Live from Music Row, Friday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – host Leahy welcomed Fox News contributor and financial guru Liz Peek to the newsmaker line to give her outlook for Wall Street and the economy for 2023.
Leahy: On the newsmaker line, our very good friend, Fox News contributor, and Wall Street expert Liz Peek. Good morning, Liz.
Peek: Good morning. Thank you for having me.
Leahy: It’s always a delight to have you on here. I was telling Braden how interesting a guest you are and how you’re so able to give us a good concise, clear understanding of what’s going on on Wall Street and in the economy. I have to tell you, Liz, I am not optimistic about 2023. What are your thoughts on it?
Peek: I think you share the majority view, which is that we are heading into a recession. I must say right now, we’re looking at data showing retail spending is trending downward and manufacturing trending down. Housing is obviously hit a big-time slide both in terms of new construction and also pricing. So the Fed is trying to do this, right?
This is the Fed’s objective is to slow down the economy. And I’d say it’s working. The problem is it’s not good for markets, and it’s not good for optimism. The overarching question right now is what are we going to do about our spending?
And so far, the Democrats have given very little indication that they want to cut back spending. We have this huge debt ceiling brawl about to happen. I welcome that. I think that the GOP needs to show voters that they stand for something. And one of the things historically that Republicans have stood for is fiscal sobriety.
And really in recent years that’s kind of lapsed. We have a really big debt problem right now. And by the way, the most recent numbers on the deficit the first fiscal quarter of 2023 expanded at about 11 or 12 percent and the interest on our debt is up 37 percent.
This is really meaningful because for many, many years now; all this government spending has been sort of costless with roughly zero percent interest rates, it didn’t matter. Now it really matters.
Leahy: It really matters now. You talked about this debt ceiling. This is sort of, I don’t know, it seems sort of like an artificial thing. The reason it’s an artificial thing is that every time we approach it, Congress convenes and they increase the debt limit. There really isn’t any debt limit. Do you see that playing out differently this time?
Peek: What the Republicans are doing, and this is really the conservative group in the House that made it so difficult for Kevin McCarthy to become speaker, they exacted from him, promises to A have a plan to balance the budget within ten years, which is not a crazy idea, right?
We have done this in the past, and perhaps after Biden has put $5 trillion more debt on the books, it’s time to do it again. And they also want to exact some spending cuts in return for raising the debt ceiling. And so, of course, everyone’s hair is on fire. (Leahy chuckles)
How irresponsible is this we’re going to lead the country into defaulting, et cetera. There are two sides to this equation. Everyone’s ready to blame Republicans, but how about blaming Joe Biden who kept spending even when the recovery was well underway, even when the economy was growing at six percent, as it was when he took office, spent trillions more, and delivered to the American people the 40-year high inflation that is really clobbering everybody.
So he has to step back. He has to take some bruising here, I would say, and he has to negotiate. And so far, the White House has said nope! Clean debt increase or nothing. I think it’s going to be pretty bloody.
Leahy: And President Biden called Republicans, I think is fiscally demented. That’s the uniter.
Peek: Odd choice of words. (Chuckles)Â Â
Leahy: From a guy who is basically demented. (Laughs)
Peek: (Chuckles) Exactly. And he said something insulting to Republicans yesterday, too. He has gotten away with a lot, I would say, in the last two years. And I think no one has really confronted him in a very pointed and particular way.
And after the midterms, he thinks he can do whatever he likes, and I don’t think that’s true. I think Biden is in trouble right now. I’ve said this publicly. I think the confluence of the documents scandal and the fact that you have a GOP House ready and willing and eager to investigate just exactly what his relationship was with Hunter Biden’s business activities.
And the third piece of the puzzle is Elon Musk and Twitter because now you have a major public platform where all this information that the GOP will dig up is going to be public.
And let’s face it, we’ve had this brick wall of information stopping all these revelations about the Biden family. Obviously, the laptop story was suppressed. Other accusations of wrongdoing have been suppressed. Now I think that can’t happen. It’s a very different world for Joe Biden.
Leahy: Liz, you are more polite than I am. You called it the Biden family. I refer to it as the Biden crime family.
Peek: Yes. I think we’re going to find that out. How extraordinary is it that there’s not one young, eager reporter at The Washington Post to The New York Times who didn’t think possibly undermining and digging out the facts about a corrupt president was worth his time? To me, it’s completely mind-boggling. But I think that era is over.
Leahy: Yes, I think you’re right. Can you clear this up for me? If you listen to some conservatives, they say, well, this debt, we don’t hit the debt ceiling limit for a couple of months. But then you hear others who say, well, we’re going to hit it in a couple of days. Can you kind of explain that to us?
Peek: We have, in theory, hit the debt ceiling right now, but what the Treasury Department can do is, Janet Yellen mentioned a week ago she would undertake extraordinary measures, that’s actually a sort of rote phrase which describe all kinds of things the treasury can do to move around pools of money.
It is not extraordinary. It happens almost every time we approach the debt ceiling because almost never is it a smooth glide path. There’s always somebody who doesn’t want to do it. And if you look at where our national debt is now, $31 trillion.
And again, what your listeners should understand is that that’s an abstract number. Who knows whether it should be 31 or six, or 112? We’re now at 100 percent of GDP. That is unusual. It’s unprecedented for the United States. We are putting ourselves in the league of other countries that are really in trouble fiscally.
We have to stop this. And sorry to back up, because interest rates are going up. We’re now talking about $400, $600 soon a trillion dollars of interest payments on this debt. That gets to be bigger than Medicaid.
It begins to approach our defense budget. This is a big issue, and people have to pay attention to it. And if it takes this debt ceiling argument to make that happen, I say go for it because otherwise, this last omnibus bill which just sailed through the Senate and basically the Republicans and the House had no say in it whatsoever, that was an appalling thing to do.
Listen to today’s show highlights, including this interview:
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Tune in weekdays from 5:00 – 8:00 a.m. to The Tennessee Star Report with Michael Patrick Leahy on Talk Radio 98.3 FM WLAC 1510. Listen online at iHeart Radio.
Photo “Liz Peek” by Liz Peek.
