Credit keeps consumers consuming

Summary

Marketplace: "Credit Keeps Consumers Consuming" - Detailed Summary

Hosted by Kai Ryssdal, Marketplace's January 17, 2025 episode titled "Credit Keeps Consumers Consuming" delves into the dynamics of consumer spending fueled by credit, the state of the housing market, inflation concerns, and the burgeoning interest in historical narratives. The episode features insights from Kathryn Rampell of The Washington Post and Jordan Holman of The New York Times, among other experts.

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1. Resilient Retail Sales and Consumer Spending

Jordan Holman discusses the surprising strength in retail sales during the November and December period. Despite economic uncertainties, consumers continued to spend, particularly on cars and clothing. Retail executives attribute this to personalized advertising strategies and the dominance of one-stop-shop retailers like Walmart and Costco, which encourage additional purchases beyond initial intentions.

• Jordan Holman [01:04]: "They're using a lot of personalized data or like very specific ads, they're figuring out ways how to entice people."

However, Holman notes that executives remain cautious about the fourth quarter due to macroeconomic uncertainties, emphasizing that high consumer spending remains a double-edged sword that supports the economy but may not be sustainable long-term.

2. Inflation and the Federal Reserve's Influence

Kathryn Rampell addresses the apparent disconnect between the Federal Reserve's actions and market reactions. Despite the Fed signaling hesitancy in cutting rates and maintaining a hawkish stance, bond yields have risen, and mortgage rates have exceeded 7%, yet markets seem indifferent.

• Kathryn Rampell [02:43]: "Eventually the markets catch up and they do price in the fact that the Fed is less likely to cut than the Fed itself had forecast a year or so earlier."

Rampell highlights the political polarization surrounding inflation expectations, with Republicans and Democrats holding starkly different views on future inflation trends. She underscores the potential impact of the incoming administration's policies on inflation and economic stability.

3. Housing Market Surge Amid Challenges

The episode transitions to the housing market, where Justin Ho reports a surprising 16% increase in housing starts in December. Ryan Sweet, Chief US Economist at Oxford Economics, raises concerns, noting that increased apartment construction—typically a volatile segment—may not indicate broader market strength.

• Justin Ho [09:19]: "Projects that are breaking ground were up 16% in December from a month earlier."

Despite high construction costs, interest rates, and shortages of building materials and labor, the demand for single-family homes remains robust. Kristen Schwab explains that builders are employing strategies like price reductions and mortgage rate buy-downs to attract buyers, while apartment developers focus on affordable units to meet consumer demand.

• Kristen Schwab [10:37]: "They can offer everything from price reductions to mortgage rate buy downs that can help a potential home buyer make the numbers work."

4. The Role of Credit in Sustaining Consumer Spending

Kristen Schwab explores the critical role of credit in maintaining consumer spending. With non-housing debt, including credit cards and buy now, pay later programs, reaching record high levels, the sustainability of this spending is questioned.

• Kristen Schwab [11:59]: "Nearly half of Americans carry month to month credit card debt and interestingly, a growing number of those people are upper income households."

Odysseus Papadimitriou, CEO of WalletHub, warns of a potential "breaking point" when the job market weakens, and consumers can no longer sustain spending through credit. He attributes the increase in credit usage to lifestyle changes post-pandemic and cautions against the expansion of debt levels during good economic times.

• Odysseus Papadimitriou [13:15]: "The breaking point is when the job market goes south and people can't afford to keep spending."

5. The Surging Popularity of History in Media and Business

In an engaging segment, Will Dunn from the New Statesman discusses the booming interest in history as a commercial genre. Despite a general decline in humanities education and flat book sales in most genres, history-related content is thriving, particularly in podcasts.

• Will Dunn [16:09]: "History has grown by about 6% in the last year. And in podcasts, it really is exploding."

The conversation highlights the success of podcasts like "The Rest is History," which surpasses other popular shows in downloads, emphasizing the public's appetite for historical narratives during times of significant societal change.

• Will Dunn [16:57]: "The biggest history podcast in the world is the 'Rest is History.' And that's getting 12 and a half million downloads a month."

6. Legal Strategies Amid Presidential Transition

As President Trump prepares to take office, Kimberly Adams examines the strategic maneuvers of civil society groups and legal experts in anticipation of policy changes. Groups like the American Civil Liberties Union (ACLU) are bolstering their legal defenses against potential disruptions, particularly concerning immigration and federal policies.

• Cecilia Wong, National Legal Director for the ACLU [22:07]: "Many of them are or will be deployed to the towns and cities, farms and factories where immigration raids might happen."

The "revolving door" phenomenon, where government lawyers transition to the private sector and vice versa, is discussed as a mechanism that, while potentially contentious, facilitates smoother legal battles against incoming administration policies.

• Jordan Holman [24:24]: "The revolving door, as it were, is actually helpful to both sides of this market."

7. Federal Deficit and Debt Projections

Concluding the episode, Kai Ryssdal brings attention to the Congressional Budget Office's alarming projections. The federal deficit is expected to reach $1.9 trillion this year, with the national debt projected to balloon to $52 trillion by 2035. These figures exclude additional costs from extending the Trump tax cuts, highlighting the urgent need for fiscal policy reforms.

• Kai Ryssdal [24:43]: "The CBO says the federal deficit this year is going to be $1.9 trillion...by 2035, federal debt...that's going to be $52 trillion."

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Conclusion

The episode "Credit Keeps Consumers Consuming" provides a comprehensive analysis of the interplay between consumer credit, retail sales, and the broader economic landscape. It underscores the delicate balance between sustained consumer spending through credit and the inherent risks of rising debt levels. Additionally, it touches upon cultural trends in media consumption and the evolving legal strategies in the political arena, all culminating in a stark reminder of the escalating national debt.

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Notable Quotes:

• Jordan Holman [01:04]: "They're using a lot of personalized data or like very specific ads, they're figuring out ways how to entice people."

• Kathryn Rampell [02:43]: "Eventually the markets catch up and they do price in the fact that the Fed is less likely to cut than the Fed itself had forecast a year or so earlier."

• Kristen Schwab [10:37]: "They can offer everything from price reductions to mortgage rate buy downs that can help a potential home buyer make the numbers work."

• Odysseus Papadimitriou [13:15]: "The breaking point is when the job market goes south and people can't afford to keep spending."

• Will Dunn [16:57]: "The biggest history podcast in the world is the 'Rest is History.' And that's getting 12 and a half million downloads a month."

• Cecilia Wong [22:07]: "Many of them are or will be deployed to the towns and cities, farms and factories where immigration raids might happen."

• Kai Ryssdal [24:43]: "The CBO says the federal deficit this year is going to be $1.9 trillion...by 2035, federal debt...that's going to be $52 trillion."

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This summary captures the essence of the Marketplace episode, providing a cohesive narrative of the various economic and social issues discussed, enriched with direct quotes and time-stamped insights for depth and clarity.

Transcript

[Kai Rysdal]

On the program today, the week that was, of course, and the four years to come in this economy. From American Public Media, this is Marketplace in Los Angeles. I'm Kyle Rysdal. It is Friday today. This one is the 17th of January. Good as always to have you along, everybody. We will get to the next four years in this economy in a minute or two. But before we do, there is this week's business to attend to. Kathryn Rampel's at the Washington Post. Jordan Holman is at the New York Times. Hey, you two.

[Kathryn Rampell]

Hey, Kai.

[Jordan Holman]

Hey, Kai.

[Kai Rysdal]

Jordan, let me start with you and retail sales. The American consumer keeps on buying. Here's what I want to know from you in your conversations with the people who are running retail in this economy. How do they keep us hooked? How do they keep us spending? Because, I mean, we've been saying this for years now. The consumer's driving this economy and how long can it last? And, oh, look, it still does.

[Jordan Holman]

Okay. I talked to several retail executives this week and some of them said they were even surprised by how, how much people were spent in November and December. But I, I think it's a few things. It is actually becoming harder to sell people on necklaces or something higher, you know, priced, but they're using a lot of personalized data or like at very specific ads, they're figuring out ways how to entice people. And also the other thing, you think of a Walmart or a Costco, this kind of one stop shop retailer, they're the ones who are really gaining market share. You go in for one thing and then end up with all this other stuff that you leave with.

[Kai Rysdal]

Are they worried at all that it's going to, well, let me ask a better question. It's all groceries and essentials, right? That that's actually what's going on?

[Jordan Holman]

Well, for the November, December time period, a lot of the retail sales was boosted by cars, by clothes, by some of those purchases. But the executives will caution the fourth quarter is like its own beast. They're not saying, okay, well, we think now everyone's going to spend so much in 2025, they're still very cautious because there's a lot of macroeconomic uncertainty going into this year.

[Kai Rysdal]

Yeah, fair enough. Catherine, I want to talk inflation with you. The core numbers this week, you know, a slight downside surprise. Inflation still a factor. Here's what I want to know. How come the market seems to be ignoring, number one, what the Fed is saying and number two, what the Fed is doing. Bond yields are up, mortgage rates are over 7%. And it's like the markets are going, yeah, we don't care.

[Kathryn Rampell]

That's an excellent question and I'm not sure I have a great answer for it. There has been, I would say, like, over the last couple of years, markets have significantly downplayed any sort of hawkishness that that's in my view anyway, that the Fed has signaled, like they keep on saying we're going to cut rates less frequently or they keep on signaling that there's more hesitation anyway about continued rate cuts. And markets are like, eh, whatever. We don't really believe it. You know, eventually the markets catch up and they do price in the fact that the Fed is less likely to cut than the Fed itself had forecast a year or so earlier. But it's really perplexing. I mean, I think it matters, of course, that corporate tax cuts are on the table and that's boosting equity prices and that's maybe making people feel a little more bullish. But, you know, there's a lot of uncertainty right now. So there are many different ways to read the data.

[Kai Rysdal]

Is there inflation uncertainty, Catherine, do you.

[Kathryn Rampell]

Think if you look at the surveys of consumers, there definitely is. There's a lot of uncertainty about inflation and a lot of political polarization even about whether inflation is expected to continue cooling or to go up. If you ask Republicans, they say that they think there's gonna be like no inflation over the next year. Democrats say they think there's gonna be a lot. So it really depends. And what the incoming president does may affect the answer to those questions as well. Right. If we have tariffs, if we have mass deportations, if the new president decides to politicize the Fed, all of those things would affect the answers to those questions.

[Kai Rysdal]

Right? Jordan? Generally speaking, the vibe is whether founded or not, the vibe is that the second Trump administration will be more friendly business. That will then lead to better economic times and consumers will be likely to spend more, spend more. Do you find retailers buying into that and are they optimistic for 2025?

[Jordan Holman]

Yes, I think a lot of them are optimistic. And you know, their point to the fact that that's kind of what happened in the first Trump administration, but they will also mention some of the things Catherine just did to immigration. What, what could that mean? Or the lack thereof tariffs, that all of those things could impact how the consumer mindset is. So they're still also planning cautiously. It's always better to, you know, what's it called? Under promise over deliver. And so it seems like that's kind of the vibe Just because they're not quite sure. And we'll get more insight in a few weeks, but it's a bit too early.

[Kai Rysdal]

Yeah. Wait, what's coming up in a few weeks? Is there something not on my calendar that I should be paying attention to?

[Jordan Holman]

No. Just once Trump, like, starts enacting things.

[Kai Rysdal]

Well, yeah, well, look, I mean, we're not gonna know until we know. But look, Katherine, that gets me to my last question. It goes like this, and I'm reasonably sure you and I have talked about this before. Presidents often get too much credit for what happens in an economy. And they also get too much blame. Right. Because generally speaking, presidents have not had a lot of instantaneous control over what happens in an economy. That seems to be different come Monday, when President Trump will lean very heavily on the levers that he has.

[Kathryn Rampell]

Yes. Unfortunately, I don't think he's going to do a lot of the things that consumers or voters elected him to do. Like, whatever levers he has, they don't include lowering the price of eggs and bacon. So that's not gonna happen. But there is a lot of stuff he could do to mess things up. I mean, I think in general, when the economy is going well, there's not a ton of tools available to the sitting president to go even better, but there are a lot of missteps that they could take to, to, to knock things off course. So we've talked about tariffs. You know, tariffs would be extremely disruptive to consumers, to, to businesses, exporters, you name it. You know, entire supply chains. Supply chains could get uprooted. You know, major changes to the immigration system. Again, immigration is part of the reason high levels of immigration is part of the reason why we've had inflation cooling, in fact, for the last few years, why we've been able to sustain such high job growth. There's a lot of demand for workers, and the workers who are coming in working age, immigrants are filling some of those jobs. So if he shuts off that spigot, whether we're talking about illegal immigration or illegal immigration, that could throw the US Economy off course as well. And then as you and I have talked about before, and as I alluded to earlier, if he messes with the Fed, that could cause a lot of damage. If Trump just sits back and does kind of nothing, he's actually inheriting a very good economy right now. Now, whether he would get, he should get credit for it. Biden should get credit for it. Lots of other things should get credit for it. We can debate another day. But, yeah, I think there's a lot of risk for things that this president has talked about doing that could, in fact, have major effects on the economy.

[Kai Rysdal]

Katherine Rampel at the Washington Post on this Friday. Jordan Holman at the New York Times, thanks. You too.

[Kathryn Rampell]

Thanks, guys.

[Kai Rysdal]

Have a nice weekend. Wall street to end this week. The Biden era ends on an up note. We will have the details when we do the number with apologies to W.P. kinsella. He wrote the book Field of Dreams. You'll see where I'm going in just a second. With apologies. If you build it, they will come if they can afford it. We got an update on home construction today. Housing starts. Projects that are breaking ground were up 16% in December from a month earlier. And that's a bit surprising given how expensive it is to build homes right now. Construction loans ain't cheap. See also the interest rates that I was talking about with Catherine. And there are shortages of building materials and skilled labor, too. Marketplace's Justin Ho has more on that December uptick and what the coming year might bring.

[Justin Ho]

Today's report raised a few red flags for Ryan Sweet, chief US Economist at Oxford Economics. He says for one, construction usually slows down in December when it's really cold in parts of the country. And when you look at the types of construction projects that broke ground, it was mostly apartments.

[Kai Rysdal]

And that's the most volatile segment of the housing market, particularly when it comes to the construction side.

[Justin Ho]

Sweet says in December, apartment construction probably looked higher because in the previous month it was slow.

[Kai Rysdal]

We've had a string of natural disasters. We've had hurricanes that kind of teed us up for a decent rebound in December.

[Justin Ho]

But there are some signs that the construction market is actually improving. A survey out this week from the national association of Homebuilders found that builder sentiment rose. And Odetta Kushi, deputy chief economist at First American, says permits for new single family homes ticked up a little.

[Kristen Schwab]

Existing home inventory is limited, and so you need more new homes being built to sort of fill in the gap.

[Justin Ho]

That's because there's still plenty of demand for single family homes, even though prices and mortgage rates are still high. Kushi says it helps that home builders have a few tricks they can use to encourage buyers.

[Kristen Schwab]

They can offer everything from price reductions to mortgage rate buy downs that can help a potential home buyer make the numbers work.

[Justin Ho]

Meanwhile, apartment developers will likely focus on building more affordable rental units. John Kirk is the founder of the Light Path Company, an apartment development firm in New Braunfels, Texas. He says developers can build smaller units they can use cheaper materials and they can try to get concessions from local governments, tax abatements or fee waivers or.

[Kai Rysdal]

Some type of agreements to provide a more affordable product.

[Justin Ho]

Kirk says apartment construction is still going to be a challenge this year, especially since construction loans are expensive. But he says as long as builders can make affordable units, construction could pick up. I'm Justin Ho for Marketplace.

[Kai Rysdal]

Jordan was giving us the behind the scenes on the retail sales numbers we got this week. How those retailers are keeping us hooked. One thing we really didn't get into though, is that more people are using credit cards and buy now, pay later programs as they buy non housing debt that's the actual term that includes credit cards has hit a record high. That's according to the New York Fed. Marketplace's Kristen Schwab looks at how long consumers can keep on consuming on credit.

[Kristen Schwab]

This story begins with a familiar narrative, the tale of two households. On one side, you have lower income Americans relying more on credit cards to pay for essentials like groceries and gas. And then there is the other half.

[Kai Rysdal]

Spending is being driven by upper income households.

[Kristen Schwab]

Ted Rossman, a credit card analyst at Bankrate, says this is usually the case but is especially true now. People who own their homes, their finances have been buoyed by rising property values and low mortgage rates they locked in a few years ago. Meanwhile, unemployment is low, and even if.

[Justin Ho]

It doesn't feel great that inflation is gobbling up a lot of your wage.

[Kai Rysdal]

Gains, at least there are wage gains.

[Kristen Schwab]

All in all, Rossman says the debt to asset and income ratios are looking safe. Despite that, though, nearly half of Americans carry month to month credit card debt and interestingly, a growing number of those people are upper income households, says Atif Mirza, senior vice president of Digital insights at VantageScore.

[Kai Rysdal]

The rate of growth in delinquencies for.

[Jordan Holman]

High income consumers were much faster than.

[Kai Rysdal]

The lower income consumers.

[Kristen Schwab]

Higher income consumers aren't just increasingly spending more, they're increasingly paying off less. Odysseus Papadimitriou is CEO of WalletHub.

[Kai Rysdal]

This is the time to make your debt smaller, not to expand your debt levels. And unfortunately, most people use the good times to expand the debt levels.

[Kristen Schwab]

Lifestyle creep is real, and Papa Demetriou says some of the habits people formed since the pandemic traveling and shopping and dining out, some of them have stuck. And he doesn't think those habits will change soon.

[Kai Rysdal]

So the question is not whether we're going to reach a breaking point. The question is when we will reach.

[Kristen Schwab]

That breaking point, he says. The breaking point is when the job market goes south and people can't afford to keep spending. I'm Kristen Schwab for Marketplace.

[Jordan Holman]

Coming up, the revolving door, as it were, is actually helpful to both sides of this market.

[Kai Rysdal]

If you say so. First though, let's do the numbers. Dow Industrials picked up 334 points today. 8, 10%, 43,487. The Nasdaq increased 291 points. That's about a percent and a half, 19,630. The S&P 500 added 59 points, 1% even 59 and 96 there. For the five days gone by, the Dow grew 3.7%. The Nasdaq climbed 2.5%. S&P 500 elevated itself 2.9%. Justin Ho is telling us about the jump in housing starts. Taylor Morrison Home Corporation down 1.1% today. KB Home slid about a half percent. Smith Douglas Home Corporation gained 1 and 4, 10% today. Electric vehicle maker Rivian Automotive has finalized an agreement with the Department of Energy to build a new manufacturing facility in Georgia. 7,500 jobs on the line. Rivian nonetheless down 1.6 bonds down yield on the 10 year T note 4.62%. You're listening to Marketplace. This is Marketplace. I'm Kai Rysdal. I have said more than once on this program, I am reasonably sure that history is cool or more formally, that history really matters. History is also, it turns out, a business model. There was a story in Bloomberg the other day, the title of which was the Business of History is Booming. Will Dunn wrote it. He's the business editor of the New Statesman over in the UK Will, it's good to have you on the program.

[Will Dunn]

Thank you.

[Kai Rysdal]

Give a sense, would you? Just as a ground truth here, how well is history doing sort of as a genre in the business world?

[Will Dunn]

It's doing incredibly well. So you might have noticed that in bookshops across the country and indeed around the world, lots of books aren't selling that well. But the one shelf you will always see in every bookshop is a well stocked history shelf. That's been true for a long time, but now it's really swelling in popularity. So in the UK And Ireland, history sales, book sales are the highest since records began. And in the US So the whole US Book market is pretty much flat, apart from a few genres, one of which is history, which has grown by about 6% in the last year. And in podcasts, it really is exploding. The biggest history podcast in the world is the rest is history. And that's getting 12 and a half million downloads a month.

[Kai Rysdal]

Also, just for public radio listeners here in the United States, to put this into context, the rest is history gets more downloads than this American life.

[Will Dunn]

That's right, yeah.

[Kai Rysdal]

Yeah. Which, you know, is not nothing. Okay. Now it's pretty big. Why? Why is this happening?

[Will Dunn]

Well, I think there are a few reasons. Like I said, history has always been popular. I suspect it has something to do with the current moment that we are in. And in moments of profound political or technological or social change, people often look to the past. So this was true of Victorian Britain, for example. Their society was changing. They had the industrial revolution, they had new technologies and they were obsessed with Egyptology. They're obsessed with the ancient world. And so I think it's a lot to do with that. It's also a lot to do with podcasts themselves. People really, really like it. And I think there are just a lot of people out there who are doing a really good job of telling those stories.

[Kai Rysdal]

We'll get to the podcast in a second. But I think also it's interesting to note that as you pointed out in this piece, sort of academic history is on the wane. Right. Fewer people are actually studying it in school.

[Will Dunn]

That's right, yeah. So that's the other side of this is that university admission for history and degrees are going down. That I think is partly to do with the long term trend in the decline of the humanities because university keeps getting more and more expensive and people rightly think about, oh, what's going to be the job I'll get at the end of this. And not a lot of teenagers think, oh great, I'm gonna make my millions as a historian. They could be wrong about that actually, by the way, because history is a great preparation for lots of different jobs.

[Kai Rysdal]

You're preaching to the choir here, pal. I'm a history guy. I was a history major way back.

[Will Dunn]

Yeah. And it's, you know, it's fantastic preparation for lots of different careers. But it doesn't look like that from, you know, somebody, a teenager choosing their major.

[Kai Rysdal]

On the podcast thing, as we were talking about before we turn the microphones on, I am a recent discoverer of and now newly obsessed with the rest is, which is, as you point out in this piece and as will be self evident to anybody who listens to it, it's two middle aged English white guys talking about history, which you wouldn't think would be gripping. But the point is, yeah, it's about the history, but it's also about the parasocial relationship here. Right. It's about the relationship that we as listeners have with these people who are saying these interesting things.

[Will Dunn]

That's right, yeah. I mean, you perhaps may experience this yourself with your listeners, Kai, I'm sure.

[Kai Rysdal]

Which I enjoy. You know, it's a key part of how I do what I do. Yeah, yeah.

[Will Dunn]

It is quite a personal experience listening to somebody's voice, especially in your headphones, perhaps for hours a day. And the company behind the rest is History Goal Hanger. They know that and they deliberately seek that. They concentrate on the relationship between the two hosts. And that really helps with the when it's people who you have a kind of feeling of a social relationship with, that really increases your personal feeling of investment in the story.

[Kai Rysdal]

Yeah, Goal Hanger is quite an interesting company. We should actually just do a whole separate thing on that. Will Dunn at the New Statesman over in the UK wrote in Bloomberg about the business of history. Will, thanks a lot. I appreciate your time.

[Will Dunn]

Thanks for having me on.

[Kai Rysdal]

Lawyers are surely among the busiest people in President elected Trump's retinue as the incoming administration readies its initiatives and executive orders, proposals that will surely be challenged by those on the other side, the presidential transition offers a window into the Washington legal industrial complex. As Marketplace's Kimberly Adams reports, many of.

[Kimberly Adams]

The groups that opposed Trump in his first term were a bit blindsided by his 2016 win and had to scramble to respond to his policies and practices.

[Kai Rysdal]

One thing that was very different in 2024 from 2016 is I don't think anybody was totally surprised this time.

[Kimberly Adams]

Noah Bookbinder is president of Citizens for Responsibility and Ethics in Washington. It supported some of the efforts to block Trump from running for office again, clearly without much success, and filed briefs alleging a variety of misconduct during Trump's first term. Even when they weren't successful, they did learn what kind of resources it takes to fight the Trump administration in court. So this time, says Bookbinder, they have a plan.

[Kai Rysdal]

We've had job postings before the election.

[Justin Ho]

We'Ve had more after the election.

[Kai Rysdal]

We are doing some hiring.

[Kimberly Adams]

Bookbinder says many civil society groups are updating their strategies in light of what they learned during the first Trump term and its aftermath.

[Kai Rysdal]

A lot of people tried a lot.

[Justin Ho]

Of things in the first Trump administration, and some things worked well in pushing back against abuses and corruption, and some.

[Kai Rysdal]

Things worked less well. And maybe it's a time to be a little bit more strategic.

[Kimberly Adams]

The American Civil Liberties Union, for example, will be focusing a lot more on local action. The ACLU successfully challenged some first term Trump policies on immigration and funding for the border wall. This time, says Cecilia Wong, national legal director for the aclu, one of the big differences between what President Trump did in his first term and what he is promising to do in his second term is that he has said that he is going to launch the largest mass deportation operation in U.S. history. Wang oversees about 200 lawyers and support people who make up about 30% of ACLU staff. And she says many of them are or will be deployed to the towns and cities, farms and factories where immigration raids might happen. And so I think that what we're.

[Jordan Holman]

Going to be doing is fighting back.

[Kimberly Adams]

In communities around the country. And the goal is to make for longer range change in terms of federal policy. And to help with these efforts, we're likely to see lawyers from the previous administration, Biden's eventually in court opposing efforts by the Trump administration to unwind their work. The old revolving door.

[Jordan Holman]

You know, many career lawyers are mission driven.

[Kimberly Adams]

Deb Connors with the law firm Morrison and Forster, but spent decades in the Justice Department. She says lawyers in appointed roles usually decamp for the private sector after their administration's term is up. And for the lower level career attorneys, especially those passionate about their work, say on environmental regulation or antitrust enforcement, and.

[Jordan Holman]

If they see that that's going to kind of come to a standstill where they are, then they're going to look for other opportunities.

[Kimberly Adams]

The money can be a bit better on the private side for the former feds. Plus, says Connor, having that in house experience can make things a bit easier for government lawyers. When they're sitting across from someone who has walked in their shoes, they understand.

[Jordan Holman]

How these matters work. That's very helpful. So I think the revolving door, as it were, is actually helpful to both sides of this market.

[Kimberly Adams]

That may not make the coming litigation any less contentious, but it can help smooth the logistical side of things. In Washington. I'm Kimberly Adams from Marketplace.

[Kai Rysdal]

This final note on the way out today, which comes with the acknowledgement that sometimes the numbers involved in government finances are so big they can seem like funny money. They are, however, very, very real. The Congressional Budget Office was out with its 10 year budget and economic forecast today, and let me just tell you, there are a whole lot of zeros in there. The CBO says the federal deficit this year is going to be $1.9 trillion. Deficits again are the annual shortfall between what we take in and what we spend. In all, by 2035, federal debt, that's what we owe since Alexander Hamilton was Secretary of the Treasury. That's going to be $52 trillion. And that is without, it should be pointed out, the 4 or so trillion dollars that extending the Trump tax cuts are going to cost. Our theme music was composed by BJ Lederman. Marketplace's executive producer is Nancy Fargoli. Donna Tam is the executive editor. Neil Scarborough is vice president and general manager. And I'm Kai Rysdal. Have yourselves a great weekend, everybody. We will see you again on Monday. All right, this is apm.