cash flow. we think that is the most evenhanded way to speed things up. for sort ofplan turning the corner on changing the structure of the economy. it is going to be a lot of difficult thinking. i think when it turns to how we are going to deal with the long budget costs, in general we have advocated to the extent that when you want to look for new revenue sources, that we make them as broad-based as possible. it is possible with very broad-based taxes that tax increases that are relatively minor

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