0:00 Republicans are working hard on the big
0:02 beautiful bill. The Trump bill would
0:04 extend the 2017 tax cuts and jobs act
0:06 through 2034. That's kind of the big
0:08 piece here is these tax cuts. And
0:10 there's a bunch of campaign stuff like
0:12 no taxes on tips or overtime things that
0:15 Trump promised. And the Tax Foundation,
0:18 this is a nonprofit that analyzes tax
0:20 policy, estimates the tax cuts would
0:22 reduce revenues by 4.1 trillion over 10
0:25 years. That's 400 billion a year. And uh
0:27 the bill also aims to cut 1.5 trillion
0:30 in spend over the next decade. Some
0:31 Republicans think this is weak and are
0:34 pushing for 2 trillion in cuts or more.
0:36 Freeberg, you actually I understand from
0:38 our group chat did a deep dive here and
0:41 you I think are responsible in many ways
0:43 for bringing the issue of our national
0:46 debt to the forefront especially
0:48 particularly with this administration
0:50 and doge which we give you a lot of
0:51 credit for you being a single issue
0:53 voter for this. Are you worried about
0:56 the budget now? We're we're 100 plus
0:58 days into Trump. Do you think he's got
1:00 any chance of cutting the deficit? I'll
1:02 talk about the House tax bill, which I
1:04 think is to use your term Jal absolute
1:07 discard.
1:09 I uh bill
1:12 is a bill is a disc. Wow. It is absolute
1:16 discard. If you're an American, you
1:19 should feel shame that your elected
1:21 officials are proposing that this is the
1:23 bill that gets passed, that we vaporize
1:25 this much money, that we put ourselves
1:27 this much further in debt, that we do
1:29 not treat this situation as the fiscal
1:33 emergency that it is. The bill
1:35 ultimately yields no real change in the
1:39 annual deficit. that the annual deficit
1:40 could climb to
1:42 $2.5 trillion being added to the federal
1:45 debt load every single year going
1:48 forward. In fact, if you look at the
1:50 Treasury yields, the 30-year is now
1:52 kissing
1:54 5%. So, the United States has called $
1:57 37 trillion of debt. At 5%, we're paying
2:02 close to $2 trillion a year just in
2:04 interest on our debt. As this debt gets
2:08 refinanced, the interest rates are going
2:10 up because the probability that the US
2:12 will default on its debt payments, which
2:14 is what you're buying when you buy US
2:16 treasuries, you're getting the US
2:18 government to pay you some number of
2:20 dollars with interest over time. And the
2:22 market is now demanding that that
2:24 interest rate be as high as 5%. Because
2:27 of this fiscal situation that the United
2:29 States finds itself in, we are now
2:30 burning an additional $2.5 trillion a
2:33 year, adding to our debt load. We are in
2:35 a fiscal crisis and we're not willing to
2:37 admit it. And I've said this from day
2:39 one that Doge can only do so much. And
2:42 clearly that's the case where they're
2:43 now talking about sub $300 billion a
2:45 year in potential annual savings from
2:47 Doge action. At the end of the day,
2:49 Congress needs to take action. And this
2:51 bill from Congress doesn't take much
2:53 action. I will tell you that if you look
2:55 across the board, all of these programs
2:57 are still being proposed to be run at a
2:59 cost that is well in excess of their
3:02 precoid levels. And so I would set two
3:04 guiding principles if I was to be the
3:07 benevolent dictator of the United States
3:08 of America. My guiding principle number
3:10 one would be that any program that we
3:13 intend to continue to persist have its
3:15 budget level cut to pre-COVID to 2019
3:18 levels. Second would be and if we did
3:20 that by the way we would be in a much
3:21 better fiscal situation. The second
3:22 would be that we add no new programs in
3:24 the moment. There's a whole bunch of new
3:25 thrown into this bill as well as
3:27 increasing the cost and a few cuts here
3:30 and there. I'll just highlight a couple
3:31 that I think are worth noting. You know,
3:33 there's a cut in the SNAP program, which
3:34 is the Supplemental Nutrition Assistance
3:36 Program. That's food stamps. And I
3:38 talked about this with Brook Rollins in
3:40 the interview I did a few weeks ago. You
3:41 can watch it on YouTube. And we talked a
3:43 little bit about how this SNAP program
3:45 has absolutely exploded in size from 60
3:48 billion a year in 2019 to 120 billion a
3:52 year today. So, in this budget proposal,
3:55 they're actually cutting it back by
3:57 about 30 billion. So, to 90 billion. So,
4:00 it's still 50% higher than it was
4:03 pre-COVID. And there's a lot of kind of
4:05 stories we could go through on what
4:07 happened during CO that caused this
4:08 thing to blow up the way it did, but
4:10 political wrangling pulled money out of
4:13 the government into people's pockets,
4:15 and that is persisting today. I'm a big
4:18 believer in cutting taxes. Obviously,
4:20 I'm probably more libertarian than
4:22 anyone else on this show or that we've
4:24 ever had on this show, but at the end of
4:26 the day, you can't just say, "Hey, let's
4:27 cut taxes and spend more than we're
4:29 making. It doesn't make sense." A lot of
4:31 this stuff's going to be exploitable.
4:32 The tips and overtime exclusions are a
4:35 way to pander to people to get votes and
4:37 now keeping your promises on those
4:38 votes. I think at the end of the day,
4:40 the tips and overtime rule could invite
4:42 a lot of gamesmanship and loopholes that
4:44 will be created and people will wake up
4:45 and be like, "Uhoh." For example, if I'm
4:47 an independent contractor, I will enter
4:49 into a contract with someone that says,
4:51 "Here's the service I'm providing you
4:52 for 50 bucks, and then there's an
4:54 optional tip you can give me at the end,
4:55 and then I won't pay taxes on that tip."
4:57 And I can give you a hundred other
4:58 examples that this will create an
5:00 inordinate number of crazy insane
5:03 loopholes. The interest on the debt at
5:05 $1.9 trillion a year equates to 7% of
5:09 GDP. That means seven cents of every
5:12 dollar that moves in every transaction
5:14 in this country is being used to pay
5:16 down interest on money we overspent in
5:19 the past. It has become an absolute
5:21 crisis. I think that there's a few folks
5:23 that should be shout out on this, which
5:25 is Senator
5:26 Paul and Senator Ron Johnson, who both
5:29 highlighted how ridiculously
5:32 underimpressive the spending cuts are in
5:34 this bill. I think we've got a lot of
5:36 work to do. I'm deeply disappointed. I'm
5:38 scared and I hope that um that this all
5:40 gets kind of fixed up and in recon. Do
5:42 you think that we should line item out
5:45 all the new spending irrespective of
5:47 what it is? All new spending line item
5:49 out. That's that's rule one. And rule
5:51 two is all existing programs got to go
5:53 back to pre-COVID levels. You do those
5:54 two things, we're in a great place.
5:56 Yeah. And just to put some numbers and
5:58 some charts behind it, here is the the
6:00 debt back to Clinton era. Clinton added
6:02 uh 392 billion in eight years. It's
6:05 barely noticeable on the chart. 40 50
6:07 billion a year. Bush 5.4 trillion four
6:10 years about 1.3 trillion a year. Obama a
6:13 trillion a year. And then we get to
6:14 Trump 1.0 two trillion a year. Suddenly
6:17 we decided we would double it. Biden
6:19 same thing. They added almost exactly
6:21 the same amount
6:24 to the right on track to do the same.
6:27 Yeah. It's not total dollar amount. It's
6:29 percent of GDP that you're adding. And
6:32 you know, right now at at two and a half
6:34 trillion dollars a year of deficit,
6:37 we're talking
6:38 about a deficit to GDP of like 8%. Yes.
6:43 8% a
6:45 year. This is like Argentina. This is
6:48 like insane. The fact that we don't
6:50 treat this like a fiscal emergency and
6:52 everyone goes up and they tout, oh,
6:53 we're going to make 60 billion in cuts
6:55 in Medicaid. That's out of $820 billion
6:58 of annual spend. you know, oh, we're
7:00 making 30 billion in cuts in SNAP.
7:03 That's still 50% higher spend in total
7:05 than we were in 2019, a few years ago,
7:08 when we didn't have that much of a
7:09 problem. This has become like such a
7:13 reset of expectations. And I worry again
7:16 that we went into this, I think, in a
7:18 very optimistic way thinking that this
7:19 administration was going to treat things
7:21 differently. We had Doge, we had
7:23 alignment on the importance of the
7:24 budget. Besson has highlighted it. And
7:26 then it's kind of back to gamesmanship
7:28 in DC. all these representatives from
7:30 Congress show up and try and get money
7:32 for their constituents in a way that is
7:34 not sustainable. We're not going to be
7:36 able to keep this up and we're not
7:37 really having the hard and tough
7:38 conversations we need to be having. And
7:40 every year, everyone wants to get
7:41 elected by keeping programs and keeping
7:43 money flowing that their constituents
7:45 elected them to do. And they want to add
7:47 new programs. They can go on CNBC and
7:49 say, "Look at this cool new program I
7:50 stood up. It's great. This is going to
7:52 create the future of America." And
7:53 meanwhile, there's no future of America
7:55 because we're burning $2.5 trillion
7:57 dollars a year. It is like an
7:58 existential crisis that no one's willing
8:00 to stand up and highlight just how
8:02 critical this emergency is. $2.5
8:04 trillion of deficit spending on a $28
8:07 trillion
8:09 GDP. Tell me when in history that's
8:11 actually worked out at the end of the
8:13 day except when you're in some war and
8:15 you're going to end up taking over some
8:16 country and getting all their resources.
8:17 And as you mentioned this actually this
8:19 has this has you know knock on effects
8:21 with regard to things like dd
8:22 dollararization. Why are you investing
8:23 in the American dollar if you believe
8:24 that's why it's going to this is the
8:27 debt this is the debt death spiral that
8:28 we find ourselves in because what
8:30 happens is people stop owning treasuries
8:32 when they start to question whether or
8:34 not 30 years from now the US government
8:36 is going to meet its debt obligations
8:37 even the smallest marginal question of
8:39 that drives interest rates up 1% 2%.
8:42 Suddenly your 30-year Treasury yields at
8:44 6% 7%. And then your interest rates
8:47 climb and then your deficit spending
8:48 climbs and that's how it becomes a
8:50 spiral. So now the debt goes up even
8:53 more than it did the year before and
8:54 then the next year it goes up even more
8:56 per year than it did the year before.
8:57 That's why it's called a debt death
8:59 spiral. One of the things I've heard in
9:01 a lot of members of the cabinet that
9:02 I've met with over the last couple of
9:04 months is we've got all these new
9:05 sources of revenue. I had an interview
9:07 with Doug Bergam. He talked about
9:08 unlocking America's assets. We've got
9:11 this balance sheet with lots of assets.
9:12 We're going to do land leases and all
9:13 sorts of other things. We we met with
9:15 Lutnik. He's going to sell the Trump
9:17 gold card, the immigration card. We met
9:19 with Bessant. He's got these ideas on
9:21 how we're going to drive. Everyone's got
9:22 great theory on how we're going to grow
9:24 GDP and actually grow government
9:25 revenue. But until those dollars start
9:28 to flow in, we have to get our fiscal
9:30 house in order. We have to cut spending.
9:33 When those dollars start to flow in,
9:35 then you can start to spend. But you
9:37 can't spend ahead because otherwise the
9:39 cost of the debt and the economics
9:41 uncertainty is going to limit our
9:43 ability to execute on the back end on
9:44 that revenue generation. And I'm very
9:46 worried about no one kind of paying
9:48 enough attention to this. So, I just,
9:49 you know, I feel very passionate having
9:51 seen this bill that we're just not on
9:52 the right track.
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