The national debt hit $38 trillion, and yes, you should care

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How much debt is too much debt?

We don't really know yet, but we sure do have a lot of it from American public media.

This is Marketplace.

In Los Angeles, I'm Kyle Risdahl.

It is Thursday, today, 23 October.

Good as always to have you along, everybody.

We begin the show today with where we left off yesterday and the observation that the total federal debt since the beginning of time has now topped $38 trillion.

It was $37 trillion just two months ago, and the rate of increase in that debt is increasing.

Now, $38 trillion is an unfathomable amount of money.

It's so much it's almost make-believe.

It's not like the United States is going to go bankrupt.

We should probably do a separate story on why that's the case.

But the story we are going to start with today is what being $38 trillion in the hole is going to mean for the economy, for you and me, and for the future.

Marketplace Subri Benishwar starts us off.

The pile of money the U.S.

government owes to investors here at home and around the world is currently about the size of the entire U.S.

economy.

A large national debt is damaging to the country in so many ways.

Maya McGinnis is president of the Committee for a Responsible Federal Budget.

The problem is most of it's invisible.

You don't really realize it.

Take, for example, interest rates and mortgages.

If in fact we didn't have this debt outlook, interest rates almost certainly would be at their pre-COVID levels.

Kent Smeters is director of the Penn Wharton budget model.

So you remember the good old three, 3.5% mortgage rates?

That would actually still happen today.

As the government borrows more and more, it makes it more expensive for everyone else to borrow because everyone is fighting for a loan, whether it's you for a car loan or the government for a bond.

And as the government fights harder, interest rates rise.

Mortgages are just the start.

Again, Maya McGuinness.

If you're choking off some of the money that might go to investments for small businesses or new private sector investments, and you're using that for consumption in the federal government, it means that we are growing our economy more slowly than we otherwise would.

More concerning than the size of the debt may be its growth trajectory.

Last year, the government spent 13% of the whole budget just on interest.

The Congressional Budget Office says the GOP tax and spending bill will add $3.5 trillion to the debt over 10 years.

At some point, it will be at a level where we can't manage it anymore.

Len Berman is a fellow at the Urban Institute.

And at that point, it could create a real crisis.

When exactly that point will come is not known.

The Penn-Morton budget model predicts that when debt to GDP reaches 200%, it'll be mathematically impossible for the U.S.

to pay it off.

That would happen within 20 years.

The government may need to print money to pay its debts, which unleashes inflation and sends interest rates skyrocketing.

And it would have to cut spending or raise taxes so abruptly it would cause widespread economic trauma.

Lynn Berman.

If we deal with it now, we can do it in an orderly way, which entails

little or no real economic repercussions.

But it may take a crisis to get change.

In New York, I'm Sabri Beneshore for Marketplace.

Ain't no sign of a crisis on Wall Street, yet.

We'll have the details when we do the numbers.

There's federal debt, of course.

Sabri just gave us two and a half minutes on that.

There is consumer debt, too, of which we are piling up plenty.

Last week, both American Express and JPMorgan Chase beat earnings expectations, Amex in particular crediting its revamped platinum card.

But both companies have, for a while now, been in a battle over their premium credit card offerings, most specifically, the perks that come along with paying almost $1,000 to have one of those premium cards.

Amanda Mull wrote about all that at Bloomberg Business Week.

Good to talk to you again.

Thank you so much for having me.

Could we start with some of the perks that come with these cards?

Because my goodness, I mean, airport lounges, yes, but there's like, there's like the U.S.

Open had a whole big wing ding.

I mean, what do you get when you spend doggone near $1,000 on a credit card?

Well, the perks that you experience physically, the big one is airport lounges.

Like, that is like such a huge driver of new card applications.

People are really interested in being able to make their flying experience a little bit better.

And I think that that is somewhat logical if you've been on a plane anytime in the past 20 years.

And then these card issuers have started taking that logic and putting it into more spaces.

Like at the U.S.

Open this year,

you know, both Chase and American Express built like different sort of exclusive, private, air-conditioned places where you could duck in and get some food, get a drink.

This happens at concerts.

It happens at sporting events.

It's even expanded into dining, where

if you have one of these credit cards, you can get access to particular reservations at hot restaurants.

And then there's like a whole wealth of statement credits that you can get money back on hotel stays, on airline tickets,

on Lululemon leggings, on all kinds of stuff.

Ah, yes, the Lululemon leggings benefit.

You have an amazing turn of phrase in this piece.

You talk about the sheer immensity of spending by the wealthy in this economy.

And we've talked elsewhere on the program in the past number of weeks about how the wealthy are really driving things.

And this is sort of a business model come to life, right?

These credit card companies are banking on these big spenders.

Yes, absolutely.

The stat that's been bandied around a lot is that the richest 10% of American households, which is roughly over $250,000 a year in earnings, are doing about half of the country's consumer spending.

And that's like a third of GDP, just among those 10% of households.

So, if you are in a volume sales business, if you make money when people spend more money and spend it more often, then it sort of makes sense to go after this consumer base.

So, here's the question: Is it working for these companies?

Or is it too soon to tell, right?

I mean, premium cards have been around for a while, but the

huge bump in prices is relatively newish.

By every indication, it's working really well for these companies.

The consumer base for for premium cards is the fastest growing part of the cards business.

It is,

you know, you're onboarding more and more people and more and more of these cards are coming to market.

And then these programs are also straightforwardly profitable for the banks that run them.

There's a lot of money sloshing around in these accounts and banks, even though they put a ton of capital into attracting these customers, they are getting a pretty good return on that investment.

I feel so lame just having my stupid United Miles credit card

from bygone days.

You're out reporting the story.

Did you taste any of the perks?

Did you get any of the Benny's?

Or, you know, you're just working stiff.

Well, I went to the U.S.

Open to see the sort of Olympics of brands that they do there.

I also went to a Chase private dinner at Kabawa, which is a restaurant in the East Village that is pretty hard to get into.

Capital One had the artist Anna Wayant do an installation in a Gilded Age mansion on the Upper East Side.

I went to a tea party

at that exhibit.

You're pretty busy reporting this piece out.

I'm just saying.

Yeah, my beat is like not the sort of like hardest work in the world.

I will say that.

I get to go to a lot of fun stuff, and I got to do a lot of fun stuff for this piece.

Amanda Mull, senior reporter at Business Week.

Buying Power is the column she writes.

Amanda, thanks a lot.

I appreciate your time.

Thanks.

Always Always glad to come on the show.

Oh, for the halcyon days when people wore eyeglasses so they could, you know, see better.

Here in the age of artificial intelligence, not so much.

Meta has those very popular Ray-Band smart glasses, retail price $400, give or take, which can take pictures or videos or help you plan a recipe based on what you can see in your refrigerator.

And glasses may just be the tip of the AI wearables iceberg.

There's the Amazon-backed B, which is a bracelet that records and transcribes everything you say.

And there is the yet-to-be-seen device promised from OpenAI and iPhone designer Johnny Ive.

Silicon Valley, as it is wont to do, thinks that this new new thing, always on AI gadgets, are going to change how we humans work and shop and do just about anything, including how we interact with other humans.

Marketplace's Matt Levin talked to some early adopters.

When I visit someone's house for an interview, I say pretty quickly I'm recording after they open the door.

So it was a little strange to be on the other end of that interaction when Philip Comens greeted me at his home in suburban Sacramento.

Hey, Philip, hey, nice to meet you.

Nice to meet you, too.

Coming in.

I noticed you got the pendant on, so you're recording right now.

I am, yeah.

Gotcha.

Okay, I'm recording too.

Let's see, we're both ready.

Clip to Philip's t-shirt is one vision of our robot-enhanced future: the Limitless Pendant, a sleek one and a quarter-inch-wide black aluminum circle that records all the audio around Philip pretty much all the time outside work.

The recordings and their transcriptions are stored in an app on his phone where an AI chatbot can then summarize and analyze them.

Philip's wife, Corinna Ketta, also has a pendant.

She's reading me some reminders the AI automatically generated for her based on yesterday's conversations with her husband.

Top priorities, journalist visit today.

You and Phil talked about tidying up before.

Sorry.

So yeah, it lists things like take out the trash, manage the sues situation since we keep the shoes at the front door.

The always-on pendant also captures the not-so-pleasant aspects of their marriage, like this fight from a few months back.

I'm not gaslighting you, I told you not to.

If you're cringing at the thought of you or your partner being able to replay every fight you've ever had from the convenience of your phone, Corinne and Philip say that's not how they use it.

Philip has asked the AI to act as a couples therapist and tell him how he can improve his communication.

And Corinne has learned a lot about herself reading the transcripts and AI summaries.

The fact that it records the like deeply unflattering things that you say right in a moment of weakness or when you know you're being really defensive is kind of the stuff you really actually need to see.

While an always listening AI may be helping Philip and Corinne maintain their relationship, 19-year-old McClain Duncan was hoping the Limitless pendant could help him start a new one.

I've been on date before and I've worn it.

Oh, tell me what that was like.

Can we bring it up?

I'm not going to bring it up because it didn't go well.

Duncan is actually an engineer at Limitless.

He didn't want to replay the audio or read the transcript from his date, understandably.

For the record, the date knew beforehand he was planning on recording.

Duncan says he's asked the AI for feedback on how his dates can go better.

Like,

what am I doing wrong?

In prehistoric days, that's a question you would ask your fellow humans.

Like, you can maybe, you know, debrief with your friends or something after, but they don't have the context of like going on the date.

Like, how you tell the date is probably going to be way different than how the person you went on the date told the date.

That pin has like that leg up that your friends wouldn't have.

When I asked Duncan if his dream date would be wearing an AI wearable too, he said he has someone different in mind.

I think my dream partner is like wears a sweater and like reads books.

And so kind of like the opposite of someone who's like very tech focused.

The limitless pendant costs around 300 bucks.

The company says it's sold tens of thousands, but wouldn't give me a more specific number.

There's no widespread adoption of these always-on AI wearables just yet.

But if you work in AI, chances are you've seen them in the wild.

Although it's more distressing if you know they're probably there and you can't see them.

Allie Miller is an AI consultant for Fortune 500 companies.

I just always have my guard up.

I find myself looking around a lot more.

I find myself looking at people's wrists or necks or ears.

I find myself tracking where the rest of their team members are.

It's not a great position to be in.

At a recent AI conference, Miller found out another attendee secretly recorded what she thought was a private conversation without her consent.

In most states, that's actually legal.

That guy wasn't using one of the newest generations of AI wearables.

But Miller sees a near future where everyone needs to assume they're being recorded at all times.

It's made her less trusting and more careful about what she says.

It's a strange thing that part of being a human is a weak memory.

We did not evolve for every single thing that we are saying or doing to be remembered.

From her perspective, even if AI never forgets, maybe humans still should.

I'm Matt Levin for Marketplace.

Coming up.

I've had my issues with the Swifties over the years.

Oh, I'm not touching that one first, though.

Let's do the numbers.

Dow Industrial is up 123 points today.

3 tenths percent, 46,734.

The NASDAQ gained 201 points.

That's 9 tenths percent, 22,941.

S ⁇ P 500 increased 39 points, 6 tenths percent, 67 and 38.

Amanda Mull and I were just talking about credit card companies.

Visa ticked up 2 tenths percent.

MasterCard rose 4 tenths percent.

American Express lifted about 8 tenths of 1%.

The sales of existing homes increased to a seven-month high in September.

That's according to the latest report from the National Association of Realtors.

Slight decrease in rates, mortgage rates, that is, boosted those home sales by 1.5%.

That is month over month.

Bond prices fell.

The yield on the tenure T-Note.

I've said that a million times.

You think I did it right.

Tenure T-Note increased 4.0% on the yield.

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However,

oil is still way down for the year because there is more of it being pumped than we are are using.

The International Energy Agency, in fact, figures supply is going to outstrip demand by a record 4 million barrels a day come next year.

So the assignment for Daniel Ackerman today?

What happens to all that extra oil?

There is a lot of oil sloshing around the global economy right now.

Tom Sang, a professor of energy finance at Texas Christian University, says OPEC is producing a lot, so is the U.S.

You have also emerging production coming from places like Guyana and Brazil.

So I don't know if I want to call it a glut, but certainly oversupply relative to demand going on presently.

Sang says much of that oversupply gets loaded onto oil tankers destined for question mark?

Some of these literally sit offshore until the price goes up.

The tankers basically turn from modes of transit into storage facilities.

Shipping analyst Ed Finley Richardson says you can see this on satellite images of oil shipping hotspots.

Where you have dozens of tankers which are barely moving for months at a time.

And it's a lot like a parking lot full of old cars.

Except that right now, those old cars are collectively holding about a billion barrels of oil.

That's the most offshore storage since early in the COVID pandemic, when oversupply briefly pushed oil prices negative in some places.

Ellen Wald of the Atlantic Council says back then.

There was a really big concern that all the storage facilities like in the U.S.

were going to overflow because consumption dropped dropped drastically because nobody was driving anywhere.

We're nowhere near that situation now, but Wald says there's another place surplus oil tends to go in times like these.

Countries start to refill their stocks.

The U.S.

and China have both been buying cheap oil and setting it aside in their national reserves, but it's unclear how much demand for that oil will exist in the future.

Around the world, electric cars are really taking off.

Energy researcher Amy Myers-Jaffe at New York University says that includes in the world's biggest auto market.

One in two cars sold in China today are electric.

So the oil parked on all those tanker ships could be floating there for a while.

I'm Daniel Ackerman for Marketplace.

There are jobs that used to exist in this economy that for all kinds of reasons, offshoring, automation, straight-up supply and demand for the goods or services in question, they just don't exist as much anymore.

Switchboard operators, assembly line workers by the thousands and tens of thousands, and in perhaps a new addition to the list, critics.

Spencer Cornhaber wrote about the job of the critic, movies, theater, TV, culture more broadly, and what that industry's future might be.

He's a staff writer at The Atlantic.

Spencer, it's good to have you on.

Thanks Thanks for having me.

It is, you write,

a tough year this has been for the career of those who do criticism in this culture.

Explain why, would you?

Well, we've just seen a bunch of layoffs and firings and reshufflings at traditional media outlets, whether that's the Associated Press killing its book review program altogether.

or Chicago Tribune offering a buyout to its movie critic, which basically left the city of Chicago, which is the home of Roger Ebert, the most famous movie reviewer, completely without any staff print film critics, which is, to me,

those are all very dark and ominous developments as someone who grew up reading criticism and still loves it.

Yeah, well, look, I did not grow up reading criticism, but it is a dark cultural moment.

Let me ask you this, though, to the marketplace, if you will, of this bit.

There is, you write, still demand in this society for the kind of criticism that these folks have been doing.

And yet, supply

kind of seems to be, at least in old school-ish media, is dwindling.

Is there another source of criticism that we can all turn to?

Yeah, I mean, you often hear people say, oh, criticism is dying, or there's no appetite for it anymore.

And that's just really not true if you look at platforms like TikTok or YouTube or Substack, which are really kind of overflowing with hot takes and considered opinions about, you know, movies, T V, books, you know, fashion.

it's just that some of the traditional norms and certainly the economic model is different yeah keep going with the economic model thing right because it is as you write the problem the profession faces is material not spiritual right somebody's got to be willing to pay for this criticism right and you know in the old days critics tended to be staffers they had editors they had a bureaucracy of

ad sales behind them, which they were insulated from.

Now, basically, critics are entrepreneurs.

They are sole operators who have to build an audience and figure out a way to make a buck.

And those prerogatives are often intention.

Other problem is that critics have to sort of chase virality and serve their audience in a much more direct way than traditional critics really had to do.

So they're kind of encouraged to pop off with less informed takes or sort of silly filler content that might not be really what got them into the profession in the first place.

Yeah, but you got to go where the consumers are, right?

And if consumers want 45 seconds on TikTok or a quick paragraph on Substack, then that's what you got to do.

I think that's right.

And I think that, you know, I don't want to be the person in old media who's sneering at this new class.

I think there's a lot of amazing, amazing criticism happening on these platforms, even from people you wouldn't expect to see it from.

One person I profiled in my story is a hardcore Taylor Swift fan of it.

I was going to ask you about this guy.

Swiftologist is his handle, right?

Yeah, Swiftologist.

He's this 20-something guy in Singapore making hugely watched music reviews for a global audience.

And, you know, I've had my issues with the Swifties over the years as, you know, sometimes you need to.

Easy, man.

People are going to yell at us.

Don't even.

Don't even.

There are producers in the shop who are going to yell at me after this interview.

I'm just saying.

Look, we all love her, but I just, you know, sometimes you have to say that one doesn't quite live up to her standards.

And you often hear from fans who don't like to hear honest opinions if you're in this profession.

But he actually is doing some of the sharpest music criticism I've seen on YouTube and TikTok.

It just is kind of like couched in this sort of...

in-joke fan culture lingo, which in a weird way gives him more credibility with his audience because his audience knows that he's talking about pop music and even criticizing her from Place of Love.

So as the culture writer in this conversation,

are you hopeful and optimistic about the future of your chosen career and all of the new possibilities that are out there with all the fractured infrastructure and ecosystem?

Or are you a little leery?

I worry about the written word.

I worry that demand for the written word will just keep falling for the rest of my life.

And I've invested too many years into learning how to write and become a better writer to suddenly make a pivot to podcasting or TikToking.

On the other hand, I am just completely overwhelmed by the number of exciting things there are to write about and just the idea that there's so many conversations happening that people actually really do want to have a smart, thoughtful arbiter to weigh in on.

I think that people often talk about platforms like TikTok as if they're consumed uncritically, as if people are just scrolling.

I think that people are becoming actually pretty savvy consumers, and it's elevating certain critics who seem a little bit more thoughtful about that.

So I think that there is an exciting future for the profession.

It might just involve less reading.

Yeah, less reading, more watching.

It's just going to be different, right?

Or listening to the radio or listening to the radio.

Spencer Cornhaver at The Atlantic.

Spencer, thanks a lot.

I appreciate your time.

Thanks.

This final note on the way out today, just because we've done a couple of stories lately about prediction markets, if you look at the action on polymarket today, 40% of bettors, 4-0%,

think the government shutdown is going to last until at least November the 16th.

That would make it 36 days, the longest on record, if that is a record that Congress and the White House are looking for.

Our daily production team includes Livy Burdett, Andy Corbin, Nicholas Guillong, Maria Hollenhorst, Sarah Leeson, Sean McHenry, and Sophia Terenzia.

I'm Kyle Rizdahl.

We will see you tomorrow, everybody.

This is APM.

I'm Amy Scott, and this week on How We Survive, I'm joined by a very special guest, the Splendid Tables, Francis Lamb.

Francis joins me in the kitchen to cook up something called cultivated chicken, a new meat alternative that's not from an animal, but from chicken cells.

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Listen to How We Survive on your favorite podcast app.