0:00 What happens when there's a debt crisis?
0:02 Why haven't we had one yet? You said we
0:04 probably should have had one. I don't
0:05 know why we haven't, but we're going to
0:06 get one if we keep doing this. I said,
0:08 what will the effect of that be? You
0:09 said massive instability in the society.
0:12 What do you mean? Like what will that
0:14 look like? Maybe it would awaken people
0:17 to the threat if they knew what would
0:19 happen in a debt crisis. Well, so if
0:22 you're living on different transfer
0:24 payments or different types of welfare
0:26 benefits, you know, you may not get
0:28 those. M we you know you can't borrow
0:31 more money so you're going to have to
0:32 take what money we spend on other
0:34 government programs and we'll have to
0:35 service our debt. You have to pay it off
0:37 unless we want to go into full default.
0:39 Um and that's where you just say to
0:41 Japan and China and Germany and everyone
0:44 else who's bought those bonds like we're
0:45 not paying. Yeah. Which means you'll
0:47 never float more debt. So you you can't
0:51 you know other than print more money
0:53 which then creates even more
0:55 hyperinflation. So now people can't
0:56 afford anything. I mean, has anyone ever
0:58 defaulted? Any country ever defaulted on
1:00 debt and just said, "We're not paying.
1:01 Come and come and get it." Oh, I'm sure
1:03 they have. I'm not. But that's not
1:05 common. Like, I think it happens enough.
1:07 But what always happens is, you know,
1:09 company countries like the US go there
1:11 and we help them restructure their debt.
1:14 I think that's happened numerous times,
1:16 but no one's going to come and help us
1:18 restructure our debt. No, nobody can. We
1:20 are the again we will lose our position
1:22 of the world's reserve currency and
1:23 we'll lose our ability to print dollars
1:26 that people accept. I mean it's it's
1:28 it's a mar mar mar mar mar mar mar mar
1:28 mar mar mar mar mar mar mar mar mar mar
1:28 mar mar mar marvelous thing that uh we
1:30 just print dollars we can send them
1:32 overseas and people will produce
1:34 products and ship them over here high
1:36 quality products are pretty low cost. I
1:37 think it's one of the reasons we've been
1:38 able to keep inflation in check
1:41 producing all these massive deficits
1:42 over the last couple decades is we do
1:44 import a lot of products. You know,
1:46 we've got, you know, billions of people
1:48 either un or undermployed around the
1:50 world. We provide the capital. You know,
1:53 they produce the factories, they produce
1:54 the goods, and then we we just give
1:57 them, you know, paper. It's it's fiat
1:59 currency. You know, we print it. We keep
2:01 printing it, and it's been working out
2:03 pretty well. At some point in time, that
2:05 that gravy train might stop.
2:07 And then, I mean, then you have like a
2:09 total collapse of the current system.
2:12 Yeah. Again, I I can't I can't predict.
2:15 I'm trying to avoid it. Uh it will be
2:18 painful. Uh you know, and and who who
2:21 really suffers are people at the lower
2:22 end of the income spectrum that have no
2:25 no safety net. They don't have any kind
2:27 of hard assets that will inflate with
2:29 inflation. They're they're just they
2:30 just be destitute.
2:32 A lot of them. Yeah.
2:34 in a country that has no kind of
2:37 organizing principle or national
2:40 identity where people are not as united
2:41 as they were in say 1929. I I had my
2:44 comm staff put together a video. Uh I
2:47 asked them to find all these Republican
2:49 leaders that have you know talked about
2:50 balancing the budget. Uh you know we we
2:53 we have a spending problem. It starts
2:54 out with President Trump saying in the
2:57 State of the Union we're I'm going to do
2:58 something we haven't done 24 years
2:59 balance federal budget. Then every
3:02 Republican leader some form of we don't
3:05 have a revenue problem, we have a
3:06 spending problem. In those clips, we
3:09 have Elon Musk saying if if we don't fix
3:11 this, there won't be money left over for
3:15 anything. And I think that's a pretty
3:17 accurate statement. Does this bill get
3:19 us closer to fixing it? No. It
3:20 exacerbates the problem. How can that
3:23 be? Because we're not serious about
3:25 returning to a reasonable prepandemic
3:26 level spending. We we've picked a number
3:28 out of the air. 1.5 trillion. It's
3:30 totally out of context. There's, you
3:32 know, it's not really related to the the
3:34 moment. It's it's it's missing the
3:36 moment. Can I ask you like who came up
3:39 with that number? Like whose lie is
3:41 that?
3:46 Uh I think my best guess is
3:49 conservatives in the House, who I love,
3:52 uh didn't want to be blamed if this
3:54 thing failed. So they said, "Well,
3:55 listen, in order to in order for us to
3:58 accept a $5 trillion increase in the
4:00 debt ceiling, we've got to get at least
4:02 $1.5 trillion in savings spending cuts."
4:05 I don't think they were looking at the
4:06 big picture. They I think they just
4:08 pulled a big I I criticized them at the
4:11 time privately. I said, "Listen, you set
4:13 the bar way too low, you guys. This is
4:15 completely inadequate. They set the bar
4:17 way too low that it should have been
4:19 easy to meet it, quite honestly. But
4:22 even that was
4:23 difficult be because they didn't go
4:25 through what I would consider the right
4:27 kind of process. So maybe we can shift
4:29 in terms of what we have to do, what I'm
4:31 trying to accomplish here in my digging
4:33 my heels
4:34 in kind of shown us what we can do here.
4:38 We've never had a process to control
4:41 spending the federal government. We
4:42 don't have a balanced budget
4:43 requirement. I I didn't realize this.
4:45 Just found out. Do you know they
4:47 established the appropriation committees
4:49 because the authorizing committees were
4:51 big spenders? So the appropriation
4:53 committees were supposed to be the
4:54 control on the big spenders. Well, that
4:56 didn't work. Uh the budget control act
4:59 of 1974 didn't work. Simpson BS didn't
5:01 work. The budget control act didn't
5:03 work. It did for three years, but then
5:05 we weasled our way around it. So what
5:08 process could possibly work to control
5:10 spending? Well, first of all, you have
5:12 to know the numbers. You have to
5:14 understand, you know, what what a deep
5:16 hole we're in and have a commitment to
5:19 to address it. But Doge has pretty well
5:22 shown us how to do it. I come from the
5:23 private sector. I I think we pro I
5:25 probably spent more
5:27 time either analyzing my department head
5:30 budgets or my own overall company budget
5:32 than Congress in total spends analyzing
5:35 the 7,000 billion budget of the federal
5:38 government. So Doge has shown us if you
5:41 go line by line, contract by contract,
5:44 you will discover and uncover spending
5:47 that if the American public saw it,
5:50 they'd be outraged by it. If you
5:52 eliminated it, my guess is most
5:54 Americans wouldn't even know it's
5:57 eliminated. About the only people that
5:58 would know would be the grifters. Yeah.
6:01 Who have been sucking down the waste,
6:02 fraud, and abuse, the NGO community. So
6:04 So you have you have to go step by step.
6:05 So that's why I've always been
6:07 supportive of a multiplestep
6:08 reconciliation process here. I I was
6:10 always recommending three steps. First
6:12 step, give President Trump the the
6:14 funding on the border, defense, bank,
6:18 $850 billion of real savings, not make
6:20 believe, you know, now. Uh and Lindsey
6:23 Graham agreed to this $85.5 billion each
6:26 year for four years to pay for the four
6:29 years worth of spending. And then extend
6:32 that out 10 years, that gives you 850.
6:34 That's more than half of what the House
6:36 budget reconciliation supposedly gives
6:38 us. Second step, I would just extend
6:40 current tax law. So, a new report, which
6:42 you may not have seen cuz it was
6:43 suppressed, shows the abortion pill is
6:46 10 times more dangerous than the FDA
6:49 claims. Not just dangerous to the baby
6:50 that it kills, but to the women who take
6:52 it. 11% of women who take the pill
6:55 experience quote serious adverse
6:57 effects. Why is this still on the
6:59 market? Huh? because it's abortion
7:02 related and our leaders love abortion.
7:04 It'd be easy to turn that figure into a
7:06 rant about abortion. But there's another
7:08 angle to this debate that's not talked
7:11 about enough. And that's what a blessing
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7:56 If we would have been smart enough in
7:57 2017 had somebody like Chairman Crapo
8:00 who really came up with this idea of
8:02 let's just use current policy for taxes
8:04 then we can make this stuff permanent.
8:06 You should never pass in my mind a tax
8:08 tax law that automatically expires just
8:11 creates all these fiscal cliffs. It puts
8:14 all kinds of uncertaint uncertainty in
8:16 the economy. Why do they do that?
8:17 Because because we so this gets into
8:20 real budget wonkery, but for spending to
8:23 score it, you use current policy, which
8:25 means if a spending program ends, if you
8:28 want to extend it, you just you score it
8:31 based on, oh, it was going to be
8:32 extended anyway, so it doesn't cost
8:33 anything. For taxes though, we use
8:36 current law. So if if the tax cuts are
8:40 ending and you want to extend them,
8:41 well, you you're scoring that on the
8:43 fact that they are going to end. So now
8:44 to extend him, it's going to be a
8:46 trillion dollar score. So then you got
8:48 to pay for it and it's hard to pay for
8:49 it. And so that's how it was all scored
8:51 back in 2017 where we would just use
8:54 current policy. If we use current policy
8:57 now, we can just extend current tax law
8:59 and there's no score. So that's that's
9:01 really what we're doing now. But we have
9:03 to recognize when you're comparing to
9:05 the CBO budget, CBO budgets is assuming
9:08 it does taxes do increase and bring in
9:12 about another $4 trillion worth of
9:13 revenue. So that's why I say the $22
9:15 trillion in in projected deficits is
9:18 probably a rosy scenario. I mean it
9:20 seems like the core problems are just so
9:22 familiar. One is short-term
9:24 thinking and the second is the misplaced
9:27 belief that you can see what the future
9:28 will be and both of those are like silly
9:32 and unwise. Maybe are we bumping up
9:34 against the inherent limits of the
9:35 system? Well, I I would say we're
9:39 missing
9:41 the focusing on the right
9:44 thing. We have to focus on spending.
9:48 And and the reason I say that is
9:49 spending is pretty certain. Again, you
9:52 who knows what revenue you're going to
9:53 bring in. It's hard to predict. Spending
9:56 that's that's pretty easy
9:57 to, you know, predict what that's going
10:00 to be. Plus, I personally voted for
10:03 President Trump because I wanted him to
10:05 defeat the deep state. Yeah. Uh you
10:07 don't defeat the deep state by
10:08 continuing to fund it at Biden's levels.
10:10 Yeah, I know. So again, you when you
10:13 start talking about the controlling the
10:14 deficit, well, you can control the
10:15 deficit by tariff revenue or selling the
10:18 gold card, but that keeps funding the
10:20 deep state. You have to focus on
10:22 spending. And we've we've just gone
10:26 through an unprecedented level of
10:28 increased spending other than World War
10:30 II. And just quick aside on that, we
10:33 entered World War II spending 11.7% of
10:36 our economy of our GDP on federal
10:38 government. 11.7 that got ramped up to
10:41 41% during the war. But by 1948, because
10:45 we had responsible leaders, you know,
10:46 the greatest generation, that actually
10:48 went down to 11.4% of GDP. And we
10:51 returned to pre-war levels. massive
10:53 recession, too. I mean, the the you
10:55 know, the war is over. Let's return to a
10:58 reasonable pre-war level spending. We
11:00 didn't do that during the pandemic. And
11:02 and that's what we have to have to focus
11:04 on do. It's such a reasonable thing to
11:06 do. It should have been done in 2021. We
11:08 didn't do it for four years, but now
11:10 we're just pretty well accepting that
11:11 we're we're accepting the fact that
11:13 Obamacare, now called Medicaid
11:15 expansion, is putting at risk Medicare
11:17 for the the truly vulnerable, even
11:19 though we all ran on repealing and
11:20 replacing that. and obviously failed in
11:22 the first Trump term, but now we're all
11:24 okay with it. Now we're not going to
11:25 touch that cuz they renamed it. Are you
11:29 are you kidding me? Well, this this is
11:30 but this is how it works. Like in 20
11:32 years, we'll be like, "Well, of course
11:33 you have to protect trans kids." You
11:35 know, what seems crazy at first becomes
11:38 accepted and then it becomes the hill to
11:39 die on. It's just like your expectations
11:42 change, right?
11:45 So again, I'm I'm trying to
11:47 force the discussion over the real
11:50 numbers. Okay. And and again, 1.5
11:54 trillion in abstract seems like a lot,
11:57 but we've really ramped up from two from
12:00 2019 to this year. That's over 10 years.
12:03 That's $29 trillion of increased
12:05 spending over 10 years. 29 trillion. And
12:08 we're talking about cutting out 1.5 of
12:10 that. Yeah. It's a joke. It's a joke. Um
12:14 because people don't want to cut it out.
12:15 And so I guess that's my question. And
12:17 you said that the problem with democracy
12:19 is once the majority figures out they
12:21 can just steal money then you know then
12:24 you're just like headed to the cliff and
12:25 there's no pulling back. Are we there?
12:27 Well, again they're they're not stealing
12:28 it. They just don't realize that how
12:30 it's financed is by printing money and
12:33 they can't afford things. They're taking
12:35 other people's
12:36 money called theft. Yeah. They they try
12:38 and tax it but we're not taxing anywhere
12:41 near enough. Right. No. Right. So we're
12:43 going to have to borrow $2.2 $2 trillion
12:45 for the next 10 years every year. Two
12:47 point at least. That's effectively a tax
12:49 because it devalues the money in your
12:51 pocket. So you're basically paying 10
12:53 bucks for a Big Mac and a Coke. So yeah,
12:55 inflation is a silent tax. It's it's
12:56 it's really nasty.
12:59 Do you have any hope?
13:02 I'm not the world's greatest optimist.
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