Affordability Crisis, Data Center Divide, Debt Hits Households, Capitalism on the Ballot

Steven Ratner · Willett Advisors

The One Big Beautiful Bill was regressive, favouring companies and the wealthy over average Americans.

Ratner argues the bill gave substantial benefits to companies and wealthy individuals, which he considers unneeded, while giving the average American very little. He says this regressive design could be undone, with a more progressive tax system as an alternative.

“the one big beautiful bill, was a very regressive bill. It gave a lot of benefits, unneeded benefits in my opinion, to companies and to wealthy individuals and gave the average American, you know, very little.”at 8:18

Paul Ryan · Fox Corporation (board)

Reforming the tax system could raise more revenue than the current code does.

Ryan says the earlier tax reform led to growth and that revenues are on a trajectory to improve. He argues that reforming the tax system could yield more revenue than today's code, though he gives no figures.

“I think you could probably get more revenues from the current tax code if you reform the tax system than we have today.”at 38:07

Paul Ryan · Fox Corporation (board)

Tax reform could lift revenue to about 20% of GDP without hurting growth; cash-flow tax is pro-growth

Ryan notes the tax code currently yields a little over 17% of GDP, versus a historical level near 18%. He argues that good tax reform could raise revenue to about 20% of GDP without sacrificing economic growth, but that going beyond that would damage the economy. He is a big fan of a cash-flow tax, which he calls smarter, more pro-growth and very pro-labor, with probably better revenue.

“you could probably get the revenue system up to about 20% of GDP without sacrificing economic growth.”at 38:26

Natasha Sarin · Yale Law School / The Budget Lab at Yale

Raising the corporate rate and curbing profit shifting could raise over $1 trillion

Sarin, citing a paper co-written with Kim Clausing for the Aspen Economic Strategy Group, proposes raising the rate on the 2% most profitable companies, often multinationals, to 28% or maybe 30%. He pairs this with a Biden-era-style effort to stop profit shifting, since companies have a large incentive to book profits where tax rates are low. He says those two measures alone would raise over a trillion dollars. He adds that IRS enforcement has been weakened, with about 40% of the workforce depleted by DOGE and its aftermath, leaving roughly 3% of GDP (about $800 billion a year) owed but uncollected. Better tax administration could yield substantial revenue even at current rates.

“For the 2% of the most profitable companies, often multinationals that operate across jurisdictions, you raise the rate somewhat to 28% or maybe 30%. ... Just those two things alone are gonna raise you over a trillion dollars.”at 39:23

Kevin Brady · Texas Republican; former U.S. Representative

USMCA review should yield Canada and Mexico deals this year, though uncertainty is hurting.

Brady calls the USMCA a North American juggernaut. Canada and Mexico are now America's largest customers, largest investors and most important suppliers. The review is in its first year, and the US trade representative is optimistic about country-by-country deals by year-end, with trilateral talks in 2027. Brady says he is hopeful that timetable holds because uncertainty around such a crucial agreement is costly.

“is optimistic that he'll reach an agreement country to country with Canada and Mexico by the end of this year, and that then the three country talks will occur in 2027.”at 11:10

Kevin Brady · Texas Republican; former U.S. Representative

Tariffs are a real affordability problem because their costs land in consumer and business prices.

Brady argues tariffs are not a branding problem. Roughly $200 to $300 billion of tariffs flow into prices for families and Main Street businesses, and the costs ultimately fall on consumers. He notes that tariffs were once hidden, but voters now see their effects because the president embraced them aggressively.

“It's a real problem. You can't drive 200 to 300 billion dollars of tariffs that don't land in the prices, not just for families, but for Main Street businesses.”at 12:10

Paul Ryan · Fox Corporation (board)

Across-the-board tariffs and trade wars are bad for prices

Ryan says he does not believe trade wars are good and does not think across-the-board tariff increases on all allies and everyone in between help prices. He lists tariff wars among the strong exogenous shocks that have pushed prices up, alongside COVID, the COVID response, government overspending and oil prices.

“I don't think trade wars are good. I don't think tariff increases across the board and all of your allies, anybody in between is good for prices.”at 51:14

Paul Ryan · Fox Corporation (board)

Hyperscalers badly sold data centers to the public and entered communities the wrong way.

Ryan argues that much of the current backlash comes from how hyperscalers pitched AI. They told the public AI would either take everyone's job or kill everybody, while asking for more data centers. He says they were horrible at presenting themselves and wrong in how they entered communities, which is why local opposition has grown.

“they basically go out there and say, this is gonna either take everyone's job or kill everybody, but please, we need more data centers to do this... So I think they were really horrible at presenting themselves.”at 19:42

Kevin Brady · Texas Republican; former U.S. Representative

State standards and federal safeguards can resolve data center opposition, letting states compete.

Brady says local resistance has two sources: nearby electric rates and water capacity, and fear that the data centers feed an AI that threatens local livelihoods. He argues states and localities can set standards that address the physical footprint, with Congress setting consumer and safety protections. He expects some states to ban data centers outright and others to compete for them under strict standards. Texas has about 230 applications, now moving from suburbs to rural areas.

“this is a state federal partnership. States create the standards for the data centers. And the feds, congress, designate the safeguards for consumer protections, for safety.”at 21:33

Paul Ryan · Fox Corporation (board)

Data centers will be built regardless because losing the tech race to China is unaffordable.

Ryan argues data centers will go ahead because they have to. The US cannot afford to lose the race on technology to authoritarian China. The live question is how to build them so the surrounding community benefits, not whether to build them.

“Data centers are gonna be built because they have to be built. We cannot afford to lose this race on technology to tyrannies like China.”at 27:04

Jason Furman · Harvard University

The federal deficit is the main secular driver of today's high real interest rates.

Furman argues that the main reason real interest rates are so high is secular, and that the cause is the deficit. Higher government borrowing costs then pass through to mortgages and car loans. He gives no quantified evidence for the link.

“The main reason that real interest rates are so high is secular in nature, and it is the deficit.”at 30:45

Paul Ryan · Fox Corporation (board)

A credible entitlement plan showing debt reduction could avert a debt crisis; the US is heading toward one.

Ryan argues wiggle room is shrinking after more than $40 trillion in debt, and it is now a question for bond markets. If Congress passed a plan that solves the entitlement problem of massive unfunded liabilities and shows debt reduction over time, he believes bond markets would give credit for it. Without that, he says the country is probably headed for a debt crisis.

“If we could pass a plan that solves the entitlement problem, which is all these massive unfunded liabilities... I would like to argue that the bond markets will give us credit for that.”at 35:39

Paul Ryan · Fox Corporation (board)

Spending at 24% of GDP and rising can't be closed by raising revenue alone

Ryan says the core fiscal problem is spending, which is about 24% of GDP and still climbing, while the tax code brings in a little over 17% of GDP (historically closer to 18%). Because spending is outrunning revenue, he argues the gap cannot be closed by chasing spending with higher revenue. He adds that tax reform could lift revenue somewhat, but not without limit.

“And the problem is our spending is at 24% of GDP and going higher. So you really can't chase your spending line with a revenue line, although you could probably get more revenue with a better tax system.”at 38:38

Jason Furman · Harvard University

Tariffs and the Iran conflict pushed US inflation back above the Fed's target.

Inflation had nearly returned to about 2% but then took off again. Furman attributes the rebound mainly to tariffs, which he estimates added half a point to a full point to the inflation rate, and then to the Iran conflict, which raised fuel and fertilizer prices.

“Why did it take off again? I think in part that was tariffs, which probably have added half a point to a percentage point to the inflation rate, and then subsequently the Iran conflict.”at 3:45

Kevin Brady · Texas Republican; former U.S. Representative

The US economy is resilient and growth is accelerating despite repeated shocks.

Brady argues the economy is not the problem in the sense that growth is accelerating. He cites its resilience through COVID, supply chain disruptions, rate hikes, the war and trade challenges, and points to growth in business investment. The affordability pain comes from everyday prices rather than weak output.

“It really isn't the economy in the sense that growth is accelerating. Our economy's been remarkably resilient”at 5:28

Steven Ratner · Willett Advisors

Real wages are flat over Trump's term and recently falling, squeezing average Americans.

Ratner contrasts stock market gains, which have been strong for several years, with the average American's wages. Since the start of Trump's term, wages adjusted for inflation are essentially flat, and in recent months they have fallen. That explains why people do not feel able to afford things.

“But for the average American, wages really have not gone up... Wages essentially, after you adjust for inflation, are flat. In the last several months, they're actually down,”at 7:23

Blair Effron · Centerview Partners

AI has cut 350,000 information-services jobs, but most firms are not laying off workers over AI.

Efron says information services has been hit hardest, with about 350,000 jobs lost since ChatGPT arrived. Most companies have not laid people off because of AI, but they are hiring less. Unemployment is still about 4.2%. He argues the outcome depends on the sector and that no one yet knows whether job loss will be steep, gradual or absent.

“Information services is the one that really has been impacted the most. 350,000 jobs have been lost since the advent of ChatGPT. That said, for most companies, they have not been laying off people because of AI.”at 23:39

Blair Effron · Centerview Partners

CEOs want fair, global AI rules, and the US-China summit produced nothing on AI.

Efron argues that most CEOs he knows want rules that let them operate fairly within bounds, and a global regulatory regime, since the US cannot act alone without China and Europe. He notes that the recent summit with China produced nothing on AI, and he hopes AI becomes a top topic at the next two summits this year.

“most CEOs I know want a set of rules, want regulation that lets us operate fairly but within bounds, and also a regulatory regime that is global.”at 25:51

Blair Effron · Centerview Partners

CEOs are spending heavily on security, making cyber infrastructure one of the biggest investment areas.

Efron says CEOs see security risk from AI and are spending a lot more on it. He calls the security infrastructure companies for cyber one of the biggest areas of investment right now.

“They're spending a lot more in security, and these security infrastructure companies for cyber are one of the biggest areas of investment right now.”at 25:51

Natasha Sarin · Yale Law School / The Budget Lab at Yale

Rising yields can only be addressed by fiscal reform; yen intervention and bond buybacks are too small

Sarin argues that recent interventions, the Japanese yen intervention and Treasury buybacks of some long-dated bonds, are not meaningful relative to the scale of the fiscal problem. Yields are rising, and the only real remedy is serious action on fiscal problems. He hopes the economic conditions now emerging will force debates that a low-rate environment let people avoid.

“they're not, like, that meaningful on some level to the scale of the problem. Ultimately, the only thing you can do about the fact that yields are rising, rising, rising is think seriously about our fiscal problems.”at 40:58

Paul Ryan · Fox Corporation (board)

Iran war and Strait of Hormuz disruption push up oil prices and broader prices

Ryan notes the US is in a war with Iran and that constricting the Strait of Hormuz raises oil prices, which then feeds into the price level. He lists this among the exogenous shocks that have raised prices, and argues good policy responses are needed to bring them down.

“We are in a war with Iran. ... having this [Strait of Hormuz] constricted raises oil prices that affects prices.”at 51:25