[Music] [Music] hello I'm Adrien finegan and this is counting the cost on Al jaer your weekly look at the world of business and economics this week US debt continues to grow it's on track to reach more than 50 trillion ion dollar over the next decade should Americans and the rest of the world be worried dubbed Swift nomics Taylor Swift's concerts are said to boost local economies but does the American singer have a big economic influence and while many European nations are exploring a shorter Work Week Greece is introducing longer office hours but will the sixday schedule [Music] work the US is more than $34 trillion in debt that's almost equal to its entire GDP the figure is big bigger than any other nation's debt but does that matter when Washington issues the world's leading Reserve currency a new report by an independent fiscal Watchdog is now sounding the alarm among Financial experts the Congressional budget office says that by 2034 debt is expected to hit 122% of GDP that would be the highest level ever recorded barring changes in tax and spending policies so could the tide of red ink get out of control and the US default on its debt we'll discuss that with our guests shortly but first Alexandre bers reports more than $50 trillion that's how much the US government is on track to owe its creditors by 2034 it's an eye-watering number without precedent it will be larger than the country's entire economy 122% of US GDP higher than at any point in history the US already has the largest debt burden in the world and the government keeps spending more than it's bringing in every year it borrows to cover that Gap the money is going to Social Services like healthare as well as defense but a huge chunk of the budget is just paying interest on what it borrows and thanks to surging inflation and high interest rates that's getting more and more expensive to do critics say it's the very definition of unsustainable a spiraling debt trap as of right now the US spends $2.4 billion a day to pay the interest on its debt more than it spends on the military by 2034 that number will be more than $4.6 billion as much as it will spend on Medicare and that's money that can't be spent spent on the things the country needs roads Bridges healthare and education Republicans and Democrats blame each other and in deep political gridlock during an election year can't push through the solutions they need tax increases and spending cuts Social Security and Medicare is off the off the books now right they're not to be instead they kick the problem a couple years down the road with stop Gap measures that only postpone yet another tax and spending battle you don't have to turn on the news to see how tough things are we're $34 trillion in debt we're having to borrow money just to make our interest payments China owns some of that debt and I would love to tell you that Joe Biden did that to us but I have always spoken in hard truths and I'm going to do that with you today Donald Trump and our Republicans did that to us too the American public is already under strain the cost of owning a home is the highest in 30 years I feel for those people who are struggling and need to get out and get someplace before it's too late before they're out in the streets and many feel less optimistic about the future I think because of how expensive it it is to live now and a lot of people depend on like their financial situation to make them happy um and it's it's a struggle when you don't have the financial stability to like live and the US debt spiral threatens far beyond its own borders in April the international monetary fund warned it poses a significant risk to the global economy it drives up borrowing costs worldwide and fuels inflation leaving billions of people potentially paying the price for American Economic Policy Alexander buers Al jazer for counting the cost let's take a look at just how big the US debt is $34 trillion is around the value of the economies of China Germany Japan India and the UK combined it amounts to $259,000 for each household and $11,000 for each person in the US it would take 22 years toward paying down the debt if each family contributed $1,000 per month the vast majority of US debt is held by the public and foreign creditors through bonds and other borrowing instruments the rest of it is held by government programs such as Social Security and Medicare its debt is held by the public as a share of the economy that worries economists most the debt to GDP ratio measures just how much the US owes versus how much it produces and indicates if it is able to pay back its debt now that ratio is expected to reach 122% of gross domestic product in 2034 dwarfing the nation's fiscal position following the second world war for more on this let's talk to Howard Reed he's the director at lman economics and he joins us now from Colchester in the UK good to have you with us Howard so how alarming is this report then from the Congressional budget office well I would say it's not actually although the The Upfront numbers look quite big it's not actually that alarming because if you look at some other country for example Japan um currently has a debt to GDP ratio of around 250% right so about in terms of a relative to the size of its economy it's got twice as much debt as the US and there isn't really that much concern that Japan's going to default there's a little bit of concern but not much and so I think the US you whilst these numbers are big in the context of debt during you know the 80s and 90s for example there's still a very long way to go and when we talk about debt what what do we mean I mean for you and I if we're in debt it's our it's our credit cards we owe money on or or loans or or a mortgage when a country is in debt what does that mean well it means that they they um they they have various that they they owe money in some some of the debt is owed in the same way to kind of foreign creditors um you know uh either corporate or um pension fund Etc some of the debt is actually owned to other us Institution tions and so that becomes a bit like the left hand o the right hand um and the other thing to the other thing to point out is that the um the US issues its own currency so therefore in theory it can't actually go bankrupt because it could always issue more currency to pay off the debt that's not necessarily a good thing to do because it could increase inflation it could devalue the dollar Etc but um the us or or you know a country that issues its own currency um having a large debt is not the same as a household or a corporation having a large debt there's Cru there's the crucial difference that it can issue its own currency to service the debt so do you mean Howard that that there's no danger that the US could default on its debt I think there's no danger that the US could default unless for some reason it actually wanted to default um which is unlikely sometimes countries have decided in in the past you know particular developing countries that actually be easier to default kind of start aresh than try and service the service the debt but the the US you know technically doesn't have to ever default on its its debt um but it's not there are certain drawbacks to having a very very high debt to GDP ratio it went into several hundreds or even thousands of percent because you know um servicing the debt could create inflation could reduce the value of the currency and so you know could make people worse off in the longer run but that wouldn't be a fault it would be you know other kind of economic problems that would arise from that for us consumers all right so it could make Americans worse off in in the longer run what about the rest of us how are we affected by this well that's a really interesting question I don't know if economists are really that clear on that to be honest I mean we heard in the in the in the video you put up before you you had me on um people were saying that extra us borrowing could could Stoke inflation um but I think that's very much the jury's still out really on whether that's really the the the cause of the recent cost of living crisis and inflation that we've seen because we've seen inflation shooting up in across many industrialized countries the UK the EU um other other countries as well but most of them haven't most of them don't have the same kind of size of debt to GDP Ratio or haven't had the the the the increase in the debt GDP ratio the US had over the last few years it seems more likely that fact related to covid-19 and the recovery from covid-19 particularly things like Supply bottlenecks and prices rising for producers import costs Etc are driving inflation rather than mounting government debt that would be my my position anyway okay so why does debt continue to grow in the US why why does the US continue to borrow Beyond its ability to pay it back and why does nobody in the US seem to want to do anything about it well that that's a very good question there are two things really I mean one is on the on the spending side there are a number of um programs like um Social Security Medicare but also increased military expenditure a huge increase in infrastructure expenditure through the um inflation reduction act that the Biden Administration put through that needed to be done because huge parts of us infrastructure are simply falling to pieces so there was a big case for investing more and also moving towards zero carb and converting the economy to low carbon um so on the spending side there's been there's been extra spending but on the tax side um the Trump Administration into when it passed the tax cuts act in 2017 uh reduced tax take by something like two trillion dollars over 10 years and so um a lot of those benefits went to the most well-off and corporations and so um there's been a huge reduction in the amount of tax that the the US economy is actually getting in now the Biden Administration is planning to let those cuts expire if Biden is reelected in you know in the the coming election and so the uh the American Enterprise Institute has forecast that the the the extra um the extra tax take under the Biden plan would be around four trillion over the decade 2025 to 2035 and that would go some way towards kind of helping plug the plug the hole a bit in terms of um the gap between what the what the US government spends and what it gets in so there's two things going on one is they're spending a lot and the other one is they're not taxing enough they're the two things Howard it's been really good to talk to you on counting the cost many thanks indeed for being with us thanks very much nice to be here thanks she's taken the World by storm American singer songwriter Taylor Swift isn't just a music icon but an economic phenomenon too dubbed by some experts as Swift nomics because when Swift performs in town she rallies hundreds of thousands of fans and the so-called Swift spend a lot of money on tickets and services like restaurants hotels and local attractions driving economic growth but the superstars tour could push prices up and central banks believe it or not are keeping a close eye on how that is going to affect inflation concert goers spend an average of $1,300 each Taylor Swift's eras tour at its Affiliated film is estimated to have injected billions of dollars into the US economy IRAs is the highest grossing Music Tour ever and the first to reach $1 billion in total ticket gross sales globally Swift will perform in 18 European cities in the coming few months and hotel prices across concert cities are expected to increase by 44% on average according to a recent report by Lighthouse well London is hosting more Swift performances than any other city in the world drawing nearly 700,000 people in 3 days a report released last week says the meast star's concerts will boost the city's economy by around $380 million and Barkley's consumer spend research found that Swift's tour is expected to boost the UK economy by $1.26 billion Rory Chalin reports from London it's been called Swift nomics the genuinely economy boosting effects of this gargantuan World Tour $380 million for the London economy according to the London mayor 1.27 billion for the UK economy according to Barkley's bank and each of the fans here you can see streaming towards Wembley Stadium behind me will have spent on average $1,000 each on tickets travel accommodation food outfits After parties Etc you can see the money's rolling in I'm assuming you might have spent maybe a little more sounds about right maybe Pur ticket right per ticket but then you've got accommodation you got he talking about thing can you put a number on it at the moment I can would you no has it been expensive yeah yeah I would say it yeah tickets combination outfits yeah yeah so we paid £95 for a ticket each that's up in the top tier I managed to get pretty much everything off vintage so I would say my outfit is going for about about 40 quid we've done it pretty well on a budget but I am going two more times so I've got to make the money stretch you're not just seeing her once no I'm going I'm going I'm coming twice again to Wembley in August London is one of the richest cities in the world it puts on hundreds of thousands of musical and sporting events every year but the mayor's office knows that this is on a different scale it's got as frothy as any diard Swifty boasting that London is hosting more Taylor Swift concerts than any other city in the world and that 700,000 people at least will have seen her live here not since the Beatles or Elvis Presley Madonna or or Michael Jackson has the like of this been seen and if you're looking at just the cold hard cash not ever Rory Chalin for counting the cost joining us now from Birmingham is Maria silu who is the assistant professor of Economics at the University of Birmingham good to have you with us Maria now as an economist what do you make of Swift nomics is it a real phenomenon or just hype it's Swift onomics is a real phenomenon as we can see Taylor Swift uh is has been very successful business woman and has been made a lot of strategic decisions and when we talk about Swift economics we mean the econom impact that Taylor Swift um has on various sectors which mainly are driven by her tours and conerts and of course we also have the um sales and spending that shim brings through indirect um spending so are Central Bankers right to keep an eye on what's going on here could Taylor Swift actually have an impact upon a country's inflation rate that's a very good question H yes they need to keep an eye because as we said it's a phenomenon and it's something that um we can see that she surpassed the a gross touring and therefore we need to make sure that depending on the economy of course so in smaller economies there is a high uh POS higher possibility that Taylor Swift when she tours there she will bring a much higher impact on the economy and may most likely to uh increase the prices at the longer term than a larger economy so depending on the economy of course but always we need to keep an eye because we saw the large impact she has in general overall globally as we heard in report swifties are spending a lot of money in order to see Taylor perform live surely that just means that they're not spending money elsewhere doesn't it so what I'm expecting as an economist is that there is a reallocation of spending so the funds will save money to spend on tailor concert teas merchandise and so on and they are cutting from somewhere else but I'm expecting that they are cutting from non-necessity goods for example luxury good instead of going to let's say h holidays in Spain because I'm in the UK um they are saving money they come to London for her tour for example so um I'm expecting that the necessary Goods they will there will be a spend on those but then they are saving for a long time just to go to her tours so who actually profits from Taylor Swift I mean obviously she's making a lot of money herself but but who else is making money so as we can see there is a um immediate shortterm impact on the local economy where she does the tour and the concert so the city that she does a tour imediately um has a positive impact because they need more um as people visit and more tourists and we have H more um demand for hotels dining merchandise and so on and therefore there are as we can see higher demand in economies we have higher prices but this doesn't impact the funds H so the more money they are spending the funds in the city then those monies are injected back to the local economy because of their spending and as we can see because she has a global tour and in for example in the UK instance she visited Edinburgh Liverpool car and then London we can see that there is also so the national effect on the economy where we can see that immediately makes those country most cities more attractive to tourists of course we know London is always um always has many tourists but also other cities now they're more popular due to hosting Tailor Swift and finally globally this is something that we need to observe carefully because it's a long-term effect um with more day town the economies and the countries later on Mar thanks indeed that's uh it's great to talk to you I I didn't ask you are are you a Swifty have you have you been to to to see her uh yes a very good question I am S I haven't managed du to work commitments but I will um try and attend great hopefully all right Maria thank you very much indeed good to talk to you on counting the cost thank you so much now cocoa farmers in West Africa are turning to rubber as production costs rise they say that unlike cocoa farming rubber isn't as intense that is less costly industry analysts say that the current drop in output is due in part to the gradual shift by Farmers to the rubber crop I'll just he as Amed adris reports from aquaville in Ivory Coast the Coco industry in West Africa blames this white dripping sap as the biggest threat to its Coco Supply after climate change a growing number of farmers are either diversifying into to Natural rubber or turning their bags on a crop that sustained livelihoods for generations and put Ivory Coast on top of the global list of Coco producers Saad gusa is a president of the local Coco Cooperative in agboville a town north of the business Capital he Farms both crops farming rubber is like being on a salary you harvest it almost every month unlike Coco which is harvested once or at most twice a year it may not fetch as much cocoa but at least you have something to live on every month natural rubber production in Ivory Coast Rose from 170,000 tons just 3 years ago to 1.5 million tons in 2022 propelling the country to the top three producers in the world industry analysts believe it could surpass its current output for the 2023 2024 season climate change and soaring production C are forcing more Farmers to switch to rubber while rubber trees take nearly as long as Coco to produce a first output they require less hard work and unlike coko rubber prizes are stable something many farmacy appreciate for their own Financial stability that's a s of concern for the Coco industry poor harvest means less income for both farmers and produce agents who buy the cocoa beans so some are labeling unfit beans as Fair fair trade certified that way they can charge more for the produce Ivory co coco regulator says 95% of the beans from last season were marked as fair trade certified the previous figure was around 50% it has suspended the certification process to allow for what it calls transparency Coco diversification and sustainability consultant edman Conan says the Coco industry is at a crossroad small scale old F Farmers provide 90% of the world Supply they have two to three hear nobody can control them anytime they can cut down their Coco trees it's not like big farms that can you know be controlled but for the small other Farmers you can't control them he says the Coco industry must come up with an acceptable support system to have farmers who continue to live in poverty while supplying a multi-billion industry if not fewer farmers will cultivate the crop which could mean higher prices for that chocolate bar on Supermarket shelves Now Greek employees work longer hours than any other Workforce in Europe with an average 41 hours per week many of them are now expected to work even longer the government has introduced a new law that enables employers to implement a Six-Day work week starting from July 1st employees could in theory choose if they want to do more office hours to do them those who work more will be paid more the change in labor law is aimed at solving the nation's shortage of skilled workers among other issues well the legislation includes employees in some industrial and Manufacturing facilities along with businesses that provide 247 Services food service and tourism workers are excluded Greek workers have protested against the bill a day before it was passed saying that the overhaul could create barbaric conditions many nations particularly in Europe are experimenting with a 4 Day schedule with some studies showing that it increases staff productivity joining us now from Berlin is Jen Bastian who is an economist focusing Southeastern Europe at the German Institute for international and security Affairs good to have you with us sir why Earth is Greece introducing a six- day week when as we said a lot of European nations are looking at shortening it you're very right Adrian you can say that it's a contrarian move by Greece by GRE legislation in many parts of Europe you now have companies experimenting and employees wanting 4day work week or hybrid working or we remember it from the covid-19 days the introduction of home office in that sense Greece is going in the opposite direction by the introduction of statutory longer working hours and longer working weeks could this potentially backfire do you think in that there may be a longer working week but productivity could fall I think productivity here is an important issue I'm not convinced that you can raise productivity through longer working hours in particular if it's involuntary it's about working smarter it's not about necessarily working longer productivity gains can be achieved otherwise better education better pay for your Workforce different forms of Recruitment and equal opportunity for men and women in the workplace Greece ranks something like 15th uh in the EU in terms of its minimum wage is this going to have an impact on on wages do you think will workers uh be paid extra for the hours that they work at least on paper it is suggested that they will be paid higher wages if they work longer but one should not forget that that may also mean that with their higher pay they also then can move into a higher tax bracket and make higher Social Security contributions at the end of the day what they take home may not be that much more and is it really voluntary do Greek workers actually have the power to say you know what no I'm I'm I'm sticking to a five day or a 4-day working week I think that anybody who's familiar with the Greek political economy knows that the negotiation position of the employer is stronger employers have discretion about how to implement longer working hours and to say no to such an employer you may risk losing your job you may risk that your fixed term contract is not prolonged then you rather say I'll do it even if it's involuntary really good to talk to you on counting the cost many thanks indeed for being with us sir thank you Adrian and that's our show for this week if you'd like to comment on anything that you've seen I'm at aigan on X try to remember to use the # AJ jctc or or you could drop us a line counting the cost at al.net is our email address as always there's plenty more for you online at al.com sctc that takes you straight to our page which has individual reports links and entire episodes for you to catch up on but that's it for this edition of County on the cost I'm Adrian finigan from the whole team here in Doha thanks for being with us the news on Al jazer is next