The Indicator from Planet Money: SALT-n-Pessimism

Release Date: June 20, 2025

In the June 20, 2025 episode of The Indicator from Planet Money, hosts Waylon Wong and Darren Woods, along with guest Kenny Malone, delve into three pressing economic topics: the surge of stablecoins and their impending regulation, the contentious debate over the state and local tax (SALT) deduction cap, and a significant gender gap in economic sentiment. This comprehensive discussion provides listeners with nuanced insights into the current economic landscape.

1. The Rise of Stablecoins and Legislative Responses

Indicator: $27.6 trillion

The episode kicks off with Darren Woods highlighting a staggering $27.6 trillion as the global value of stablecoin transactions last year. Stablecoins are cryptocurrencies pegged to stable assets like the U.S. dollar, offering the volatility-free appeal of traditional currencies combined with the technological advancements of cryptocurrencies.

“That is a measure of how much people are using stablecoins globally,” Darren notes ([02:30]). The popularity of stablecoins is attributed to their utility in facilitating cross-border payments, reducing bank fees, and providing a hedge against high inflation in certain countries. However, their anonymity has also made them a tool for illicit activities such as scams, drug deals, and ransom payments.

Senate Bill on Stablecoin Regulation

The U.S. Senate has recently passed a bill aiming to regulate stablecoins for the first time. Key provisions of the bill include:

• Reserve Requirements: Companies issuing stablecoins must hold reserves equivalent to the value of the stablecoins in actual U.S. dollars or close equivalents like U.S. Treasury bonds ([04:09]).

• Regulatory Oversight: The Office of the Comptroller of the Currency (OCC) will oversee large stablecoins, while smaller ones will fall under the jurisdiction of state regulators based on where the stablecoin company is headquartered ([04:10]).

However, the bill faces criticism regarding its efficacy. Berkeley economist Barry Eichengreen expressed skepticism, highlighting that regulators historically struggle to keep pace with rapidly evolving financial technologies.

“Regulators couldn’t move fast enough to act when Silicon Valley Bank's assets were vaporizing a few years ago,” Darren references Eichengreen’s concerns ([04:35]).

Supporters argue that the bill establishes necessary guidelines where none previously existed, providing a framework to manage the burgeoning stablecoin market.

Exemptions and Controversies

An intriguing aspect of the bill is the exemption for presidential families from promoting stablecoins. Darren points out that while members of Congress are barred from endorsing the stablecoin market, presidential families remain excluded from this restriction ([05:07]).

2. The State and Local Tax (SALT) Deduction Cap Debate

Indicator: $10,000

Kenny Malone introduces the next topic by focusing on the $10,000 cap on state and local tax (SALT) deductions, a legacy of the 2017 Tax Cuts and Jobs Act under the Trump administration.

“That is the salt cap that you hear people talking about,” Kenny explains ([05:39]). Originally, taxpayers could deduct the full amount of their SALT payments, but the cap was introduced to limit this deduction. This cap has resurfaced as a major sticking point in the current legislative negotiations over a comprehensive spending bill.

House vs. Senate Perspectives

There is a significant divergence between the House and Senate regarding the SALT cap:

• House Proposal: Proposes increasing the cap from $10,000 to $40,000 ([06:05]).

• Senate Stance: Maintains the existing $10,000 limit ([06:10]).

This disparity has led to tensions, with House members describing the Senate’s position as “dead on arrival” and a “slap in the face” to efforts aimed at providing tax relief to high-tax states.

“This is the kind of policy that you would hear Democrats typically bristling at,” Kenny observes, noting the bipartisan implications since higher SALT caps primarily benefit wealthier individuals who pay more in state and local taxes ([06:46]).

Political Dynamics and Potential Compromise

Interestingly, while SALT caps are generally opposed by Democrats, blue states with higher taxes stand to benefit from an increased cap. This has led to some Democratic senators, like Chuck Schumer, criticizing Republicans for obstructing tax relief measures that could benefit their constituents ([07:06]).

Furthermore, even some Republicans from Democratic-leaning states, such as New York, support raising the SALT cap, adding complexity to the negotiations. Darren suggests that despite the current impasse, there remains room for compromise between the House’s $40,000 proposal and the Senate’s $10,000 cap ([07:43]).

3. Gender Disparities in Economic Sentiment

Indicator: 15 Percentage Points

Waylon Wong presents the final segment, revealing a 15 percentage point gap in economic sentiment between men and women based on a recent Harris poll conducted for The Guardian.

“That is the size of the gap between how men and women feel about the economy,” Waylon states ([07:50]). The survey indicates that 62% of women are worried about the economy compared to 47% of men ([08:15]).

Underlying Factors

Libby Rodney, Harris Poll’s Chief Strategy Officer, attributes this disparity to the disproportionate impact of inflation on essentials like groceries and childcare, areas where women are more likely to manage household budgets.

“Women are experiencing the sharp edge of inflation on essentials like groceries and childcare in ways that stock portfolios can't capture,” she explains ([08:51]).

Political and Social Implications

The gender gap in economic concern spans across political affiliations, affecting both Democratic and Republican women. This aligns with Waylon Wong’s earlier findings that households where women handle grocery shopping perceive higher inflation rates than those where responsibilities are more evenly split ([09:31]).

“If you're out there looking at price tags of eggs and ground beef going up week after week, you are probably going to be more worried about inflation,” Waylon encapsulates the daily realities that fuel this sentiment gap ([09:41]).

Furthermore, the survey highlights that women are less optimistic about receiving raises, with 54% of women expecting a raise compared to 63% of men ([09:58]). This expectation gap underscores the broader economic uncertainties faced by women in the workforce.

Conclusion

The June 20 episode of The Indicator from Planet Money provides an insightful exploration of significant economic issues:

• Stablecoins continue to reshape the financial landscape, prompting legislative efforts to balance innovation with regulation.

• The SALT deduction cap remains a contentious policy issue with broad political and economic implications, reflecting deeper debates over taxation and federal spending.

• A persistent gender gap in economic sentiment highlights the unequal impact of economic fluctuations, emphasizing the need for more inclusive economic policies.

By dissecting these topics with expert analysis and real-world data, Waylon, Darren, and Kenny offer listeners a comprehensive understanding of the current economic dynamics shaping our world.

Notable Quotes:

• Darren Woods ([02:30]): “That is a measure of how much people are using stablecoins globally.”

• Darren Woods ([04:35]): “Regulators couldn’t move fast enough to act when Silicon Valley Bank's assets were vaporizing a few years ago.”

• Kenny Malone ([05:39]): “That is the salt cap that you hear people talking about.”

• Kenny Malone ([06:46]): “This is the kind of policy that you would hear Democrats typically bristling at.”

• Waylon Wong ([07:50]): “That is the size of the gap between how men and women feel about the economy.”

• Libby Rodney ([08:51]): “Women are experiencing the sharp edge of inflation on essentials like groceries and childcare in ways that stock portfolios can't capture.”