Hello and welcome to The Download. I'm your host, Dave Richardson, and it is Jobs Friday with Canada's hardest working economist, Eric Lascelles. Eric, welcome back.

Thanks so much. Good to be here. It's busy times again in the economic landscape, as I'm sure you've noticed.

Yeah, except that I went to all my favorite websites to find out about all the latest announcements of economic data, all the stuff that we love and that you really love. And all I see is stuff about Elon Musk and Donald Trump breaking up. It seems to be dominating the headlines this morning. You did hear about the big feud that I have with Stu Kedwell now from Stu’s days.

I had not heard that. Is this an opportunity to muscle in on this relationship? I'm feeling good about it.

Exactly. Yes. Stu’s days, we had to cancel it this week. It's a big feud Stu and I are having. Hopefully we can patch it up, although he's refusing to call me. I think because he's on vacation, but maybe I'm making too much out of it.

Now, I must confess, I'm hoping that this friction we're hearing on the US political side maybe distracts from tariffs and we don't get too many more. So that that would be the silver lining to me from all of that. I'm not sure if there's a silver lining from your friction, so maybe you better get that patched up.

Yeah, but the Musk-Trump thing is interesting. I mean, it's had an added impact on the Tesla stock to some extent, but broader economic implications, not necessarily there. But we did have our jobs reports out of both the US and Canada. I'm not sure where you want to start this morning because both have a little bit of significance. I'd say maybe even the Canadian one might have a little bit more to it because we hit a new level of unemployment in Canada. We just flashed another number up on the front end. So maybe we'll start in Canada.

That sounds just fine. Absolutely. And so it's mixed. I guess maybe the takeaway is what you just said, which is the unemployment rate is now 7.0%, and so that's only a 10th higher than where we were. But nevertheless, big round new number. And you could argue that a normal unemployment rate in Canada was maybe low 6s or 6% or something, and now we're definitely not 6 something. So there is some real slack here. And again, maybe that is just the main takeaway. I would note that if you were to pay any attention to the job creation side, it wasn't too bad. I mean, 9,000 jobs created would certainly be nothing to write home about in the context of the last few years, but with less immigration, it's not a horrible headline number. It did beat the consensus. Do note that this was for the month of May. In the month of April, there was several tens of thousands of election-related hiring that occurred. And so actually this plus 9,000 was despite minus 30,000 election workers in that month. And indeed, you then dig in and say, what was private sector employment, which would exclude election workers among other groups, and it was up 61,000. That's the strongest in two years. What was full-time? It was up 58,000. I would say a mixed interpretation, even though the unemployment rate when push came to shove is up a little bit. There's definitely some slack. Maybe on the margin, this is a small tick in the «yes, the Bank of Canada cuts in July» thesis. Of course, they didn't cut this week as we're recording this. But it wasn't purely negative. We did see, unfortunately—and this would be maybe the most visible tariff type impact—that manufacturing employment was down for a fourth straight month. Let the record show, going back decades, really across the developed world, it's not a growth. You're not generally seeing steady hiring. But nevertheless, manufacturing down for a fourth month and seemingly linked to tariffs and anticipation thereof and uncertainty around them. Indeed, I would say in general, the goods side wasn't quite as impressive as the service side. There's my takeaway. Again, unemployment at 7%, which we don't love. We've been working with very loose assumptions, given all the different ways this could go on the tariff front. But if we end up roughly where we're expecting to go, we've penciled in an increase in Canada's unemployment rate of about a percentage point or a bit more. I guess the debate is from where, and I'm not sure I have that quite precisely articulated, but from the mid-sixes. It wouldn't shock us if we did work our way into the mid-sevens or even a bit beyond that, but so much depends on what tariffs do and don't ultimately apply.

I get a bit of a skewed view because I've got an 18 and a 21-year-old here at home, and their friends are coming by the house. And so I see a lot of—I still call them kids—but young adults in that age range. And they're finding the job market a little bit harder this summer. I was out with some University graduates as well this week, at a couple of things I was doing, and they're finding the job market a little bit more challenging than certainly what we saw coming out of COVID, where people were in demand. So that's a little bit of anecdotal. But I guess when you start to see the Bank of Canada cutting rates to the extent that they have—and maybe we'll even touch on the pause this week or decision to not lower rates any further—but when the Bank of Canada is cutting rates, the Fed starts cutting rates, you'd like to see that winding through and actually helping the economy. And again, it's a mixed picture, as you say, but we'd really like to see those jobs numbers starting to pick up a little bit more just to give a sign that we're starting to head in the right direction, that we've bottomed out with respect to the Canadian economy. Or am I overrating looking at the month to month? I'm thinking of the last six months even that haven't been as strong as we'd like to see them.

You're quite right. So all sorts of things to unpack there, Dave, and remind me if I miss these comments you've made. I mean, it should be noted, the youth unemployment rate is, of course, significantly higher than the national average. It's sitting at 14%. So that's a more challenging position for sure. You can see me typing things along here. You happen to live in Ontario. I know many of our viewers are at all sorts of places, but we're both in Ontario. And so the Ontario unemployment rate is higher than the national average. It's 7.9%. So you start to tack that on and you can absolutely walk away with Ontario youth are probably facing a 15 or 16% unemployment rate if I had those numbers at my fingertips. Certainly that is fair. It's not a perfect job environment at all. As you say, when we go back a little bit, we had been sitting on a pretty soft sequence of the prior three months of hiring. Indeed, we'd seen a notable drop and then a couple of flat months. Then this month isn't really that different than another flat month when you think about it. Really, since tariff anxiety struck and policy uncertainty went high. Canadian businesses, and the Canadian economy, at least, has been sitting on its hands in a significant way. There is some real issues there. That's the thing, I must confess, and maybe I can loop it into the bank of Canada if I play my cards right at the end of this comment, but the thing that's perplexing in Canada is around most of the world, including in the US, we're seeing actually surprisingly little economic damage from tariffs so far. In Canada, I would say if anything, we're maybe seeing surprisingly high damage from tariffs. If you're surprised that I'm saying surprisingly high, just keep in mind, of course, Canada doesn't have that many big tariffs on them at this point in time. Of course, auto, steel, aluminum, those sectors are very profoundly impacted. What do you know, one or two of those are Ontario-centric to pull it back to a regional perspective. Ontario has got a lot of aluminum, and maybe other provinces much less so. But it's actually surprising the extent to which we've seen a clear deceleration in this economy in light of the fact that the average tariff rate is only about 4% in terms of Canada being hit, and that's a lot lower than a lot of countries. We're in the opposite boat. This is actually hurting more than it theoretically should hurt. I can't claim to have a clear and concise answer to why, but that's a weird one we're trying to sort through. In terms of what the Bank of Canada then did. And so, not much hiring for four months. They only knew about three of those as the record show, but nevertheless, not much hiring for four months. On top of that, of course, the danger and damage of tariffs and economic slack that already exists, you might have thought, slam dunk, a rate cut. Of course, they didn't deliver a rate cut this time. Part of the answer is they have done quite a bit of cutting before, and they are already in, I would say, a slightly stimulative position in terms of that 2.75% overnight rate. But a fair chunk of it is just that there's a lot of unknowns in terms of actually where this goes in terms of what tariffs do or don't land, and for that matter, how much damage does a tariff do. No one's really got a precise answer to that either, as much as we like to pretend that we do. Then there's this other tricky thing. You've got this mystery of the economy is weaker than I would have thought it would be in Canada right now. Conversely, inflation is higher than I would have thought it would be, and it's also really not tariff-based so far. That's not the thing that's made Canadian inflation harder. The Bank of Canada statement did allude to that being a bit mysterious as well. It was my reading. We're left with, is that a one-off in the April inflation data? I should say, if you're getting confused because we're all celebrating that the gas pumps are cheaper, keep in mind we're looking through that carbon tax removal. That's a policy decision. It doesn't speak to the general inflation pressures. We're looking at inflation, ex-carbon taxes. That was actually quite hot in the month of April. Some of the real-time indices we're looking at for May are a bit hot, too. I wish I had more clear answers for «this is happening because of that». A couple of mysterious things going on, but I think the inflation side probably made the Bank of Canada better wait and get better clarity on this. Waiting one meeting actually gives them a lot more information. It gives them two more job months. We just got one of them. We're going to get another one, of course, published in early July. Their decision isn't until late July. We're going to get another couple of inflation prints as well, which are going to be really useful. I think they just think we're going to be in a much better position in late July to do something. I would bet right now that they will probably cut rates at that point in time, just given what we're seeing right now.

Well, as you say all of that, it just gets me thinking of maybe something that might help our listeners understand economics and how we think about economics and how emotions and our own decision-making spills through the economy. I mean, economics, for lack of a better term, and I'm sure you'll give me a better definition than I'm about to give you, but for me, economics is just we're all trying to optimize or make the most out of the resources that we have. And economics really measures and tells us how we do that and help. And some of that is decision making. We can evaluate the decision making that we have around the basic inputs or things that the information that we have and all of us making all of those billions and billions of decisions every single second of every single day is what makes an economy. And you say, again, if we think about the front end of the tariff, Canada was hit hardest first. It was Canada and Mexico. We certainly saw an unprecedented rise in patriotism, nationalism across Canada, an anger at the core of what happened. We saw an election swing from very clearly looking to go one way all the way back to the incumbent party winning, largely driven by the tariff announcement. Canadians, and emotionally, the emotions of the tariffs? And can this happen across a country economically? Have the way Canadians have reacted emotionally, even at the business leadership end and small businesses, can that actually filter through and hurt an economy more than the actual imposition of tariffs? Actually, have that effect?

I think it can have a pretty big effect, potentially. Yeah, that's right. I mean, one way you would think of it is that we do see real evidence of boycotting, as an example. This would be, really, as you're making a spending decision that is not connected to: is this the cheapest product for my money? It's this other channel that's entirely psychological and viewpoint based. We can see evidence of that in some of the travel data in particular. It's a bit blurrier, and I'm not privy to the granular corporate level data that might reveal the extent to which people are preferring one ketchup over another or whatever that happens to be. But yet it is real. Then just more generally, maybe abstracting away from tariffs and even away from Canada, sentiment does have an effect on activity. It is an imprecise effect, and often it's smaller than you would first think. Do note that, for instance, almost around the world right now, you have a lot of soft indicators, meaning survey metrics and expectations metrics and confidence metrics that are really weak. Then actually, in a lot of places, the hard data, the actual how much money you're spending still looks perfectly fine. So these are not the same thing. But there is still some signal, some informational value from how people are feeling. I would say, as you suggested, though, that sentiment is maybe fiercer and stronger in Canada than in a lot of places, the feeling of betrayal and, of course, just the connection to the US. I think that's part of the story, and that's probably one of the better theories for why the Canadian economy is suffering more damage. Again, the idea here being that Canadians might be shifting their spending and buying more Canadian things or buying more non-US things, but they're probably also just buying fewer things in general. Then, of course, just the policy uncertainty is quite high. It doesn't feel like a moment to make a big spending decision, whether you're buying a house as an individual or whether you're deciding on where that next factory goes. Those decisions just get punted down the road and there's an economic hole that results.

Yeah, it's a feeling of uncertainty and just, as you say, sit on your hands a little bit more than you might otherwise. It just seems Canadians have reacted. I'm not suggesting in any way it was not justifiably, but at the same time, it seems to be trickling into the decisions that Canadians are making economically, and that has to have an impact. So it's interesting. It just triggered as you were walking through all the numbers in Canada that are a little bit weaker than they probably should be given the backdrop. Now, let's just get a little positive on the Canadian economy. The Canadian stock market has been relatively strong. That's a forward-looking indicator for later. And as well, I bumped into a couple of real estate professionals that I know over the last few days, and they say that the housing market has been showing some signs of life in different parts of the country through the month of May. We had some optimism in January, crushed by the tariffs and now, again, some green shoots in the housing market in May. I'm sure you're seeing some things that say that they may be down the road, especially if we get a little bit lower interest rates, the Canadian economy is poised to do better.

I think that's quite right. As much as I suggested otherwise a moment ago, I am seeing some evidence of housing having picked up in May over April. Now, it's still well down from last May. Of course, it normally picks up in the spring and all the gardens look beautiful right now and everyone feels pretty good about themselves. It's not a bad time to make a big spending decision purely through that lens. I would say still some restraint, but it is up from where it was a few months ago. That's for sure. Then yet to your point, it's a tricky one just in the sense that if we look for direct tariff effects, and that would be, oh, prices are higher because of tariffs, and now I'm poorer, now I'm spending less. We're still waiting on that. That's supposed to be the main channel. We're seeing all these uncertainty and confidence type effects that are happening so far, but we're waiting on the actual direct drive from tariffs into behavior. I guess we are seeing some layoffs at some sectors that are trying to supply the US, so I shouldn't downplay that, but we're still waiting on one of the big direct channels. I'll admit, we have pushed back some of the damage to the second half of this year, I guess, out of necessity. We're almost in the second half of this year at this point. Q3 and Q4 is where we think we might see a bit more damage. So not to get too optimistic on the immediate future for growth. But I will say when I look at Canada a bit more broadly, it does feel like there is scope for improvements over the next several years at a minimum. And setting partisanship aside, it does look as though there's a pro-growth agenda at the federal level in terms of infrastructure and making it easier to do resource projects and some pretty modest tax cuts and some pretty significant fiscal stimulus/borrowing, which my fiscal hat says I don't love, but my economic hat says this will make the economy move faster. I think that there are some things to like and feel optimistic about over the next couple of years. That's for sure. We do need to square away all the tariffs to start with. But the main story, again, for the moment is Canada—and I guess you could say Mexico—have dodged a few bullets here and are sitting at a significantly lower tariff rate than we had all feared as of March and much of April. The story is not over, and we just saw steel aluminum tariffs go up to 50%. That hits Canada square on the chin for sure. We're waiting on the USMCA renegotiations, and we'll see what forestry, copper, pharmaceutical tariffs do or don't bring, and those will all have some glancing blow or worse for Canada. But it's still the case that Canada is doing better in terms of the theoretical tariff effect than we had feared a few months ago.

Yeah. Again, I was out with a lot of business owners over the last few weeks, they don't know what to do. It's just a very difficult situation. But I will say that we continue to look back to when we started talking about tariffs with you, that the feeling was autos, steel, aluminum, lumber, some areas of agriculture. That's where the longer-term challenges were going to be produced by tariff policy. And that's beginning to look or has been for a while looking to be fairly accurate if we're looking at the Canadian economy. So Eric, before we finish off, we should go to the big jobs report in the US, because the US is still the world's largest economy and most important economy and interest rate policy and what's happening on a number of fronts in the US has a huge impact around the world and particularly relating to Canada. But consumer confidence is moving up a little bit. We've got polls around whether the US is moving in the right direction, relative to where it's been. So whereas you've got that anger and some pessimism in Canada, it seems to be a little bit more optimism in the US. But the jobs number, I guess, was okay if we look at the report this time.

The market seems to be celebrating it, and I've seen risk assets broadly off and yields higher and things. It was mixed, though, I think. Maybe the big story, again, is the unemployment rate, which was unchanged at 4.2%, which is a fairly handsome number, and of course, no different than it was a month ago. That's maybe the main takeaway, and that's probably something you can view, and I think the market is viewing it positively in significant part because, of course, the fear is that you're going to start to see this erosion in the labor market. We have seen, I should say, weekly jobless claims ticking a little higher in recent weeks. I do think we're seeing some slight deceleration there, but nothing too profound here. The actual headline job creation of 139,000, that was actually a little ahead of consensus. I guess if you wanted to poke holes, you would say there were some negative revisions, so minus 95,000 to earlier months. That does eat through, if you wanted to think of it this way, a fair chunk of the job creation we just got announced. We're not too much further ahead than we were before. They did note that retail employment was down for a third month, so there might be a tariff effect there. That's where Americans are feeling more cautious in general, and at some point perhaps starting to see slightly higher prices as well. We are hearing from some of the big retail dollars out there that they cannot hold back any longer, and so we're getting little signs that we're going to see a bit more of that. If you really wanted to feel negative about it—and I think this is probably not the right way to go—but that other survey, the household survey, the civilian employment number was down 696,000 jobs, Dave. So if you want to run with an apocalyptic headline, that would be the one you would run with. It is so famously volatile and bumpy, though, that I think we're probably best to focus on, it looks like we got okay job creation. It looks like the unemployment rate was roughly flat. The US economy is still alive for the moment. As you say, we've actually, after a big drop, it should be noted, but we've seen some of the survey and confidence metrics actually rebounding a little bit. I'm still budgeting for some actual economic softness over the second half of this year. I would guess this unemployment rate goes up, not down, just in terms you're pleasantly surprising us in terms of how this US to me, is still looking surprisingly ordinary for the moment.

Yeah. Now, some of the forecasts for second quarter GDP coming out of the Atlanta Fed, I believe, is that branch of the US Federal Reserve puts out their growth forecast, and it may even kiss 5% by the time we get out. And we talked about this on previous podcast. By the way, if you want to listen to Eric's previous appearances on the podcast, just subscribe wherever you get your podcast. We're on YouTube now, as you can probably see. Unfortunately, except for our parents and kids. But if you want to subscribe, click «like», give us a five-star review. We would love that. And of course, Eric is RBC Global Asset Management's chief economist, and as I call him, the hardest working economist in Canada. But this GDP or potential high GDP number in the second quarter, similar to the low GDP number in the first quarter, is a little bit more about mathematics than actual decrease or surge in economic.

Yeah, that's exactly right. I'm on the Atlanta Fed's GDPNow web page, which anyone else can go to as well, by the way. We built our own now casting GDP models for the US. They're just not as good as the Atlanta feds. No one can seem to do better than that. The New York Fed made one. I remember a couple of years ago, and in theory, it was better. It seemed more theoretically sound. We all said, well, that's our new one. Then it did so much worse. We're all still leaning on the Atlanta Fed’s GDPNow, just to get what the current quarter GDP is tracking. They do a nice job of incorporating. Now, they haven't incorporated the payroll number yet, so I'm guessing the forecast goes up, not down on that basis, but it was sitting at a 3.8% as of yesterday when they last ran the model, which, as you say, for Q2, GDP would be a pretty enormous annualized gain. It would certainly seem to contradict any thought that there's some pain from tariffs, but it does need to be viewed, as you were alluding to, in the context of the prior quarter, which was down. So Q1 GDP was actually slightly negative, and both are lying to us, I think. And one is the ying to the other's yang, I guess you could say. And so the weakness that we saw in Q1 was the American perspective on front loading. And so that is to say that there were lots of imports into the US as businesses tried to get those products before big tariffs came on. Just mathematically, imports are a negative for GDP. As that story then reversed in the second quarter, we are now tracking a really helpful contribution from trade as imports plummet. Again, I'm sure a little bit related to the tariffs, but a lot related to just it was unnaturally high before that. The more useful way to think about this is you had a quarter that was 0%, you're going to have a quarter that's 4%. What does that average? About 2%. How does that look versus normal? That's about normal. I would say the first half of this year, as much as there have been real twists and turns, has tracked a pretty pedestrian-looking rate of economic growth. We're budgeting for less over the second half of this year and maybe some more meager quarters of growth, but still quarters of growth in the second half of the year. As we've said before, the risk of recession isn't trivial, but it is notably below 50%. We've got it at about a 30% chance. And as they see numbers like this come out and as we see surprisingly small visible impact from tariffs, which have now been around in some cases since mid-March or so, it makes you think that maybe the risk is even shrinking a little bit below that.

Yeah. Well, you know what? I'm going to have to tell my wife that on the GDP now because we monitor the kids' web surfing. She was worried about they're both downloading on this GDP website. So if your kids are looking at that, know that they're into some economic. Like Eric Lascelles and I are always looking up economic websites. Eric, let's just finish off with the big, beautiful bill and everything related to that. Is that going to ultimately be a good thing for the economy or a bad thing, maybe short, medium, long term?

I think that's probably exactly the way to think about it, because first of all, most of that bill, if it passes, so it's through the House, it needs to get passed in the Senate. If they make changes, the House has to say, okay. So there's still some procedural steps here, but it does seem as though something approximating this probably does make its way through. I think they have aspirations symbolically assigning it by the fourth of July. They do need to get something done, though, by mid-August because that's when the debt ceiling becomes a problem. This bill includes a provision that would deal with that debt ceiling constraint. I think fairly likely this does make its way through in some form. I guess short term, meaning really 2026—because the big part of this bill is some tax cuts, and the tax cuts really continue existing tax policy beyond December 31st, 2025, it starts to become then relevant as a new entity significantly in—we do have a significant economic boost to 2026 for the US. There's still a bit of a tariff drag. There are all sorts of things going on. It's not necessarily a banner year for growth, but it should be a significantly improved year for growth in 2026 versus 2025, in part because the tariff burden fades a bit, in part because there is genuinely just tax cuts and a positive fiscal impulse of some significance that emerges from that, possibly an impulse even of about a percentage point of GDP, which is a pretty big amount. That's the short-term story. We'll talk about the foreign perspective in a moment, if we can, which is this threat of higher taxes for some other countries, including Canada. So let's put a pin in that for the moment. In terms of the medium or long run, though, I guess the concern is the fiscal effect. This idea that the deficit is already really big, and this makes the deficit even bigger, and public debt load is quite big as well. This just makes the fiscal position even less desirable and perhaps even less sustainable. We have a fiscal health index you might be familiar with, and we try to rank which countries are the most challenging fiscal trajectories ahead and which are looking okay. Canada is looking not too bad, believe it or not, though, of course, there’s a deficit plan now. The US, though, is number one in our latest list, so it has the most challenging position, and here they are planning, and the estimates vary, but essentially planning on borrowing an additional 2 to 5 trillion additional dollars over the next decade to fund this. Let the record show they did do some spending cuts to partially pay for the tax cuts. Now, that in itself is a kettle of fish, and there's some Medicaid cuts and some other cuts that, of course, that have their own sets of consequences. Let the record show that, of course, tariff revenue can pay for a chunk of this as well, though it doesn't look like the tariff revenue can pay for all of this. It is a net deficit thing. That is concerning to an extent. Of course, I think it's not a coincidence that the US dollar has been generally weakening a bit, and it's not a coincidence that longer-dated bond yields are a bit more expensive than you might have otherwise expected, and term premiums are bigger and so on, just because the risk, while low, is not completely zero, and bond investors aren't as keen to hold some of this long dated debt, just given we're not really seeing much fiscal discipline. And so that's the main story. And then there's this international angle, which is section 899, if I've got my numbers right here, which is basically a proposal that the US will essentially increase taxes on foreign investors via withholding tax on dividend and interest income and on foreign businesses with US subsidiaries if foreign countries don't get rid of what are being described as discriminatory taxes against the US. And one of those taxes that the US doesn't like is the digital services tax. That would be the one that hits the social media networks of the world and so on. Canada has one of those, and UK, and France, and a number of other countries do, too. I have another view from the get-go that we're probably going to see those digital services taxes go away just as part of trade negotiations. This is an extra source of pressure that only came on for Canada last fall. I don't know for sure, but I would say it seems to me it's not that hard to get rid of that, to dodge this higher tax that nobody wants to pay on their US investments. The trickier part is that there's a separate section and another discriminatory tax from the US perspective is this global corporate minimum tax, this 15% minimum. Over 120 countries have that. That's a bit trickier. There's all sorts of treaties and agreements that's a bit harder to back out of. We've been spending, in fact, our new senior economist, Josh Nye—plug to him, he's been with us for about a month and a half and he's doing a bang-up job, I don't doubt we'll find him on this podcast eventually because he's a strong communicator as well—but he's been owning this file for us. One key thing to appreciate without getting completely into the weeds is there are three levels of this corporate minimum tax. The first level is if you've got one of these international companies operating in your country, you say, okay, I'm going to tax them so they get at least a 15%. That part the US seems not to be that upset about. You can tax companies doing things in your country however you like. The next one, and gee, am I going to be able to articulate this properly? The next one would be, we would agree that if a Canadian company was operating in a different country, and that country didn't sign onto this treaty and was paying less than 15%, we could charge the extra bit in Canada, even though they're earning the profits elsewhere. That would be phase two. The US doesn't seem to object to that too much either. The third phase would be if Canada sees an American company operating in Bermuda paying a low tax rate, we could charge the Canadian subsidiary of that American company the extra taxes to make up for that. That's the part the US says, well, hold on a second. You're charging taxes on an American company operating in Bermuda. This is getting a little squirly. That's the part they object to. That is the only part that Canada has not implemented into law yet. There's a chance that Canada can avoid this without too much distress. But the main takeaway is there is this threat here. It could yet be negotiated away in the Senate version. We'll see how it all plays out. I would view it as a pressure tactic just to get other countries to change their tax policy, as opposed to likely something that gets implemented and really radically changes what the optimal tactical asset mix or regional asset mix is.

Yeah, you'd have to think almost the cost of implementation might override any benefit that you would get. And by the way, that's good to hear that Josh is on board. I know you were trying to find a 25th hour in every day to work a little bit more. So to actually have somebody working with you is a great thing. I want to finish off with one thing. Something I meant to ask you for months on the podcast, and we're running a bit long, but before I forget again, the whole idea of and what's happening with this big, beautiful bill, if I listen to one side of the aisle on this, which goes back to the Reagan administration and Ferris Bueller's day off, voodoo economics, the whole idea of supply-side economics. Where do you fall on supply-side economics and the idea that we cut taxes, we actually increase revenue because we stimulate growth and all these other things. And that's at the core of some of the economists in this administration and their belief around what can happen, at least people advising them on the periphery. What are your thoughts on that?

Well, I mean, listen, it's undeniable that when you cut taxes, the economy probably moves more quickly. I don't think anyone's debating not too much that anyways. As per my comments earlier, which is these tax cuts probably do unleash additional economic growth. The debate is whether they can fully pay for themselves. That was the voodoo economics debate and the Laffer curve. You remember that? It's true at the extreme. At some point, if you levy 100% tax, we're all going to stop working because there's no point. You cut 100% to 99%, and the government will earn more revenue because we'll start working again. I mean, at extremes, you could say, well, there is some truth to that. In the realm of where we are today, I wouldn't think it could completely pay for itself. I guess that's maybe the main takeaway to me. It can boost the economy, but equally, I would still budget for a somewhat larger fiscal deficit than before. Not fully, because, again, the economy can be a bit faster, but it not quite a magical solution like that.

Wow. So Eric, again, a terrific summary of all kinds of things that have happened. Economics, as we say, is cool again. It's just like back when we were in high school and we were the most popular kids because we were the top economics students at our respective high schools. It was fantastic for our social lives, for youngsters who love economics and are on that GDPNow website. It's a fabulous life because economics is cool again. And we love having you here for jobs Friday every month and all those other times in between. But thanks again, and we'll catch up with you soon.

Thanks so much, Dave. Bye, everybody.