Econ Battle Zone: Budget Showdown

Speaker 1 This message comes from NPR sponsor Charles Schwab. Financial decisions can be tricky.
Your biases can lead you astray. Financial Decoder, an original podcast from Charles Schwab, can help.

Speaker 1 Download the latest episode and subscribe at schwab.com/slash financial decoder.

Speaker 3 This is Planet Money from NPR.

Speaker 4 Last time on Econ Battlezone, Erica emerged victorious.

Speaker 5 I can't believe I won. Anything is possible.

Speaker 6 And was awarded the Econ Battlezone Belt.

Speaker 5 It's a lot of gold. There is a lot of gold on this.

Speaker 4 Today, two new Planet Money reporters enter Econ Battlezone Stadium.

Speaker 7 I'm Kenny from Meadville, Pennsylvania.

Speaker 8 I'm Mary from Richmond, Virginia.

Speaker 4 Ready to do whatever it takes to get their hands on the belt.

Speaker 8 I love shiny things like a raven.

Speaker 7 I would wear that belt for a full month everywhere I went.

Speaker 5 I'm not giving this belt up. This is my belt.

Speaker 10 Welcome to a special episode of Econ Battlezone.

Speaker 4 Today Mary and Kenny come for the champ.

Speaker 4 Let's have today's contestants join us in Econ Battlezone Stadium.

Speaker 4 Erica, Mary, Kenny, the rules are simple. You will each be assigned at random your own Econ challenge question and secret ingredient.

Speaker 4 You will need to answer that question, include your secret ingredient, and delight and inform our judges.

Speaker 8 Since I don't know what we're doing, there's no real way to prepare.

Speaker 7 I'm already panicking about how I haven't spent 24 hours panicking.

Speaker 4 Our country is in the midst of a great debate about the federal budget and the deficit. Should we shrink the size of the federal government?

Speaker 4 Should Congress extend the tax cuts from President Donald Trump's first term?

Speaker 10 Today's econ Challenge questions all have something to do with that budget debate.

Speaker 4 Computer, please shuffle today's questions and today's mystery ingredients.

Speaker 13 Mary, you're first.

Speaker 8 Nice.

Speaker 4 Your question?

Speaker 4 What effect will extending the 2017 tax cuts have on economic growth? And why do different economic models give different answers to that question?

Speaker 2 Okay.

Speaker 4 And now, Computer, what is Mary's mystery ingredient?

Speaker 4 Rhyme. To succeed, your piece must include as much rhyming as possible.
Mary, how are you feeling about your challenge?

Speaker 8 Listen, when you said deficit, I was like, oh, these jokers are knocked out. Like, you better, I am ready for deficit.
I've been living here. And then it was about tax cuts, but I like rhyme.

Speaker 8 I don't often get to make my shows rhyme, so that's exciting.

Speaker 4 All right, let's move on to our next competitor. Computer, what is Kenny's economic challenge question?

Speaker 4 Kenny, your question is, what signs do economists look for to know whether our country's $36 trillion national debt has reached a level where it has begun to hurt the economy?

Speaker 2 Okay, I can do this.

Speaker 7 Mary looks mad. Mary, did you want this one?

Speaker 8 Yeah, this one's a slam tongue for me.

Speaker 2 It's all right. You can have it.

Speaker 7 Now I feel like the stakes are higher. Now I really can't botch this.

Speaker 4 Computer, what will Kenny's challenge be?

Speaker 4 Genre. Kenny, your story must belong to one of the following three genres.

Speaker 4 Science fiction, romantic comedy, or horror.

Speaker 2 Only one. Okay.

Speaker 2 Okay.

Speaker 2 Okay.

Speaker 4 All right, that leads us to our defending champion, Erica Barris. Erica, there is only one challenge remaining and only one mystery ingredient.

Speaker 2 Here we go.

Speaker 9 Computer, Computer, what's she got?

Speaker 4 Erica, your question is about the fight over whether to cut hundreds of billions of dollars in Medicaid funding over the next decade. So, how did we get here?

Speaker 4 What are the three most important events in Medicaid history from its creation in 1965 to the present day?

Speaker 5 Okay.

Speaker 4 And

Speaker 4 Erica, your piece must must contain a musical number. Woo!

Speaker 2 That is great.

Speaker 5 Oh, no, see, that's not the... The dream, Erica.

Speaker 2 That is not the dream.

Speaker 5 Are you kidding me? I hate musicals, and I am tone deaf, and I don't want any part of this.

Speaker 4 Contestants, remember, you have just 48 hours to become experts in the federal budget debate, locate and interview your guests, and explain everything to us in just three minutes.

Speaker 4 Whoever impresses our judges the most will take home the title of Econ Battlezone champion.

Speaker 12 How's that sound?

Speaker 1 It sounds terrifying.

Speaker 7 And Erica, it sounds like you got some musical lessons to take, I'll be honest.

Speaker 4 I'm your host, Keith Romer, and this is Econ Battlezone.

Speaker 5 Can I keep talking about how I feel about this? I don't think it's fair.

Speaker 2 Why do I have to do a musical number?

Speaker 1 This message comes comes from Vanguard. Capturing value in the bond market is not easy.

Speaker 1 That's why Vanguard offers a suite of over 80 institutional quality bond funds, actively managed by a 200-person global team of sector specialists, analysts, and traders.

Speaker 1 They're designed for financial advisors looking to give their clients consistent results year in and year out. See the record at vanguard.com/slash audio.
That's vanguard.com/slash audio.

Speaker 1 All investing is subject to risk. Vanguard Marketing Corporation, distributor.
This message comes from Schwab. Everyone has moments when they could have done better.
Same goes for where you invest.

Speaker 1 Level up and invest smarter with Schwab. Get market insights, education, and human help when you need it.

Speaker 8 This message comes from NPR sponsor Shopify. Start selling with Shopify today.

Speaker 8 Whether you're a garage entrepreneur or IPO ready, Shopify is the only tool you need to start, run, and grow your business without the struggle. Go to shopify.com shopify.com/slash npr.

Speaker 4 Welcome back to Econ Battle Zone.

Speaker 1 I'm joined now by our two guest judges.

Speaker 4 First up is Betsy Stevenson, who teaches economics and public policy at the University of Michigan. Betsy, what can you tell us about the challenge facing our contestants today?

Speaker 4 What's going to separate a good economic answer from a great one?

Speaker 14 Well, these are all kind of meaty economic questions.

Speaker 14 I think in particular, Kenny's question, trying to understand that point at which debt becomes too much, I don't think anybody actually fully knows the answer.

Speaker 4 What about for Mary? What relationship are you looking for in terms of the effect individual tax cuts will have on growth?

Speaker 14 Economic growth, fundamentally and always comes down to innovation. So now we've got to understand how giving people more money somehow spurs innovation in the economy.

Speaker 14 That can be true, but sometimes it's not.

Speaker 4 And then finally for Erica's challenge,

Speaker 4 what's going to be the mark of success for you there?

Speaker 14 What are the three most important events in Medicaid history? Is that important to the well-being of the public? Is that important for debt? Is that important for health care?

Speaker 14 I want to see what she thinks is important and then see if she can make a case for that.

Speaker 4 Our second judge is one of the senior editors of This American Life and a former host of Planet Money, David Kestenbaum. David, what about the special challenges facing our contestants?

Speaker 15 I think the challenge with all of them is like, there's a great cringe danger, you know? Also, that it would distract from the explaining that you're trying to do.

Speaker 15 But also, you know, I want to see if they can do it.

Speaker 4 While our judges awaited the outcome, our contestants were already feeling the pressure, especially the returning champion, Erica.

Speaker 5 I'm pretty sure I have the Medicaid part of this down. The musical number part of this is really tripping me up.

Speaker 4 Erica did not consider herself a musical person.

Speaker 5 I took piano when I was 10, and four weeks in, the teacher told my parents they should just save their money. And that was the end of that experience.

Speaker 4 So she started looking for allies.

Speaker 5 I am sending an email to this country singing economist, and his name is Merle Hazard,

Speaker 5 which, you know, is kind of funny. And he's got all these great songs like, how long will interest rates stay low? It's kind of a shot in the dark.

Speaker 5 I don't know if he's going to respond even, but, you know, you just got to try things.

Speaker 6 Meanwhile, Kenny was also out there trying things.

Speaker 16 So here's what I'm thinking. I throw off Erica and Mary, make sure they're not going to the staff meeting.

Speaker 7 And we should not go to the noon staff meeting, correct?

Speaker 16 And then I'll go to the staff meeting.

Speaker 2 Correct.

Speaker 5 No, I'm not going.

Speaker 1 And use that to brainstorm some ideas.

Speaker 4 He took his question about warning signs that the national debt had grown too large to the Planet Money Zoom meeting.

Speaker 7 Anyone I should talk to about when the national debt triggers a problem?

Speaker 17 Research is all over the map on this, but like you could talk to three economists and you get five opinions on this.

Speaker 17 But like if the economy is doing great and we're like growing a bunch, it doesn't really matter.

Speaker 17 Like it can go up to like a huge percentage of GDP, or like it could be a weight that is suppressing growth.

Speaker 17 And if it keeps growing, then it's siphoning away both government investment and private investment.

Speaker 4 Kenny also had questions about the genre he had chosen for his challenge, romantic comedy.

Speaker 2 On that front, the team was less helpful.

Speaker 7 It almost immediately was like waylaid by a debate over whether Lost in Translation even is a rom-com or not. Wikipedia says it's a rom-com.

Speaker 17 Lost in Translation?

Speaker 5 It's not a com.

Speaker 19 I don't know if it's even very rom.

Speaker 20 It's just

Speaker 17 a rom or a corner.

Speaker 19 Oh my God.

Speaker 7 And I was just like, I don't know what to do.

Speaker 4 Mary began by diving into the substance of her assignment. Why economic models disagree about the effect of extending tax cuts? What have you learned?

Speaker 20 I learned that there are differences in how you can model these things. Like, if you and I both built a model,

Speaker 20 we might differ on how elastic the world is to our changes.

Speaker 20 So for example, I might think that labor is not that responsive to changes in taxes and that people aren't gonna necessarily work a ton more, that that response isn't gonna be huge.

Speaker 20 And you might be like really optimistic about that.

Speaker 4 But it wasn't long before she turned her attention to her mystery ingredient.

Speaker 2 rhyme.

Speaker 5 At the tone, please record your message.

Speaker 8 Hi, this is Mary Child calling. I was just calling with a bit of an odd request.
I have a like a reality show-style challenge.

Speaker 8 I explain an economic concept in three minutes, it has to rhyme, and I was hoping to get help from Run the Jewels. I have a really weird and time-sensitive request for Juicy J.

Speaker 8 I think you are still working with two chains, possibly. I was wondering if Andre 3000 might be available today.
Oh, and it has to be today, which I realize is insane. Okay, thank you so much.
Bye.

Speaker 4 While Mary waited to hear back, Erica Erica had already managed to land a collaborator.

Speaker 5 The guy who's going to be singing with me is a country music singing economist.

Speaker 4 Merle Hazard had agreed to help and to connect Erica with some of his musical friends.

Speaker 5 Well, I just booked a Grammy-winning banjo player

Speaker 5 and an entire Nashville band to

Speaker 5 work with me on this. So I don't know.

Speaker 2 I I don't know.

Speaker 5 I'm in a pretty good place.

Speaker 4 Kenny, on the other hand, was feeling less in control.

Speaker 7 So I think my plan, which has literally developed in the last seven minutes while I was making coffee, is to make a trailer for a rom-com.

Speaker 4 A trailer for a rom-com about the national debt.

Speaker 7 I'm so mortified that what I'm going to present is so bad and dumb.

Speaker 2 Oh, God.

Speaker 4 As the second day of the challenge began, Kenny tried tried to learn how to pull off his plan.

Speaker 1 It's 4:30 in the morning.

Speaker 12 Come with us. If your husband wouldn't mind, she doesn't have a husband.

Speaker 2 I don't have a husband. Come on, let's go.

Speaker 16 Everything's changing.

Speaker 7 We're gonna have boom hit of like awesome pop song from exactly that year.

Speaker 16 So the narrator says lead number one's name, lead number two's name.

Speaker 1 Lee Swithersburn, Mark Ruffalo.

Speaker 16 And there's a little moment from the movie.

Speaker 13 I'm like 99.9% parched here.

Speaker 10 Could really use a cola.

Speaker 13 There's the name of the movie. Just like having.

Speaker 16 And then there's the final little moment from the movie.

Speaker 1 Excuse me, pardon me. What's wrong with him?

Speaker 16 So I think that is how our trailer needs to end.

Speaker 18 Mary's plans also started to take shape, beginning with a call to ari simon at the record label empire the only thing i would say is like we're up against the fact that you need it tomorrow

Speaker 18 um and the fact that like really what you're asking for is like three minutes of someone like rapping continuously about a topic they probably don't know a ton about

Speaker 21 okay but ari did connect mary with someone who was at least willing to give it a shot i'm rex life raj i'm a recording artist out of Berkeley, California. I rap, I sing, and

Speaker 21 everything in between.

Speaker 4 And Mary and Raj got to work trying to bridge the gap between dropping taxes and dropping bars.

Speaker 21 Like, what exactly are we talking about?

Speaker 1 Just how tax cuts affect the economy.

Speaker 22 Yes, how tax cuts affect.

Speaker 20 How tax cuts

Speaker 20 do or don't generate economic growth?

Speaker 7 Mary explained that different models made different predictions about the effects of extending tax cuts on growth and on how little of the lost tax revenue might be made up by that growth.

Speaker 21 And so

Speaker 21 who projected that it would be 6 to 16%?

Speaker 20 So that would be the tax foundation predicted forecast 16% and the tax policy center said 6%.

Speaker 4 In turn, Raj worked with Mary to find a rhyme to explain the importance of factors not included in those economic models.

Speaker 8 Endogeneity, right?

Speaker 10 Endogeneity.

Speaker 20 Doesn't it feel like there's a lot to work with there?

Speaker 21 Yeah, definitely. Nice.
Indogeneity.

Speaker 23 I'm going to put that in my phone.

Speaker 4 Meanwhile, Erica tried to put a country spin on how Medicaid spending had grown over the decades as Congress extended coverage to different groups of people.

Speaker 5 The thing is that the

Speaker 5 big thing in this is the 1972 expansion.

Speaker 4 She and her new band in Nashville met for a writing session and kicked around ideas about how to transmute Medicaid's increasing percentage of federal spending into country music gold.

Speaker 2 My 80 budget share was 2.4, but there were still bigger changes in store.

Speaker 1 Yeah, that's good, John.

Speaker 6 The material was

Speaker 2 not a natural fit.

Speaker 24 So the main thing was that in 91 it was 4% of the budget, but then by 2000 it was 6.6.

Speaker 5 I actually have to say the Wards Affordable Care Act somewhere in there.

Speaker 2 Okay, but I mean, did that pay? The Affordable Care

Speaker 8 Congress Affordable Care Act.

Speaker 2 Yeah.

Speaker 2 Can we try again?

Speaker 4 But by the end of the night, they had the beginnings of a song.

Speaker 2 Like that? Does that sound okay, Erica? That sounds great. Okay.
Really?

Speaker 19 Yeah, it sounds so good. It sounds like a real song.

Speaker 2 Yeah, it is. This will work.

Speaker 4 And then there was Kenny. He had booked an economist he was sure could answer his question about when the size of the national debt starts to hurt the economy.

Speaker 2 Hello, hello. Can you hear me?

Speaker 13 Yeah, yeah, that works.

Speaker 2 Harvard professor Ken Rogoff.

Speaker 22 Now, I have to start out by saying that the whole premise of what you're asking me about,

Speaker 22 there's no answer to.

Speaker 4 Kenny hoped to use the interview as raw material for a charming romantic comedy movie trailer. What was your plan for your interview with Ken Rogoff?

Speaker 7 So I was like, what do I specifically need from Ken? Some kind of physical comedy is good.

Speaker 2 It's good to have a pet.

Speaker 7 And I have a dog that wears diapers. He could walk through the background.

Speaker 2 Like, that might be funny.

Speaker 7 And I came down to this list. I needed the meet cute on tape.
I needed a moment of tension with him on tape. And then I needed a moment of softening/slash reconciliation.

Speaker 7 What's your exposure to romantic comedies?

Speaker 13 My wife watches a lot.

Speaker 2 Uh-huh.

Speaker 2 And how

Speaker 4 well did your plan work out?

Speaker 2 Poorly.

Speaker 7 I would say poorly. Okay, I'm sorry about the this dog is out of control.

Speaker 2 I've lost total control of my house.

Speaker 13 So I feel like we've gone through everything at this point, though.

Speaker 2 Absolutely, Professor. Yep.

Speaker 12 Now I will edit it so that it sounds like Ken Rogoff and I had a delightful interaction.

Speaker 7 It's possible, though, if you ask him, he will be like,

Speaker 7 I talked to this guy at Planet Money, and he must be the dumbest reporter I've ever met in my entire life.

Speaker 4 As the deadline closed in, the contestants worried whether their creations would be ready in time.

Speaker 8 The stakes are high. I'm going to open this file.
If it works, it works. If it doesn't,

Speaker 8 well, I don't know what we'll do.

Speaker 5 Literally, everything that could possibly have gone wrong, technically, went wrong.

Speaker 16 Oh my god, this is so bad. This is so bad.

Speaker 10 I have half an hour. I have half an hour.

Speaker 1 I'm not even close to finishing this.

Speaker 2 I'm so I'm ah

Speaker 2 All right.

Speaker 4 Time is up hands up

Speaker 4 Hands up from your editing software Erica Barris, how are you feeling about your piece?

Speaker 2 Um, I feel like medium medium rare. So I'm gonna call it medium rare right now.

Speaker 4 Mary, how are you feeling about your piece?

Speaker 2 Hmm.

Speaker 8 Well, Keith, if I may pull from one of the greats, there's a certain slant of light, winter afternoons, that oppresses like the heft of cathedral tunes.

Speaker 8 Heavenly hurt it gives us, we can find no scar, but internal difference where the meanings are.

Speaker 4 But, Mary, how do you feel about your piece?

Speaker 8 Oh, sorry. Was that the question? Um,

Speaker 5 decent, you know?

Speaker 4 Kenny, I'm going to go to you next.

Speaker 2 Y'all, it was.

Speaker 2 I haven't heard it.

Speaker 2 So I don't know. It's not good.
I don't know. Not good, man.

Speaker 7 And frankly, I don't know what piece of audio I put in at the end.

Speaker 4 Coming up, the contestants present their stories to our judges. And we all learn who will secure the Econ Battle Zone Belt.

Speaker 1 This message comes from Apollo Global Management, who believes the global industrial renaissance is transforming the world.

Speaker 1 Over the next decade, industries like energy, infrastructure, and technology will need an estimated $75 to $100 trillion to modernize and meet demand. Long-term projects need long-duration capital.

Speaker 1 That's where Apollo steps in. With scale, flexibility, and a focus on growth, they're partnering with companies to drive the future one innovation at a time.

Speaker 1 Learn more at thinkitnew.com slash renaissance. This message comes from LinkedIn Ads.
One of the hardest parts about B2B marketing is reaching the right audience. That's why you need LinkedIn ads.

Speaker 1 You can target your buyers by job title, company, role, seniority, and skills. All the professionals you need to reach in one place.
Get a $250 credit on your next campaign so you can try it yourself.

Speaker 1 Just go to linkedin.com slash nprpod. That's linkedin.com slash nprpod.
Terms and conditions apply. Only on LinkedIn ads.
This message comes from Capital One.

Speaker 1 Say hello to stress-free subscription management.

Speaker 2 Easily track, block, or cancel recurring charges right from the Capital One mobile app.

Speaker 1 Simple as that. Learn more at capitalone.com slash subscriptions.
Terms and conditions apply. This message comes from Kachava.

Speaker 1 Sometimes people stock their fridge with good intentions, only to have their future self sacrifice nutrition for convenience.

Speaker 1 Keep your body and mind nourished with whole body meal shakes from Kachava. It's got 25 grams of protein, 6 grams of fiber, greens, and so much more, but it actually tastes delicious.

Speaker 1 Try one of cachava's indulgent flavors today. Shop now through December 2nd to get 30% off your first purchase of two or more bags.
Go to cachava.com and use code NPR.

Speaker 4 Welcome back to Econ Battlezone. We've assembled our three contestants and our guest judges here in Econ Battle Zone Stadium.
This American Life's David Kestenbaum.

Speaker 2 Hi.

Speaker 4 And from the University of Michigan, Betsy Stevenson.

Speaker 2 Hello.

Speaker 6 Let's get right into it.

Speaker 2 Mary, you're up first.

Speaker 4 What have you brought our judges today?

Speaker 8 Good morning, judges.

Speaker 8 My mission was to investigate what effect a tax cut extension would have on GDP growth and then explain why different economic models might give different answers to that question.

Speaker 8 The economists I talked to said, yes, it could generate some growth, largely by incentivizing lower-income workers to work more hours.

Speaker 8 But everyone agreed it would not be nearly enough to make up the lost future tax revenue.

Speaker 8 For help with my challenge, which was rhyming, I called in some trusted professionals, award-winning children's book author Liz Garton-Scanlon and Planet Money producer extraordinaire James Sneed.

Speaker 8 And then I got help writing and performing from a rapper in Berkeley named Rex Life Raj. And the result of that collaboration is what you're about to hear.

Speaker 3 Yo, what's up? It's Rex Life Raj.

Speaker 8 And I'm Mary Childs. Hello and welcome to Planet Money Raj.
Thanks for helping do the most.

Speaker 3 Today, we're going to try to figure out tax cuts. Will they boost economic growth? The political rhetoric is that it's supposed to help everybody.
So does it?

Speaker 8 We're going to call some experts to try to make sense of it. So first, let's check the data, what the studies show, about if the cuts will help the economy to grow.

Speaker 8 And the good news is from nearly every perspective, they drive a little growth, which is the objective. But that comes from lost revenue.

Speaker 4 Federal cash not coming in.

Speaker 8 The government would have gotten 4 trillion.

Speaker 3 4 trillion of lost revenue when they cut taxes. 6 to 16% gets recouped on the back end.

Speaker 3 That's according to analysis, according to the studies, because people will get to keep a little bit more of their money.

Speaker 3 The way that that's supposed to work is to incentivize, to make workers feel more ambitious and more energized.

Speaker 3 Tax cuts might generate some economic growth, but a lot of people think that's short term at the most.

Speaker 3 The question is: will cuts lead to more boots on the clock or just more executive bonuses and buying back stocks? We asked Kent Smeters at Penn. He said both.

Speaker 25 The problem with that is that we're actually finding, yes, it's not big economic growth. In fact, statistically, it's kind of no different than zero.

Speaker 3 So even if you're looking for it, tax cuts aren't the hero.

Speaker 8 Because cuts help the rich more. The money, they crave it.

Speaker 1 Higher income people get the money, they're going to probably save it.

Speaker 8 Not spending the economy, says economist Benga Ajalori, so it doesn't boost growth as much as it could. That's not this story.

Speaker 3 Let's talk about elasticity, something that we should mention. It's how people or businesses respond to incentives, how flexible we are with our time and our money spending.

Speaker 3 Like, will tax cuts push us into making different decisions?

Speaker 7 Elasticities aren't huge, but it's a big base.

Speaker 3 Eric Zwick at Chicago says that there's a little space for disagreement, for projections to diverge. Who's to say what will stay and what changes will emerge?

Speaker 8 Projections also differ based on how you see the world, how reactive we might be, and how changes get unfurled. The fact that things are complex, there's too much to account for.
No model gets it all.

Speaker 8 There's just stuff they must ignore.

Speaker 3 I have a new word that you could say with me.

Speaker 8 Okay, Raj, what is it?

Speaker 3 Endogeneity.

Speaker 3 When feedback loops start to twist and tighten the bolts and something outside of the model starts messing with the results, They use the lower class as the engine of the economy, making you turn your life force to a commodity.

Speaker 3 Do people work more if the taxes are lower? We gotta see. Will tax cuts make the businesses invest consciously, or will it make the working man work more?

Speaker 3 I just don't know if you're gonna get what you hope for. They say that it'll help the working man earn more.
That just sounds like some rhetoric that we heard before.

Speaker 3 Tax cuts for economic growth feel like a turf war. I just don't know if you gon' get what you hope for.

Speaker 8 Thanks so much, Raj, with rhymes like diamonds glistening. This is NPR.
Thanks for listening.

Speaker 2 Oh my gosh.

Speaker 2 Woo.

Speaker 2 That was out of this world. That was amazing.
Thank you.

Speaker 4 David Kestenbaum, what'd you think?

Speaker 15 Overall, really nice job. Like, I thought, oh, rhyming, that's probably one of the easier ones.
But then when you hear it, like, it twists how you have to write every single sentence.

Speaker 15 It's just really, really challenging.

Speaker 15 And I definitely admired the ingenuity and getting Raj to do that. But I was genuinely interested in unpacking the question in some detail.

Speaker 15 And maybe that's not possible when you're also asked to rhyme.

Speaker 15 But I do think as a reporter, you have to figure out how to balance those things and not try and cover too much ground.

Speaker 4 Thank you, David. And Betsy, how did you feel about the economics of the piece?

Speaker 14 You know, I love it. I actually think it's just so clever.
I mean, I did not see you dropping endogeneity in there. And like some of these phrases, like life force to a commodity, just beautiful.

Speaker 14 and really good economics. The main

Speaker 14 idea is whose behavior is going to be changed. Is it going to be,

Speaker 14 you know, lower income people or higher income people? And by changing their behavior, is it really getting them to work harder or is it just making them richer?

Speaker 4 Thank you, judges. Next, we turn our attention to our second challenger, Kenny.
Kenny, tell us a little bit about what you're presenting today.

Speaker 7 Well, for my assignment, I have made a rom-com movie trailer featuring the indicators Wayland Wong, narrated by NPR Chief Economics Correspondent Scott Horsley.

Speaker 7 And in this, hopefully, you will hear how one economic sign in particular may give us the clearest warning that the national debt is beginning to hurt the U.S. economy.

Speaker 7 I have heard this piece zero times, judges. I didn't have time to listen back.
I think all of the parts are in their places, but I don't know for sure.

Speaker 4 Well, Kenny, let's find out. Go ahead and press play when you're ready.

Speaker 2 Kenny. Happy National Cognac Day.

Speaker 7 Widely believed to have been established by the cognac industry in the United States as a way to spawn some drinks.

Speaker 2 I know.

Speaker 10 Kenny is a down on his luck podcaster.

Speaker 5 Sheesh, is it National Walk with Crutches Day?

Speaker 7 I had hip surgery from a running injury.

Speaker 5 I knew you'd been running away from serious stories, Kenny, but this is ridiculous.

Speaker 10 Ken F is a famous Ivy League economist.

Speaker 11 Harvard professor and former IMF chief economist is out with a new book today. I'm Ken Rogoff.
Good to have you all.

Speaker 23 Good to see you. Two cans, one world apart.

Speaker 10 Until one day.

Speaker 4 Welcome to Econ Battlezone.

Speaker 23 One assignment.

Speaker 4 Kenny, your topic is national debt.

Speaker 10 Would change everything.

Speaker 16 Dear Professor Rogoff, interview request.

Speaker 16 Urgent interview request.

Speaker 5 Ken Rogoff said yes?

Speaker 7 This is my chance to do something serious.

Speaker 5 Please don't turn this into national, national debt day.

Speaker 2 Oh, that's not bad at all.

Speaker 5 Oh, Kenny, back away from the calendar.

Speaker 23 What happens?

Speaker 7 Look at my crutches in place here.

Speaker 2 Okay, that's.

Speaker 23 When kens collide.

Speaker 7 We have a shared experience here.

Speaker 12 You're a Kenneth.

Speaker 12 My name is also Kenneth.

Speaker 7 Did you get, like, I guess to get teased, Ken Barbie, Kenny G?

Speaker 13 No, no, because it wasn't so common in

Speaker 13 my era. Anyway, let's move on to.
But yeah.

Speaker 10 Can two kens teach something to all of us? Specifically, teach us what indicators do economists look to for whether the national debt is harming the economy?

Speaker 13 The big thing would be interest rates start. going up.
If the markets are already pressuring you because they're nervous about how much you're you're borrowing

Speaker 13 and they see you have a very cavalier attitude towards it. They'll say, fine, I'll keep lending to you, but instead of just 1%, how about 1.5%

Speaker 13 more that you're going to have to pay? And

Speaker 13 so that's when you get stuck in one of these cycles.

Speaker 10 From Peabody Award-winning Planet Money.

Speaker 7 I mean, he says you only need to look at interest rates.

Speaker 1 Comes a story.

Speaker 5 Interest rates affect everything, Kenny.

Speaker 10 About the interest we owe on our debts.

Speaker 13 When interest interest rates go up, they've gone up on everything, on home mortgages, on car loans, on student loans. And the national debt plays a large role in that.

Speaker 10 And the debts we owe to the people who interest us.

Speaker 8 You can't spell Kenny without Ken.

Speaker 10 Kenny Malone, Ken Rogoff, and the indicators, Waylon Wong, coming this summer in nationally indebted to you.

Speaker 5 How bad could it be? It's not like your dog walked in and knocked your crutches on your head. Hmm.

Speaker 2 Once my dog he's 80 80 my and the all right and the crutches have fallen that was beautiful that was unbelievable the debts we owe to those who interest us i can't let's uh let's go ahead and turn to our judges uh david kestenbaum

Speaker 15 what'd you make of that uh i found that very enjoyable the presentation of it i enjoyed the classic uh planet money of trying something funny with the uh important smart person ken rogoff who is not there for it

Speaker 15 so I thought like presentationally it was excellent I thought content wise I realized I had lots of questions and I really wanted to dig into it and I just felt like I was just getting started so yeah that's all in the movie the full movie

Speaker 15 anyway given the complications of the assignment very nicely done

Speaker 4 And Betsy, what did you make of the economics in the piece?

Speaker 14 Well, I just want to say that it was very, very funny, an enjoyable piece probably the most important concept is what you covered the idea that the interest rate can go up there are though a lot of other aspects um

Speaker 14 we we care a lot about what's the return on the investment we're making so are we borrowing for an investment or are we borrowing for consumption if we're investing in

Speaker 14 you know, critical minerals so that our

Speaker 14 auto industry and our computer industry and our AI industry can grow, then we're basically economic growth is going to stay ahead of the debt. And it was that idea that was missing in the piece.

Speaker 14 If your goal was to answer the question of

Speaker 14 when should we become concerned about the size of the debt, what's the tipping point? The tipping point is when the debt is growing faster than the economy.

Speaker 7 Thank you. Thank you, judges.

Speaker 4 All right. We've got one contestant left, our returning champion, Erica Barris.

Speaker 2 Erica, what'd you bring us today?

Speaker 5 Okay, my assignment was to select the three most important moments in Medicaid funding from its creation in 1965 to today.

Speaker 5 I picked several inflection points when the program expanded who could be covered. So in 1966, just 2% of the population was covered by Medicaid.
Today, it's 21%.

Speaker 5 To explain how that happened, I wrote lyrics for a song, and then I had to find someone to make that song a reality.

Speaker 5 I found this country singer economist, his name's Merle Hazard.

Speaker 2 He helped me put together a whole band called EB and the Entitlements.

Speaker 5 The band is Matt, Gary, Tristan, my new good friend, Allison Brown, who is a Grammy Award-winning banjo player. And they helped me

Speaker 5 write the music. They helped me tweak some of the lyrics and put this whole thing together.

Speaker 5 And then I sang the song, even though I cannot sing. And it is called the Medicaid song.
And here it is.

Speaker 2 Here's a little number about all the numbers relating to Medicaid.

Speaker 5 It all started in 1965 when the government said health insurance, you need it to stay alive.

Speaker 2 So Congress, they passed a bill.

Speaker 5 Some money from the feds, but managed by the states. Low-income Americans got preventative care on their plates.
It was an entitlement program, if you will.

Speaker 5 By 1970, Medicaid was 1.4% of the budget through a funding formula that covered people from LA to Nantucket. And the first big change, coverage for more people with disabilities in 72.

Speaker 5 By 1980, 1.4 was 2.4, but there were still bigger changes in store. Through the decade, the economy slowed, but healthcare grew.

Speaker 2 How did we get here?

Speaker 2 How did Medicaid grow?

Speaker 2 What happened when?

Speaker 2 And where did we go? Where does the money flow?

Speaker 5 By the 90s, Medicaid had grown in all kinds of ways. Long-term care and women and kids no longer had to pay.

Speaker 5 In 91, Medicaid spending was 4% of the budget, but with the new change, more services were added to the bucket.

Speaker 5 In 96, welfare reform made it so cash assistance wasn't tied to Medicaid eligibility. What that did was expand the pool of people and gave some folks more flexibility.

Speaker 5 Then CHIP expanded Medicaid for kids, and by the year 2000, federal spending was 6.6.

Speaker 2 How do we get here?

Speaker 2 How did Medicaid grow?

Speaker 2 What happened when?

Speaker 2 And where where does the money flow?

Speaker 2 Take it, Allison.

Speaker 5 And now we arrive at our third big change. It was back in 2010 when Congress enacted the ACA.
The Affordable Care Act expanded Medicaid.

Speaker 5 The federal government offered a 90% match, but just for states that expanded coverage, match, and set up one more way in which states get paid.

Speaker 5 Now, 9% of the budget budget goes to Medicaid each year, nearly $900 billion, if you want to be clear. A fifth of us use Medicaid according to reportage.

Speaker 5 Under the current proposal, hundreds of billions of dollars would be cut to maybe fill a budgetary gap. But it would leave 8 million people without health care coverage.

Speaker 2 How do we get here?

Speaker 2 How did Medicaid grow?

Speaker 2 What happened when?

Speaker 2 And where? Oh, where? Oh, where? Oh, where?

Speaker 2 Does the money flow?

Speaker 2 Okay.

Speaker 2 Incredible. Oh, Erica.

Speaker 7 Fantastic.

Speaker 8 Grammy award-winning. Future Grammy award-winning.

Speaker 4 David, let's start with you. What did you make of it?

Speaker 15 That was very enjoyable to listen to. Nicely done.
There's just something nice to hear. about hearing the human voice.
You know what I mean? You took advantage of the medium nicely.

Speaker 15 And I enjoyed your Bob Dylan-ish

Speaker 2 delivery. Yes.

Speaker 4 And Betsy, let's turn to you. What did you make of the economics of this piece?

Speaker 14 Erica, you were asked

Speaker 14 what was important. And what you said was, how did it grow? And that's your refrain in the song.
I love it. And I think you did.

Speaker 14 identify some of the big policy changes that led to the expansion of Medicaid. I mean, the ACA is the biggest expansion of Medicaid.

Speaker 14 And I think a lot of people people don't realize that the CHIP expanding Medicaid to children was also a really important part of that.

Speaker 14 So I thought you identified some of the real key aspects of how it grew. And I tell you, I love the song.
I'm really glad that you jumped right into it and you smashed it with the singing.

Speaker 2 Thank you, judges. Great job.

Speaker 13 So.

Speaker 4 Who will our judges choose to be the next Econ Battle Zone champion? Will it be Mary and her tax cut wrap, Kenny's rom-com take on the national debt, or Erica's Medicaid country song?

Speaker 4 Mary, Kenny, Erica, you were each tasked with teaching us about one piece of the debate about the federal budget and delighting us in the process. And all three of you should hold your heads high.

Speaker 4 I will say this is the closest any Econ Battle Zone vote has ever been.

Speaker 13 But

Speaker 4 there is only one Econ Battle Zone belt,

Speaker 4 so there can be only one winner.

Speaker 9 David, Betsy,

Speaker 4 who's taken home the belt?

Speaker 15 Can I just say how hard it was before I say?

Speaker 14 If we were a jury,

Speaker 7 we'd be there for days.

Speaker 15 They're all so impressive. They're all just so impressive.
Mary, yours was really great and covered so much ground in so much depth in such a clever way.

Speaker 15 And then Erica, like, so lovely to hear you sing and go through the history of it. But Kenny, I thought, you know, of all of them, like, you narrowed the scope in a way that was useful.

Speaker 15 You know, you picked one simple thing you were to convey and you did that in a package that was enjoyable, which I think is in the great, you know, traditions of Planet Money.

Speaker 15 Kenny, the belt is yours.

Speaker 2 What?

Speaker 4 Oh my, I'm genuinely stunned.

Speaker 7 Thank you so much. This is one of the greatest achievements of my professional life.
To win this in front of Betsy,

Speaker 7 in front of whom I was worried about falling on my face intellectually, which I feel like I did a little bit still, nonetheless, but that's okay.

Speaker 7 I feel like this justifies everything. Thank you so much.

Speaker 4 Kenny Malone, congratulations.

Speaker 2 You

Speaker 4 are the Econ Battle Zone champion.

Speaker 10 And this is your belt.

Speaker 7 It's so big. It's so shiny.

Speaker 7 It's so big and shiny. I don't have any words.

Speaker 4 Will Kenny get to hold on to his big, shiny Econ Battle Zone belt, or will a new contender walk away victorious? Find out on the next Econ Battle Zone.

Speaker 4 Got a topic for the next Econ Battlezone? You can email us, planetmoney at npr.org. And if you want to see Kenny with his Econ Battlezone belt, keep an eye on our Instagram feed at PlanetMoney.

Speaker 4 The great James Sneed produced this episode of Planet Money. The show was edited by Jess Jang, engineered by Sina Lafredo with an assist from Jimmy Keeley, and fact-checked by Sierra Juarez.

Speaker 4 Alex Goldmark is our executive producer.

Speaker 4 Special thanks today to Robin Rudowitz and Sarah Rosenbaum, and to Erica's backing band, The Entitlements, John Shane, also known as Merle Hazard, Allison Brown, Matt Coles, Gary West, and Tristan Scroggins.

Speaker 2 I'm Keith Romer.

Speaker 4 This is NPR.

Speaker 12 Thanks for listening.

Speaker 1 Support for NPR and the following message come from Edward Jones. A rich life isn't always a straight line.
Unexpected turns can bring new possibilities.

Speaker 1 With 100 years of experience navigating ups and downs, Edward Jones can help guide you. Let's find your rich together.
Edward Jones, member SIPC.

Speaker 1 This message comes from the International Rescue Committee. Co-founded with help from Albert Einstein, the IRC has been providing humanitarian aid for more than 90 years.

Speaker 1 The IRC helps refugees whose lives are disrupted by conflict and disaster, supporting recovery efforts and responding within 72 hours of crisis. Donate today by visiting rescue.org/slash rebuild.

Speaker 8 This message comes from BetterHelp. BetterHelp is making it easy to reach out and find support with its therapist match commitment.

Speaker 8 Go to betterhelp.com/slash npr for 10% off your first month of online therapy.