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