Brain-controlled iPhones, a Japanese asset buy-a-thon, and Trump tax cut debt

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0:11This is the Indicator from Planet Money. I'm Darian Woods, here with the wondrous Weyland Wong. Wondrous Weyland Wong? Wow, what a Friday treat. Hi, Darian. We also have the ginormous intellect of Jeff Goh from Planet Money. Welcome. That is the nicest thing anyone's ever said to me. Oh, wow. I feel so affirmed. Can we just log off? We have work to do. Oh, no. It's Indicators of the Week. Yay! Yay! We are here, as always, to bring you the most fascinating snapshots from the week of economic news. And on today's show, Japanese asset buyers make it rain. iPhone powered by the brain. And how in the world are we going to pay for Donald Trump's tax cuts?

0:57We will explain.

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2:39It's Indicators of the Week. Waylon, you're first. Okay, my indicator is 8.2 trillion yen. That's about 56 billion U.S. dollars. And that is the net amount of Japanese stocks and bonds purchased by foreign investors in the month of April. Now, according to the Financial Times, this was the biggest shopping spree by foreigners for Japanese assets since the government started tracking this data in 2005. OK, I'm thinking April was notable because? Well, to jog your memory, at the beginning of the month, President Trump made this huge tariff announcement. This then kicked off a bit of a freak out in financial markets, you might recall.

3:23And something really weird happened with U.S. treasuries. I talked about this in yesterday's episode. prices for U.S. government bonds went down. That means investors were selling treasuries. Right. And that's like super weird because treasuries are supposed to be the safe haven that everyone buys when they think stuff is in trouble. Exactly. They're considered the safe choice even when the bad news or the uncertain news is coming from the U.S. We're still the safest place to park your money. In April, something different happened. The markets reacted so badly to the tariff announcement that investors ran away from treasuries.

3:58They didn't want anything to do with U.S. assets. And they looked at buying stuff in other countries instead, including Japan. And so as of this recording, the markets have calmed somewhat, right? Kind of. It was a bit of a rocky week for treasuries, I will say. Bond prices went down again midweek. They've come back, but the markets are still showing concerns over the budget deficit. And of course, we've got this huge budget showdown looming in Congress, which brings us to your indicator, Jeff. Oh, boy. Oh, boy. OK. So my indicator of the week is three point eight trillion dollars. U.S. dollars.

4:32That's a real indicator. That that is how much it'll cost over the next 10 years to pay for all of the tax cuts that President Trump promised during his campaign. Mere three hundred eighty billion a year on average. Something like that. Yeah. And so the big fight in Congress right now is how are we going to pay for all of that? And when it comes to the federal budget, there's really only a few big ticket items. There's Social Security. That's the biggest. Then there's health care programs like Medicare and Medicaid. And then there's defense. Oh, so we're cutting defense? That's a funny one, Waylon.

5:08Yeah. No, not defense. So it's really just Social Security, Medicare, Medicaid, pick your poison. And OK, for a long time, there has been this one universal ironclad rule in Washington, which is you don't touch Social Security and you don't touch Medicare. These things are stackersanked, right? They're like the third rails of American politics. Yeah. Like as a politician, you don't want to mess with people's retirements. you don't want to mess with health care for the elderly or like your political career is over. Which leaves Medicaid, which, you know, provides health care for low income people, especially children and pregnant women.

5:47And so for many decades, budget minded politicians, mostly Republicans, have been clamoring to cut Medicaid. It's this big, juicy target. But this week, when Republicans in the House came out with their budget proposal, it was surprisingly less catastrophic for Medicaid than expected. So the cuts have not been as deep as some people who are advocates for Medicaid were worried about. Yeah, I mean, these are still serious cuts. Millions of people could lose their health care. But what's surprising now is that you're seeing Republican senators like Josh Hawley come out and defend Medicaid, saying Medicaid is important, that you can't touch it, that touching it would be political suicide.

6:28OK, what's happening in the Republican Party? Yeah, well, the backstory to all of this is that over the past decade or so, thanks to the Affordable Care Act, most states have expanded Medicaid. So now around 21 million more people have health insurance. A lot of those people benefiting from Medicaid live in red states. So those are all the people that stand to get really angry if their health coverage gets cut. Yeah. Like the reason that politicians are afraid to cut Social Security or Medicare in the first place is because too many people rely on it. And something similar is maybe happening to Medicaid right now.

7:03It is turning into the new third rail in politics because it helps a lot of people. It makes their lives better. And when a government program is helping a lot of people, it becomes really hard to cut it. When you're on the train lines of making policy, you do not want to touch the third rail. All right, Darian, you're next. What's your indicator? My indicator is 100 million. That's how many people around the world have some form of paralysis or movement impairment. But there may be technology around the corner that could make their lives easier. Apple is working with a brain implants company.

7:36Whoa. Is this like the new frontier of wearables? Basically, yes. Apple is working with Synchron, which develops these devices that are kind of like thin needles that get implanted into your brain with wires running through your body. that sends signals to your device. Oh my gosh. You can just think left or right and click, and the message is passed onto a tablet or a phone or a virtual reality headset. Whoa. So how far along is this? Are we talking like proof of concept, prototype? They're actually making these already? It already exists. It's not in the mass market, but it is being tested. Wall Street Journal this week reported about a man with ALS, Mark Jackson.

8:16He was one of these test subjects. So the company Synchron installed the implant in Mark's brain, and then he put on a VR headset showing this virtual world in the Swiss Alps, and he could control where he looked and digitally walked around. Whoa, so he is already living in the future. Yeah, and of course, to actually sell to the public, a company like Synchron or Elon Musk's Neuralink needs approval from the FDA before they go around poking at customers' brains with electronic implants. And I should mention, there's been federal investigations into Neuralink's animal welfare practices when it comes to testing.

8:55The jury's still out on some of those allegations. But, you know, monkeys have died. Oh, no. Anyway, back to Synchron. The CEO of that company thinks they'll get government approval to sell their devices before 2030. So, less than five years away. Okay, so you mentioned there's like 100 million people around the world with problems with movement that could benefit from this potentially. But don't the techno-optimist crowd like Elon Musk at all, don't they want this technology even for people who have full movements of their limbs? Elon Musk has talked about a world in which hundreds of millions more people have these kind of implants.

9:29They'll have superhuman vision backed up by computer memory, what he calls a Fitbit in your skull. Are you guys tempted? If I shoved a Fitbit up my nose, would I get the same result? Extraordinary senses of smell. That's for the next product development. If you couldn't tell, I'm not a techno-optimist. I'm a techno-pessimist. Where do you fit on the techno-optimist to pessimist scale, Jeff? Yeah, I just don't want to be a part of this meat space anymore.

10:02Well, thanks for being here, Jeff. It's been great, guys. We'll see you later if we survive the robot apocalypse. This episode was produced by Angel Carreras for the engineering by Kweisi Lee. It was fact-tracked by Sarah Juarez. Cake and Cannon edits the show and The Indicator is a production of NPR. And a very special thank you to the producer, Lily Quiroz. She lent a helping hand over from Morning Edition. She was a wonderful addition to our team here at The Indicator for the past few months. Thank you, Lily.

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