2025 Economic Outlook

2025 Economic Outlook

Jan. 21, 2025

Host: Dr. Jamie Mitchell

Guest: Dr. Ron Joelson

Note: This transcript is taken from a Stand in the Gap Today program aired on 1/21/25. To listen to the podcast, click HERE.

Disclaimer: While reasonable efforts have been made to provide an accurate transcription, the following is a representation of a mechanical transcription and as such, may not be a word for word transcript. Please listen to the audio version for any questions concerning the following dialogue.

Jamie Mitchell:

Welcome to another Stand in the Gap Today. I’m Jamie Mitchell. It’s my privilege to host today’s informative and what might be a stretching hour. Just yesterday, president Trump was installed as our 47th president, but now comes the hard work of governing. It’s hard to believe that it’s been nearly three months since the election was decided. One of the big issues that I believe the election was decided upon was the economy. The majority of the nation said that the economy was failing, and even more so, it was personally affecting people in their family budget. Today we want to discuss the economy and to help me as a longtime friend and mentor regarding everything economic and a return guest to stand in the gap today, Ron Joelson. Ron has been involved in the financial world for decades. He’s now retired. He last served at the Chief Investment Officer for Northwest Mutual Insurance. Ron has a unique perspective having been immersed in the investment world for his entire career, managing billions of dollars, and as part of his job analyzing and forecasting where the global economy is headed. Ron, welcome back to Stand In the Gap.

Ron Joelson:

Hey, Jamie, it’s great to be with you again. I love what you’re doing with Stand In the Gap today, so very happy to be here.

Jamie Mitchell:

Well, Ron, let’s begin with a 30,000 foot view of our nation and the economy. When you were with us a year ago, we were concerned about the direction of the economy, and I look back at some of my notes and some of the things we said. We were very, very, very concerned giving us an overall sense of where the United States economy is now is where we stand today. Give us a report card on the Biden administration handling of the economy and what they all have left behind, and what is the feel for how things will now unfold with a Trump White House. I hear all kinds of mixed signals. What in general, from your perspective, is the state of the economy?

Ron Joelson:

Well, Jamie, to be fair, at our last broadcast, you were very concerned with the overall. I was a little bit less, so I felt that the economy was uncertain, but on reasonable footing. But anyway, did the Biden administration mess things up? I’m going to have to be honest and say definitely. We had, as you recall, out of control inflationary spending. We had restrictions on oil drilling. Even you though you may have heard that permits were allowed, that was done was completely restrictive. Global warming agreements with political agendas were put in place. Border policies that were pretty crazy. There were extreme woke policies that weakened our military, and I would say the effectiveness of government, the Afghan withdrawal was pretty a disgrace, and it set the tone for a feckless foreign policy, frankly. And in the end, it was unclear who was actually making decisions, right? So for example, Biden didn’t even quite realize he signed an order restricting oil exports to countries that were then forced to buy from Russia.

And he funded terrorism by allowing Iran to export oil when Trump had banned it. And even the polls, Jamie, are showing that the public viewed him as probably one of the worst presidents in history. But the US economy has been pretty strong. It is showing some mixed, and I would call it Jamie, concentrated performance. So earnings and GDP growth has been okay, the 2024 GDP growth number, the real number was coming in at about 2.7% driven by consumer spending, government spending. And the former is looking a little suspect with higher rates. And the latter, mainly government spending is considered almost out of control and definitely inflationary. So that’s a mixed report card as you labeled it. And I would say a very low level of real activity because a lot of the consumer spending is coming at the expense of higher borrowing and government spending is also coming at the expense of higher borrowing, adding to the deficit. Does that make sense? Well,

Jamie Mitchell:

Ron, yeah, absolutely. With all of that, and you’ve mentioned a couple of things here and today, again, we’re viewing today’s program very educational, very informative, trying to help people understand certain terms and phrases. And so all those things that you mentioned, the climate things, the border foreign policy, even those things seem like they don’t have anything to do with the economy. They have everything to do with the economy. And Ron, what is GDP when you use that term? What is that and what does that mean?

Ron Joelson:

So gross domestic product is really the sum total of all goods and services produced and spent in this country. So it’s typically defined as consumer spending plus investment, plus government spending, plus exports, minus imports. So I know that’s just the math of it, right? So it’s really the sum total of the entire output of the US economy. That’s what we mean by GDP.

Jamie Mitchell:

And when that is high, that means things are active, productive people are spending, and businesses are probably profiting. Isn’t that correct?

Ron Joelson:

People are working. Usually you can’t have a decent GDP without small and mid-sized businesses getting in on the action. And of course, that’s where all the hiring is. So yes, those are all things you want to see, although if it gets too significant, it can also be a cause of inflation.

Jamie Mitchell:

Now, one of the things you also just mentioned was the whole thing of government spending and being out of control. When they talk about putting money in the marketplace or trying to flood the market or the country with money and trying to help the economy, it doesn’t really help that they’re either hiring for the government and spending in the government. And that’s been what Biden’s been doing mostly these past four years. Isn’t that correct?

Ron Joelson:

Yeah, that’s the problem when government spending is a big part of that formula I just laid out then is that real? What does that really mean? And if you’re in a deficit place, what you’re really doing is just adding to that deficit number. And consumers we’re doing that as well, right? If consumers are spending despite the inflation, then usually that means they’re borrowing on their credit cards or other things in order to be able to do that. So here you have a situation where both the consumer and the government are borrowing, and that has been fueling the growth in GDP.

Jamie Mitchell:

Ron, we got less than a minute. The stock market though, still has been doing well throughout these four years. Is there a reason for that?

Ron Joelson:

Well, first you got to understand what’s happening. Yeah, the market, if you define it as the s and p rose, about 25% in 2024, the world index was up a little less, maybe 17. And during the first fourth quarter, the s and p was only up about 2.4%. The concern, Jamie, is that about seven tech stocks have fueled the advance Apple, Microsoft, Amazon, Meta, et cetera, Nvidia. That was fueled by the perception that AI is driving the sector forward. But I would know if there’s always something that drives the market forward, whether it’s technology or manufacturing or consumer or housing. And this reminds me eerily of the dotcom bubble in the late 1990s. There were so many companies that went under and investors got burned because the idea was great, but not everyone was a winner. And eventually it was companies like Amazon that took advantage of technology and investors finally figured it out. That’s the same thing today. It’s not going to be AI, but who’s going to capitalize on

Jamie Mitchell:

AI? Well, Ron…, hang on friends, when we come back, we’re going to talk about the Federal Reserve. We hear about it all the time. It’s in the news. Ron’s going to help us understand what it is and what we need to be concerned about it. Join us as we’re talking the economy here at Stand in the Gap. Well, welcome back. This is one of my favorite programs each year that I get to do. I call it my Economic Outlook. And in Look program, Ron Joelson, a seasoned financial advisor and analysis is our guest, Ron. Every week, if you turn on the news, people are talking about the Federal Reserve. We also are aware that we are walking on thin ice. Everybody holds their breath and proceeds very gingerly until the Fed Chairman makes an announcement each quarter about where the rates are and all of that. It’s my guess that the people listening today know very little about the Fed. Ron, what is the Federal Reserve? Where did it come from? How does it influence fiscal policy in our nation?

Ron Joelson:

Well, Jamie, the origin goes back actually to the panic of 1907 when there was a secret meeting off of Jekyll Island in the coast of Georgia. There it was 1910, the most powerful bankers of the day met, including Warburg. And there were a few others. I think they told workers it was like a poker game or something like that. But the panic was brought on by a liquidity crisis and a crisis and a lack of faith in the banking system. So the meeting was set up to create a system. They came up with seven regional banks that would be backed by the government and be the lender of last resort to member banks, and they certainly would have a tremendous amount of power. And that was a concern for democracy, which was supposed to give the people final authority. And they were governed by Congress, but still fed appointments are not elected positions, and they do control the monetary policy, which is what the Fed does even to this day. Today, they have a dual mandate of controlling inflation and unemployment, and they do that through tight and loose monetary policies. They directly control the short end of the curve by changing rates that banks can borrow from each other, but then they impact the long end of the curve as well by making open market purchases.

Jamie Mitchell:

So these seven regional banks, and they have one in New York and Denver, and they’re positioned throughout the country, our local banks or the banks that may be the consumer deal with relate to those banks in some way, and how do they relate and what happens in that transaction?

Ron Joelson:

So what happens is a local bank is given a rate that they can borrow from the Fed and through their local regional bank. And basically what that does is it makes it either cheap or expensive to borrow money. And it also sets the reserve policy. How much do banks have to hold in reserves for risky borrowers like you and me? And that’s also controlled and established by the Fed. So it really is the mechanism by which the Fed controls the amount of money in circulation at any given time.

Jamie Mitchell:

So right now, Jerome Powell, if I understand that correctly, he’s the Fed chairman. He has been appointed to that position, and that position has, I think it’s a 10 year term. So a lot of times that Fed chair overlaps presidents as it will do right now where Jerome Powell has been both the Biden and now the Trump Fed chair. But why do we kind of walk with fear and trembling when we hear that Jerome Powell is going to be making an announcement about rates and those kinds of things? Why is his announcement so influencing the economic position here in America, Ron?

Ron Joelson:

Yeah, well, it’s really because markets trade on information. And so market participants are trying to understand what the Fed both thinks of the economy and what their rate actions are going to be as a result of those views. Both of those things are important. The first view tells you what the Fed thinks is going to happen. Are we going to be in a high growth period or not? The second view affecting interest rates has a direct impact, certainly on the bond market, but if the bond market is more attractive or less attractive, that can impact the equity markets as well. So everybody’s looking for that information and whatever the Fed says, that’s usually the first indicator of what that information is going to be, good, bad, or ugly.

Jamie Mitchell:

And so for the common consumer who’s listening today, they go to buy a house and obviously they’re probably going to have to go to a bank to get a mortgage. The Fed has greatly affected that because what they say, the rate of borrowing money is trickles down to the person getting a mortgage. Is that how it works?

Ron Joelson:

Well, that’s not exactly how it works. In other words, the Fed really controls the very short end of the curve. So short-term borrowings and mortgages are typically longer term, but very often what happens on the short end does get reflected on that longer end of the curve, but not always. And so it’s an indirect impact. However, the Fed can affect the long end by buying and selling securities and the longer end, mostly treasury securities, so they can impact the long end, but through a different mechanism than just increasing or decreasing rates.

Jamie Mitchell:

Now, Ron, one of the things that troubles me about the Federal Reserve is how much power they have and essentially the unelected nature of these governors or the people that are in there. I mean, we know Jerome Powell’s name because he’s the guy who comes out and make the announcement, but we don’t know any of these other people and they’re unknown to the American people, and I don’t want my conspiracy spirit to come out, but is it a conspiracy theory showing up, or is the Federal Reserve really on the up and up? Is there something we should be concerned about there?

Ron Joelson:

Well, the conspiracy theory actually came about because major financial objectors to this system happened to all be on the Titanic in 1912. And so when it sunk, people like John Jacob Aster and others went down with it and mysteriously people like JP Morgan and a few others were supposed to be on the and canceled at the last minute and voila. There’s your conspiracy. The Federal Reserve Act was actually signed shortly after that in 1913. So we don’t really know, but you can see how those events could be interpreted that way. And when you start looking at all kinds of crazy things people are talking about now, like the Kennedy assassination, and remember the military industrial complex that Eisenhower warned about and Kennedy referred to? Well, there is something concerning about what we’ve been seeing possibly throughout history. But anyway, the central bank itself is a good thing. But as you know, Jamie, the problem of evil still exists and fallen men are always involved. And so you’ve got a lot of people that are responsible in the Fed. And so if they’re not acting with a true hand or with a clean hand and a pure heart, well then I’ll just leave it at that.

Jamie Mitchell:

Ron. One of the things that’s I guess kind of related to this, and we have some time I want to just address, and that is this whole issue of the gold standard gold backing up our currency. We’re hearing whispers that there are some states here in the union who are discussing about making gold a part of backing up their state funds. What is really the history? If you can give us a little bit about the idea of the gold standard and gold in Fort Knox backing up the dollar I have in my pocket, is that still how we view money or is there nothing backing up our money today?

Ron Joelson:

Unfortunately, the gold standard left under Nixon in the seventies, and so the real answer is no, nothing is actually backing. It used to be that you could exchange your bills for gold and that there literally was gold behind every dollar bill that was in the market that ended in the 1970s. And in effect, what you have now is the currency just simply represents the faith that people have or don’t have in the government that stands behind it, which is why everyone is so concerned about borrowing, because if there’s that much borrowing in the system and people lose faith, what will that mean for the dollar? Does that make sense?

Jamie Mitchell:

It does. And that’s why when we look at things like the national debt or the deficit that we run in the government, that plays a part in how people view the American dollar, doesn’t it?

Ron Joelson:

It does. It does. It’s all about full faith and credit, and I know maybe we’ll talk a little more about that, but the reality is that if your economy is strong and people have confidence in it, your currency is going to be okay. So you want to make sure that you’re not doing things that could jeopardize the full faith and credit that individuals have with respect to that government. And then the currency.

Jamie Mitchell:

Ron, we didn’t get to finish the first segment, but based on what you’re seeing, Trump is now the president. He has to unravel this. He’s going to have to deal with the Fed. His plate is pretty full when it comes to trying to navigate the economy and where we stand today, doesn’t he?

Ron Joelson:

Yeah, he really does have a full plate because he’s talking about things like tariffs and other things, and that could be very inflationary and it could also potentially reduce the GDP, but I actually think people misunderstand that he believes in the threat of the tariff, but he doesn’t actually want to impose it. And if people do what the US is asking, won’t, Canada’s a great example. So already we’re seeing discussions in Mar-a-Lago about the Canadian trade and they first were saying, Hey, we’ll put a tariff on your stuff, but now they’re coming back and saying, no, no, no, we’re going to play ball. And so there probably won’t be a tariff with Canada. The point is, it’s the threat of it. And if he uses that wisely, I think he can do a lot of good with it.

Jamie Mitchell:

Well, like many things in the government, the Fed was originally started to solve a problem and help run the country better, but things started to shift. We just need to keep our eye on the Fed when we return. What is crypto? What is Bitcoin? How is that changing the economic landscape? There are terms and ideas that we need to be aware of so that we have a full understanding of fiscal policy here in the United States. Well, friends, welcome back. Remember that every Stand in the Gap today program is archived on our website. You can go to stand in the gap media.org or download the APN or Stand in the Gap app, and that way you can take us everywhere you go. Please take a moment, take a look at the different programs, send today’s link and other programs to a friend or better to a pastor.

And once your pastor goes to our website, I believe he’s going to be overwhelmed by the amazing resources we have. I was speaking at a bible conference and the director looked at our resources and he said this, this is a treasure trove of help for any pastor and Christians. They need to know what you have. Help us get the word out. And if you go on there, you’ll see and listen to Ron Joelson, our guest today, he’s been on before. You can listen to last year’s economic outlook, but Ron, we’re discussing resources. One of the things you can help us on is can you offer maybe two or three recommendations for our listeners who really want to keep up with the US economy? What do you recommend people listen to or read or subscribe to?

Ron Joelson:

So this is a little bit hard for me because I do get access to things that a lot of people don’t. I used to recommend Bloomberg, but it’s highly biased politically, and the Wall Street Journal is as well. So for many, I would say read the journal, but focus in on the opinion sections. They still have some very interesting balanced views there, and they correct a little bit for the political bias in some of those opinion articles. I would check out a website called 14 forty.com for conservative news, including business news. I also like the National Review, frankly, which is available online or in print. And don’t stop looking at Bloomberg, especially for the most current information and Wall Street Journal, but just know that there is a bias. You would think business news, Jamie wouldn’t have that bias, but it absolutely creeps in and it’s disappointing to see it, so you got to be aware of it.

Jamie Mitchell:

Well, Ron, if you do look at any of those news outlets and blogs and websites, everybody is talking about crypto currency. Matter of fact, we even heard this weekend, president Trump make indication that cryptocurrency and Bitcoin and all of that, he’s concerned about it and he wants it to be a major part of his economic agenda. What is it and where did it come from and how is it different than traditional currency and investments?

Ron Joelson:

Well, crypto Jamie is pretty interesting because it’s not so easily manipulated. The technology behind it is blockchain, and in blockchain, every trade is recorded. Every trader of Bitcoin, for example, has actually the trades on their own system, so you can’t really manipulate prices or anything else. Now, it still can happen because there are rules about how to mine crypto. And so the way you can mine and find more Bitcoin, et cetera, that can change over time and it does. Supply does affect the price just as it would anything else. Traditional currencies are backed by the full faith and credit of the underlying countries, so their worth tends to reflect the economies of those countries. Crypto is not, I mean, it is basically the value of Bitcoin is what somebody is willing to pay for it. That of course, is the very definition of speculation. And Bitcoin may be the best one today, but it may not be. For example, there are some problems with Bitcoin and the number of zeros. If you spend $1 on Bitcoin, you’re going to get 0.0, 0, 0, 0 0 1. If you make a mistake, you’re out of luck. So that could change over time and then all of a sudden Bitcoin could be out of favor and that would be a problem.

Jamie Mitchell:

Ron, I have to be honest with you, this is one area of the economy that I’m still clueless about. I know that if I were to call up a stock broker or an investment agent, I can say, Hey, I want to invest a thousand dollars in a certain company and I would get back whatever the stock is that day. Is that what you do with crypto? Do you make investments in crypto or do you just buy the currency?

Ron Joelson:

Well, yeah. So there are crypto funds out there where they look at all the different currencies and there’s a manager that makes an assessment as to which currency actually is a good one, Dogecoin or Ethereum or Bitcoin. And so you can go to a fund manager and you I guess believe that they know more than others and that’s a good way to do it. Or you could buy the individual underlying Bitcoin or cryptocurrency itself and do it that way. But it’s a pretty frothy area right now. The only way when people ask me whether they should do it, I say just consider it to be something in your portfolio that could have an incredible swing up or down. And so therefore, don’t make it too big a part of your portfolio.

Jamie Mitchell:

Ron, this past year or so, we heard the news about a Sam Bankman freed the CEO of FTX and a crypto investors whose company went bankrupt November 22. By December 22, Bankman Freed was arrested, indicted on seven criminal charges, wire fraud, commodities fraud, security fraud, money laundering, and even campaign finance violations. He was convicted on all of those counts in March of 24 and sentenced to 25 years. Someone called them the Bernie Madoff of crypto that obviously gave cryptocurrency a bad name or put a cloud over it. Was that an anomaly? Was it revealing the danger of this type of investment or was this just a bad guy who did a bad thing? What are the risks and should people be concerned about it?

Ron Joelson:

Well, Bankman freed, literally stole millions from investors by basically illegally running the way in which the exchange that he was responsible for took dollars and converted them to Bitcoin and other currencies. The exchange was privately owned. He defrauded everyone in the management of it. So I think he was a bad guy, but there are many bad guys. And the risk here is that this industry is so new that we haven’t really figured out the best way to regulate it. And regulation isn’t always bad, right? FINRA and other things, regulatory bodies do make sure that investors are getting the information and there’s some accountability and standards. And so other things could happen, even though blockchain technology itself is pretty good. There still has to be a mechanism around converting currency to crypto and back. And that’s where we have some of these fraud risks that frankly are always there. So regulators have a lot of work still to do to figure out how to tighten this. It’s early stages, and so there’s probably more enhanced risk today than there will be, and maybe in a couple of years when they figured out the best way to control and make sure everything is on the up and up.

Jamie Mitchell:

Well, like you said, evil in people’s hearts makes people do bad things, whether it was crypto or regular stocks or banking or whatever. If you have somebody with evil in their heart, these are the kinds of things that happen. Ron, with just a few minutes left, if you listen to conservative radio or tv, a lot of times their advertising has to do with fruits and vegetables, supplements or pillows or now we hear so much about investing in gold. Why is this idea of investing in gold so prevalent within advertising? And as we mentioned before, gold used to back up our currency. Is this a good thing, a bad thing? Should we be wary of it? What’s your sense or feeling of why has gold and silver now emerged as an investible commodity?

Ron Joelson:

So gold and silver are typically what I call part of the fear trade. When people are afraid that government spending is out of control. If the US can’t be the currency of last resort, then what is right? So people are saying, wow, I’m worried about all this spending and the dollar’s going to lose value. So what do I have? Where can I put money if I’m worried about safety? And typically historically people have said gold, even though gold has often not done that particularly well during times of crisis and because there’s less liquidity in that investment. So therefore when a lot of people decide for whatever reason to sell it, it’s probably going to go down significantly. So what I tell people is do not put all of your savings in gold because you’re worried about what’s going to happen to the US, but do consider that and other commodities as part of a very diversified strategy that can help offset certain events that may occur in the future.

But if you put all of your money in that kind of an investment, then you are facing the high volatility of a commodity investment that may not perform the way you expect it to be. So even though it’s something people like to turn to when there’s uncertainty, it hasn’t always proven out. And so therefore, like everything else, moderation is key. Asset allocation is key. And by the way, to bet against the US government, which is what a large gold trade does, I think is still a mistake in light of the new administration and the light of other things that I think are still ahead of us and this country.

Jamie Mitchell:

And the fact of the matter is what President Trump is going to have to do. It’s not going to turn things around in the next 60 days, but we have so many fiscal policies and decisions and executive orders that need to go through that will begin to set us back on a free market, pro-growth, pro capital type of government that we have been tremendously lacking. And when that is lacking things like business and investments and investments from other countries and all of that plays a big, big role in where we’re at, folks, we need to be discerning. There are no get quick, rich schemes. We need to walk prayerfully and carefully in the world of money. When we wrap up, do you know what Doge is? Not dog DOG, but DOGE. Do you know what it is? It’s been in the newspaper, it’s been in the news, people have been talking about it.

When we come back, we’re going to talk about Doge, how it’s going to affect us, and we’re also going to talk a little bit about inflation here at Stand In the Gap. My good friend Ron Joelson has been my guest today and we’ve been unraveling the economic issues facing the United States right now. One of the big political issues that has now become an anticipated policy to be acted upon this new administration involves the idea of government efficiency. You mentioned it before, the out of control government spending. I think all Americans know that the government wastes money left and right. We’re not good at managing things. We’re not good stewards of our tax revenue. I mean, you look at the post office and could figure out if it was privately owned, it could probably run better and even make money. And all of that’s tied to our economy. Enter Elon Musk and Vivek Ramaswami, two successful businessmen who have been asked to head up a new department of government efficiency, doge, DOGE, Ron, what are they attempting to do? I’ve heard things like it’s upwards of 2 billion of savings that they can trim out of our budget. Is that possible? And how does that affect our economy? That’s our topic today. How does government efficiency and what they want to do with Doge going to really affect and move the needle when it comes to our economy?

Ron Joelson:

Yeah, well, $2 billion, it’s more than possible. I mean, it’s doable. And in fact, there have been proposals and reports that show that of money easily being accomplished. They’re talking about things like eliminating Department of Education or greatly reducing it because education should be brought back to the state level. Trump has said that, and that’s where it’s done anyway. There’s a lot of overhead at the Department of Education and there are a lot of other places as well. So the question is, isn’t 2 billion doable? That’s very, very possible. But is it enough when you have a deficit north of about 1.8 trillion per year and the overall deficit is 37 trillion or that’s the amount of debt we have, is that 2 billion is a drop in the hat? But Jamie, if Argentina can balance its budget in a few years, you might be surprised. And the key is not to tackle the 37 trillion.

The key is to tackle the 1.8. If we can stop adding to the deficit, we can actually with inflation grow out of that 37 trillion and we will start to build the confidence in the dollar and the broad economy, and that will support having certain amount of debt. We just need to show everybody that we are not going to add to it. And doing things like making federal workers come back into the office, halting the automatic budget increases that are literally built into our system. So again, we don’t have to eliminate the deficit. We have to restore confidence. So the impact of spending cuts will reduce, we’ll have some negative effects. It will reduce GDP, and that will impact the market because there’s less consumer and government spending. But I believe that will be offset by multiple expansion, which reflects the belief that governments are finally doing the right thing. Does that make sense?

Jamie Mitchell:

It does. Ron, the big talk in Washington is a big spending bill, the debt ceiling, those kinds of things. They talk about doing one big beautiful bill or two bills on the president’s table right now. That’s what he has to deal with Congress in the next few months. When they say debt ceiling, again, an educational point for our listeners, what do they mean by the debt ceiling?

Ron Joelson:

Yeah, because the law is such that there’s only a certain amount of borrowing that the government can do, and then in order to breach that ceiling, there needs to be congressional action taken. And so that’s going on. I mean, everybody understands you got to make it difficult to spend more money, but the reality is that it’s so out of control that if you were to actually not allow that ceiling to increase, you could jeopardize the full faith and credit of the government supporting the currency. So the reality is, in the short term, at least, we do need to continue to increase the limits that are imposed by law. The problem will be if you can no longer just simply rely on it, you actually will have to start doing things to ultimately cause you to bump into that ceiling more and more or more and more infrequently. That’s the key. You’ve got to lower the amount of borrowing that you need on a day-to-day basis. So that debt ceiling eventually will not be something you need to raise because you, you’ll no longer be adding to the very high deficit that we have. That’s going to be the key.

Jamie Mitchell:

And this is where Doge comes in because between now and when that debt ceiling bill comes, if they can get in there and they can show at least to some of the more very conservative fiscal congressional leaders that major spending cuts are happening and that there is a appetite to start reducing the amount of money the federal government spends on programs, on employees, on benefits, on all of that. If Doge can start saying, here are some ways that we can reduce how we spend, then we can put a new debt ceiling in, but it may also last longer before the next crisis. Isn’t that correct?

Ron Joelson:

And you as a senator would be willing to vote for that debt ceiling change because you know that they’re actually finally doing something about their spending.

Jamie Mitchell:

Ron, we got a few minutes left. The word inflation, we hear a lot about it. Many don’t understand it in a few minutes. Can you give a layman’s term? What is inflation? How does it happen? Why is it bad for the economy?

Ron Joelson:

Yeah, so really quickly, and I guess can we fix it? Well, inflation is simply the percentage increase in prices over a period of time, and it’s measured in a lot of ways. But CPI, consumer price index is the most common. It reflects the consumer what we care about. There’s also producer, price index and other things. The important thing though is to remember that even when inflation is zero, as Trump is saying is his goal, that won’t reduce prices. It just means they won’t be increasing. So don’t expect your pizza to go down from 15 bucks all of a sudden back to the $10 it used to be. It’s bad for the economy because it usually is accompanied by higher rates, which impacts housing. It’s an important part of the economy. And consumers who now have less real disposable income when they borrow money, it can help investors with diversified portfolios, those higher rates, which is why I always recommend a balanced portfolio. But nonetheless, for the most part, that inflation is painful to consumers could shut off their spending, and that’s going to dampen the economy.

Jamie Mitchell:

And that’s why people are spending more in the grocery store. They’re not buying certain things because they look at it and say, Hey, this is just too much money. And it’s also, frankly, why one of the first things President Trump wants to do is to get some of our natural resources, gas and oil flowing again here in America, because if gas prices go down, that affects transportation, that affects the supply chain. And in the long run, the theory is that some prices will start to come down because it’s not costing the people as much to produce it or provide it and to bring it to the consumer. Isn’t that essentially why he’s going after the oil and the gas and getting that flowing?

Ron Joelson:

Yes, I think that’s definitely a part of it. And traditionally, oil prices have been a big source of inflation, and I do think putting people or putting barrels out of the ground is going to help with respect to inflation, and hopefully it won’t be offset by so many tariffs that could in effect be inflationary.

Jamie Mitchell:

Wow, this has been a tour de force when it comes to money and economics. Thank you, Ron Joelson, you’re always a blessing on our program. We will all be watching the economy, how fiscal policy plays out. Friends, the Bible addresses more about finances than hell, heaven and the Holy Spirit altogether. So therefore, this should matter to you. Hope today has been informative, inspiring until tomorrow, live and lead with courage.