There students are graduating without mountains of debt and because they have a larger government that is investing in ways that help all citizens they end up with a substantially more equal society. So if you take a step back you can say about what the book is trying to do is address the question what should fiscal policy, taxing and spending what should our fiscal policy be in an age of inequality . What the book answers is it has to be a larger pace because we are the smallest government of any large economy. It needs to be a larger based more tax. Does not have to be super high rates on the rich. We need to collect more revenue and we need to spend those remedies wisely by investing and ensuring an all caps. So start with the spending, then come spending, then come up with the tax systems. The tax system is not that difficult. I have done this for decades. We can argue like all academics are policy wonks can about this feature that feature but in the end it is just not that difficult. We are such a low tax country relative to others. If you look at all taxes taxes, federal state local, income tax payroll tax bill put them all together. It is not difficult to find ways to raise the revenues. I give specific plan in the book but i dont want to dwell on it too much because it is just too easy. What is hard is convincing people that government in fact can be and is useful. It can be an instrument for making ourselves not just by leveling down but through investment throwing out positive returns and makes us all healthier wealthier, and wiser for generations from now. As you well know the budget process on capitol hill is on automatic pilot the last several sessions. Yes. You know if i were to write a sequel i have decided the book should be called when congress. Congress is the problem. It really is. And we spend so long defecating government we forget that the reason that government does the government does not work is because congress doesnt work. Congress does not fulfill its own mandates that it has given itself on the budget process. They dont revisit important spending programs that are baked into the tax code so that they are invisible to ordinary people. At every turn you see at best a marginally functional s enterprise that is really letting us all down and the down command the solution is for us to elect a better class of legislative. The practical people who want to get things done whether they are conservatives or liberals can find Common Ground and lead us to much more productive economies in which we all participate. But that requires a better class of legislative than we have today. A a balancedbudget important . Not at all. A balanced budget is clearly wrongheaded a wrongheaded and perverse thing. There are a few things you can say about economics with great certainty, but this is one of them. A budget to have a balancedbudget is wrong headed for several reasons. One is that the economy keeps growing. So what we should care about is how much debt we have relative to our income. That is, after all how are private firm would think of things. It is not i have x million in debt. 100 million in debt is that is a great deal for you or me to carry but not a great deal for apple a company that would be our 1st trillion Dollar Corporation in the world. So everything is relative. The right question about National Debt is not how many dollars as it but how it compares to our incomes. In fact because our National Income grows if we have if we want deficits on the order of 2 percent of gdp to hear at a time when our economy grows at 3 percent per year, well it means that we end up with the National Debt of about two thirds or annual income which is perfectly sustainable. A little bit lower. Those numbers by way of example. And the other point, of course is course is that sometimes once in a great while things go horribly wrongs as they did in 2007 to 2009 and the bottom to spas out. At that time government deficit spending leads to better economic outcomes. We can see the difference between the success that the United States is at coming out of the Great Recession compared to europe which tighten its belt out of the misguided idea that deficits were the 1st priority rather than growth. So a. So a balancedbudget wouldve led to a Great Depression. Is just that simple. Spending would have collapsed because revenues collapsed. Revenues collapsed because that is what it means to be in economic freefall. And when revenues are on 7 2 but we were down 14 1 2s. Balancedbudget wouldve meant we halfs. Balancedbudget wouldve meant we were chasing her own tail cutting, cutting, cutting and in doing so reducing incomes and consumption leading the lower tax revenues intern and we chaser tail all the way down to a a Great Depression. And it was secretary paulson at the end of the Bush Administration the knew obama administration, they understood this. They acted appropriately. They recognized that deficit financing is what paul us out would have been a Great Depression in 2,008. Another common refrain in washington is close loopholes. I. Am all in favor of closing loopholes. What does that mean . It means that the tax code is filled that are not germane to collecting tax in a fair and orderly way. This is what is called the technical term tax expenditures for but the idea is these are spending programs of one kind or another that congress has chosen to run through the tax system because then they dont show up as a spending programs. They show up as a reduction in tax revenue. There revenue. There are a handful of just plain hoops. Places where the rule is wrong and should be fixed, and those places are there either out of inertia on the part of congress or because of powerful political interests that block fixing them things that carried interest affluent Fund Managers get tax Capitol Gains rates rather than ordinary income rates on their annual income. It is a nonsensical, but the fact is it is not that large number in the great scheme of things. Its what its what i think of loopholes i think beyond the carried interest all the personal i do my seductions that run a train and a half dollars over five years in reduced revenues in which were not accomplishing the purchases we think we are. It helps affluent uppermiddleclass families by a five bedroom home and set up a four bedroom home command is a strange kind of Government Spending program. So we need to look at the personal i demised adduction and a handful of others. These are not •ellipsis. They are deliberate policies. They just happen to be bad. How much money should the federal government be spending . And my view the government should be spending on the neighborhood of 44 of gdp. It has been spending around 22 . 22 percent. Historically it was lower. One of the reasons spending is going up democrat or republican, nobody can hold back this with a broom. The number of americans over the age of 65 is skyrocketing. And that means that Social Security and medicare are going to take larger and larger charts of our National Income. That is income. That is just the reality. So government just by virtue of that alone the doubling of the number of americans over the age of 65 between now and 2040 the government has to be bigger in terms of his total spending. So we could pretend that we are in 1965 but we are not. We not. We have to deal with the reality of our aging population. So 24 percent of gdp is about the right number. So what the book advocates, you know, is not that we become france overnight. Im not a socialist. Have a socialist. Advocates that we spent about 2 percent of gdp more than we are now. That is a lot of money. 350 billion but it is completely affordable and it buys a lot. It would buy actual investment in infrastructure positive economic returns to just building bridges and roads, economic returns and time saved and it creates great quality jobs. Not everyone in america is going to invent the next great. Some people are not interested. So getting back to america where there are good quality jobs in construction well that is a kind of double pay off s. So we can go from net zero to some significant investment in infrastructure. We can do better 2 percent of gdp is enough to make a meaningful impacts. Then we can decide that is the right number. We dont have to do it in one day. 2 percent of gdp would change our lives for the better. Some would argue our current tax code is harmful the productivity and that if s and that if we want to spend 24 percent of gdp estimate to a flat tax. Well the book considers these issues in detail. It is true that our tax systems for particularly our Corporate Tax system is inefficient. It inefficient. It wastes money. A wonderful metaphor to imagine the tax system is a buckets that carries your dollars from your pocket to the government and government out to other individuals. The government is just us acting together. And the book not all the dollars that you put in reach anybody. There is waste. Just by virtue of how any tax affects your behavior when you are tax your going to say maybe ill do less of that activity. I wont work so hard. All taxes have this effect. And the Corporate Tax in this country is a very inefficient tax, a high rate with local elections. As the worst of both worlds because of all the structural loopholes in it. So yes we can do better, but fundamentally when you look at the actual Academic Studies and you look at the data the tax system is not impeding growth. Underinvestment by the Public Sector in us, we are the largest capitol outfit. We are the drivers of the profitability of this enterprise we call the United States of america. We are systematically under investing in ourselves. And only the government can invest in ourselves. You write the strand of contemporary american political thought that defines itself through its hatred of taxation is narcissistic self pleading wrapped in the flimsy sheet of economic that sounds like something i would write. I confess i wrote that. Pretty strong. It is pretty strong. The world as is it actually operates. You understand it is necessary for me to be rich and you to be poor. There is no alternative. Whats more these individuals, these individuals, i call the market trial. People who think that market outcomes are just because they were the outcomes of our recent in the market and the marketplace works efficientlys. Well whatever outcomes follow from the market must be the right outcomes. And what it mrs. Systematically misses is the idea that luck has an awful lot to do with it. One of the themes of the book is that and this is hard for all of us to accept those of us who work hard she will live it is it is hard to step back and say, i was also lucky. You know i did not choose to be home with a smart and it here i am. I i did not choose the parents i had. There is an awful lot. The teachers who help me. An awful lot that happened in my life over which i had no control that enables me to be successful and to think that market outcomes are the signpost some kind of cosmic grace, some that grace some karma that has been bestowed upon us really is deeply offensive because it underestimates the central importance of luck in the outcomes that we all achieve and the market triumphalist denied the existence of luck and they further conflate the marketplace freedoms with political liberty. They think any constraint on private market means that you have destroyed our Political Liberties. The two are not in fact, joined at joined at the hip. You can see extremes at every end. Nordics have a lot of political freedoms. But they also have a much much higher total tax collection. A much more pervasive state than we do s. At the other end china is an authoritarian state but nonetheless runs within the limits of free market economys. It is not the case that there is a necessary connection between free markets on the one hand and Political Liberties on the other. Free markets other. Free markets are important. Government does not replace market. Government complements market and places the markets reach like investing in ourselves. And the market triumphalist overestimate the completeness of the markets, the perfection of markets. They ignore the role of luck in our lives and they conflate two different themes of marketplace freedoms and Political Liberties as if they were the same thing. We are better than this money and how is history is shaped us. He talked about the book with historian Douglas Brinkley in an event in austin, texas. This is 45 minutes. Applause. Appmack welcome to both people and thank you for coming out this on this beautiful saturday afternoon to celebrate literature with us at your local independent bookstore. It should go without saying, but i will say it anyway only through your participation and we are able to houston. Thank you for perpetuating the cycle of creativity and helping us to bring fascinating and innovative authors like mr. Sehgal to our community. We are thrilled to have him with us this evening and conversation with longtime favorite Douglas Brinkley. Both of these authors have independently revealed astonishing truths about the world we live in so it should be mind blowing the revelatory to have a near together. A very impressive resume having both serve as a speechwriter on a president ial campaign and performed with grammywinning musicians as a jazz bassist, a distinction he presumably shares with no one, though one, though i have done no research. The author of three previous works jazz accuracy, walk in my shoes in the bucket of blessings with his mother, im sorry. Is that even close . All right. He serves as an officer in the us marine reservess. Reserves. Douglas brinkley of course, a professor of history at Rice University cbs news historian and contributing editor. Several of the books have been selected as noble books of the year. Americas knew pass master. Please help me welcome Douglas Brinkley. Hello, ladies and gentlemen. I would like to welcome my dad. I would like everybody to honor him for his new book. [applause] s. Thank you, everybody. We are all friends, and i have been a professor of history for a long time. I have never been more proud of someone i have gotten to know who has worked so incredibly hard in so many different areas not just on wall street in the financial world but as a writer someone who worked with civil rights hero andrew young on a books cover somebody who is put the idea of jazz and the policy together someone who just won a grammy award trying to foster jazz diplomacy with cuba. And for doing that this year won a grammy for latin jazz. He is an amazingly talented guys. Guys. You will hear more from him in different books but tonight i mean he will write a lot more have a feeling, but tonight we will talk about a coin which is becoming a New York Times bestseller. It is just right out of the gate. And it is an unbelievably great read. Read. People have compared it to have the New York Times has compared it. If you like Elizabeth Gilberts eat pray love this is the book for you. I hope he gets the Sales Numbers going. But it was a great writeup he had in the times. The book is really taking all of the country right now. His wonderful now. His wonderful to have you here. I wanted to start by asking you you know, why did you ever decide to work on wall street . First of all grades of the year, great to be at book people. Thank you for being here. I started working on wall street in 2008 just a few months before the credit crisis began. I began. I reluctantly worked at wall street and started working on wall street because i found myself working on the kerry campaign. He lost and i needed the job i took one on wall street. You know, when i arrived it was falling apart. People are losing their houses. The stock market was going down. I focus on emerging market investments. What was happening in america was effecting what was happening in the emerging world. I kept asking this question. What is it about money that makes us act so irrationally, so bizarrely and foolishly to mecca started writing and researching this topic and got into the field of sort of brain science. What is happening in your mind when you think of money. When i mentioned money to you, its increasing. They have done brain scans of people i and cocaine and a compared it to people making money. I money. I find that the brain scans are virtually identical. They had taken brain scans of people looking at pictures of naked women dead bodies come money. What get the most activation in the part of the brain is money. I find this fascinating. I researching and researching. My career on wall street took me around the world to over 25 countries exploring this idea of what is money, how does it have such a powerful influence on allies and it is such a big topic. Were you influenced influenced by any books . What is your early reading you had to do that just got yourself and your. Well, starting with that question why are we so irrationally comes to money, i started with the work of behavioral economists who won the nobel prize in psychology. Hes the guy that sort of comes up with this idea of cognitive. For example, how many of you guys play lottery . My dad plays the lottery every week. Why what are you really . Almost zero chance of winning. Well, i see it on the news. As news. As a personally standing their with a check. Maybe i can when it. One time i won mastery or four numbers. I get 400. But theres a zero chance you can whens. So this is explained by this and rational irrational activity. The more likely you can remember things you start to inflate the probability of it actually happening. So celebrities they have more are slim is more likely to get divorced . You might say yes. Is because we see it more often in the news. We make all these irrational Financial Decisions which began looking at the book thinking fast thinking slope that was happening in the brain. Where did the brai