Latest / The 47 Morning Update with Ben Ferguson / The Fraud that went to our $40 Trillion Debt plus The Tariff Panic Was Wrong

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The Fraud that went to our $40 Trillion Debt plus The Tariff Panic Was Wrong · The 47 Morning Update with Ben Ferguson

• 0:00
  Speaker 1: There are two things that unified the Democratic Party right now.
• 0:04
  Speaker 1: The first thing I think is a deep loathing for America,
• 0:08
  Speaker 1: for its founding principles, for its culture, its history, and
• 0:11
  Speaker 1: especially its people. And secondly, I think is a deep, visceral,
• 0:16
  Speaker 1: blood curdling hatred for Donald Trump. You can't turn on
• 0:20
  Speaker 1: MSNBC or CNN for more than five seconds before you
• 0:24
  Speaker 1: hear something deranged left wing lunatic screaming Donald Trump's name.
• 0:29
  Speaker 2: You're listening to the forty seven Morning Update with Ben ferguson.
• 0:33
  Speaker 3: Good Saturday morning.
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  Speaker 4: So nice to have you with us on the forty
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  Speaker 4: seven Morning Update, and we've got.
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  Speaker 3: Two big stories for you.
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  Speaker 4: First up, the US government passed the forty trillion dollar
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  Speaker 4: debt marker.
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  Speaker 3: So what helped us get there? Well, a lot of.
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  Speaker 4: It is related directly to waste, fraud and abuse, and
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  Speaker 4: we expose it up. Next, another big story of the
• 0:53
  Speaker 4: media doesn't want you to hear, and that is that
• 0:56
  Speaker 4: the economists and the media got it way wrong with
• 0:58
  Speaker 4: the fear mongering on inflation with President Trump's tariffs. So
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  Speaker 4: what actually happened. We have the numbers for you, and
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  Speaker 4: it's truly shocking. All Right, I want to just take
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  Speaker 4: It's a forty seven morning update and it starts right now.
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  Speaker 2: Story number one.
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  Speaker 4: Our national debt just surpassed forty trillion dollars. Now there's
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  Speaker 4: a question that we all should be asking about that debt.
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  Speaker 4: How much of the money Washington spends is simply being stolen,
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  Speaker 4: wasted and properly paid out, duplicated, or even just mismanaged.
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  Speaker 4: And what is it costing us as taxpayers? When you
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  Speaker 4: start digging into the government's own watchdog reports, the numbers, well,
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  Speaker 4: they're staggering. And we also need to be careful about
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  Speaker 4: one thing. At the very beginning of this, you cannot
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  Speaker 4: honestly say that fraud, wastes, abuse caused forty trillion to
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  Speaker 4: national debt. All right, some of this is just straight
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  Speaker 4: up government spending. Wars, by the way, they cause debt.
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  Speaker 4: Many times recessions cause debt. COVID spending absolutely contribute to
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  Speaker 4: our national debt.
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  Speaker 3: And then there's.
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  Speaker 4: Tax and spending decisions that contribute so security and at
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  Speaker 4: a care costs, and then defense spending also contributed to
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  Speaker 4: our national debt. But fraud and improper payments and inefficient
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  Speaker 4: government have unquestionably added to America's fiscal burden, and the
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  Speaker 4: government's own numbers suggests the scale is enormous. So let's
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  Speaker 4: just start with fraud. This isn't somebody's political estimate. This
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  Speaker 4: comes from the Government Accountability Office and investigative arms of Congress.
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  Speaker 4: The GOA attempted to estimate fraud across the entire federal
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  Speaker 4: government and concluded that Washington loses somewhere between two hundred
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  Speaker 4: and thirty three billion and five hundred and twenty one
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  Speaker 4: billion every year to fraud alone.
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  Speaker 3: Now, let me repeat.
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  Speaker 4: That potential federal fraud losses two hundred and thirty three
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  Speaker 4: billion on the low end, five hundred and twenty one
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  Speaker 4: billion on the high end, every single year. Now, the
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  Speaker 4: GOA also based that SA on fiscal years twenty eighteen
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  Speaker 4: through twenty twenty two, and said fraud represents about three
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  Speaker 4: to seven percent of the average federal obligations during that period. Now,
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  Speaker 4: if you want to think about that, that would be
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  Speaker 4: five hundred and twenty one billion. That's approximately one point
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  Speaker 4: four to three billion lost to fraud every day, or
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  Speaker 4: nearly sixty million to fraud alone every hour, or one
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  Speaker 4: million every minute. In this country, we are spending on
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  Speaker 4: fraud and abuse. Another way of looking at it, every second,
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  Speaker 4: the US government is being bamboozled out of sixteen thousand,
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  Speaker 4: five hundred dollars every second. That's what someone is stealing
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  Speaker 4: from taxpayers. Now imagining it happening the next second, and
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  Speaker 4: the next second, and the next and then twenty four
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  Speaker 4: hours later, you're in debt so far as a country
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  Speaker 4: that you don't even know what to do to get
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  Speaker 4: out of it. Well, that's what we've been doing, folks,
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  Speaker 4: and fraud isn't the whole problem. Then you've got another
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  Speaker 4: section that's costing you an agreed to amount of money
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  Speaker 4: and debt, and that is under the category of improper payments.
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  Speaker 4: Now there's an important distinction here. Fraud means intentional deception.
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  Speaker 4: An improper payment doesn't necessarily mean somebody committed a crime.
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  Speaker 4: It can simply just mean the government paid the wrong person,
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  Speaker 4: or paid the wrong amount, or couldn't document that a
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  Speaker 4: payment was proper or made a payment that shouldn't have
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  Speaker 4: been made at all. But from the taxpayer's perspective, there's
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  Speaker 4: still a basic question, why is Washington d C.
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  Speaker 3: Sending out money that shouldn't.
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  Speaker 4: Be going out? Well, I can answer that question. Unfortunately,
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  Speaker 4: the GOA says it. Since the fiscal year two thousand
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  Speaker 4: and three, federal agencies have reported approximately two point six trillion.
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  Speaker 4: I didn't say billion, I said two point six trillion
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  Speaker 4: since two thousand and three. In improper payments, it's not fraud.
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  Speaker 4: These are just dumb payments two point eight trillion dollars.
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  Speaker 4: The g ALA warned the actual total could be significantly
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  Speaker 4: higher because those estimates cover only a subset, they say,
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  Speaker 4: of federal programs. Now, let's just go back to the
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  Speaker 4: fiscal year twenty twenty four. Just sixteen federal agencies reported
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  Speaker 4: approximately one hundred and sixty two billion in improper payments
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  Speaker 4: across sixty eight programs, and roughly seventy five percent of
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  Speaker 4: those improper payments, or one hundred and twenty one billion,
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  Speaker 4: were concentrated in just five program areas. So now understand
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  Speaker 4: something else critical. You cannot add five hundred and twenty
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  Speaker 4: one billion in fraud to one hundred and sixty two
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  Speaker 4: billion in improper payments and call the result the government's
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  Speaker 4: total waste. There is overlap because fraudulent payments are a
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  Speaker 4: type of improper payment. But either way, these numbers demonstrate
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  Speaker 4: an enormous problem. It's now connecting us to the forty
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  Speaker 4: trillion dollar mess that we're in our national debt. And
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  Speaker 4: if you look at America, just imagine if we could
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  Speaker 4: eliminate just the low end of the goa's estimated annual
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  Speaker 4: fraud losses. Now, the low end, they say it's two
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  Speaker 4: hundred and thirty three billion over ten years, ignoring inflation
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  Speaker 4: and other changes, that would literally mean we would save
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  Speaker 4: two point three three trillion dollars. At the high end,
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  Speaker 4: five hundred and twenty one billion annually, you're talking about
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  Speaker 4: five point two trillion over a decade. Now, that doesn't
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  Speaker 4: mean eliminating the fraud would magically erase the five trillion
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  Speaker 4: of existing national debt. These numbers cover different years, fraud
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  Speaker 4: varies over time, and eliminating one hundred percent of fraud
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  Speaker 4: is well, I hate to say it, but incredibly unrealistic.
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  Speaker 4: But what it does show you is the scale of
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  Speaker 4: the opportunity. Because Washington just crossed forty trillion in debt
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  Speaker 4: while its own watchdog it says potentially hundreds of billions
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  Speaker 4: of dollars are being lost to fraud every year in America.
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  Speaker 4: And then there's a government duplication and waste. The GOA
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  Speaker 4: has spent years examining federal programs that overlap, duplicate ones,
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  Speaker 4: and others operating another side indefinitely, and in the goa's
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  Speaker 4: most recent report from twenty twenty six, they said it
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  Speaker 4: is clear that this is in of epidemic proportions now
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  Speaker 4: seven hundred and seventy four billion and financial benefits. That's
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  Speaker 4: three quarters of a trillion dollars money. That demonstrates something
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  Speaker 4: very important. Waste reduction isn't theoretical. The government has already
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  Speaker 4: proven it can find and eliminate massive efficiencies, but the
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  Speaker 4: GOAO says that there are still six hundred and ten
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  Speaker 4: remaining recommendations and matters for Congress and the agencies to
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  Speaker 4: look at, and implementing all of this could also produce
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  Speaker 4: another one hundred billion or more in financial benefits. You
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  Speaker 4: just think about that for a second. Well, it's insane.
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  Speaker 4: We have forty training in debt, we're paying enormous amounts
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  Speaker 4: of interest on that debt, and our government auditors are
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  Speaker 4: effectively saying, here are opportunities to save another one hundred
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  Speaker 4: billion dollars or more. So, why are they not moving forward?
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  Speaker 4: Only Democrats can answer that question. But one thing's for sure,
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  Speaker 4: Democrats and Republicans are the ones that ran up this bill.
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  Speaker 4: It wasn't just the Democrats that gave us forty trillion
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  Speaker 4: dollars in debt. It is obvious that we've got a
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  Speaker 4: problem in the political world where the people there, well,
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  Speaker 4: they just want to spin us into oblivion and kick
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  Speaker 4: the can down the road.
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  Speaker 3: Next story number two, I want to take you back
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  Speaker 3: in time to win.
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  Speaker 4: The media, the economists and the Democrats said that Donald
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  Speaker 4: Trump's tariffs were going to absolutely destroy you, the consumer
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  Speaker 4: in the United States of America.
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  Speaker 3: It was going to destroy American businesses.
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  Speaker 4: And the President said, no, that's not going to happen,
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  Speaker 4: and we're using it as leverage and it's going to
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  Speaker 4: be okay. Well, we now have enough time between when
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  Speaker 4: those tariffs started in reality and now what we're seeing
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  Speaker 4: is that the media was yet again lying to you
• 11:16
  Speaker 4: nothing but fear mongering and propaganda. Now economists are finally
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  Speaker 4: coming to grips with the reality the President Trump's tariffs
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  Speaker 4: and his policies in fact did not have the inflationary
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  Speaker 4: effects that they had predicted. Let me say that again,
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  Speaker 4: they did not have the inflationary effects that they promised
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  Speaker 4: was going to happen. But the reason why, I may
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  Speaker 4: be even more challenging to the widespread assumption that tariffs
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  Speaker 4: caused the economy to become less efficient. Research that's now
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  Speaker 4: been published by the Federal Reserve Bank of Boston on Wednesday,
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  Speaker 4: finds that a productivity growth accelerated in industries most heavily
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  Speaker 4: affected by tariffs, and that this largely offset the higher
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  Speaker 4: costs that firms in those industries faced.
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  Speaker 3: Quote.
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  Speaker 4: Industries in which tariffs introduced higher costs in twenty twenty
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  Speaker 4: five also experienced greater labor productivity growth, which helped them
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  Speaker 4: mitigate those higher costs. The researchers explained. Now, the paper
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  Speaker 4: assumes that firms passed through higher production costs to their customers,
• 12:27
  Speaker 4: which is not really a safe assumption at all. Companies
• 12:30
  Speaker 4: facing higher costs for components and materials or finished products
• 12:35
  Speaker 4: often accept narrower margins to preserve market share. In fact,
• 12:40
  Speaker 4: few businesses can safely assume that every additional dollar of
• 12:45
  Speaker 4: costs can simply be added to the price paid by
• 12:48
  Speaker 4: the customer. Yet, even with full pass through firmly embedded
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  Speaker 4: in the model, the Boston FED researchers found that quote
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  Speaker 4: tariffs had a much smaller inflat sationary effect that might
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  Speaker 4: be expected because companies improve productivity to mitigate the higher costs.
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  Speaker 4: Productivity increased, and thirty seven of the sixty three industries
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  Speaker 4: studied across the economy the researchers calculated that productivity growth
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  Speaker 4: reduced production costs by one point three percent and wound
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  Speaker 4: up subtracting zero point nine percentage points from the core
• 13:27
  Speaker 4: personal consumption expensure inflation. Now that may sound complicated you,
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  Speaker 4: it's really not. What it means is the tariffs themselves
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  Speaker 4: raised domestic production costs by an estimated one point one percent.
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  Speaker 4: That again is coming from the Federal Reserve researchers. Now,
• 13:44
  Speaker 4: after including the effects of tariffs on both directly imported
• 13:48
  Speaker 4: goods and domestically produced goods, guess what the Federal Reserve
• 13:53
  Speaker 4: researchers found. Well, they calculated that tariffs added one point
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  Speaker 4: four percentage points to core PCE inflation productivity, then erase
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  Speaker 4: zero point nine points of that And what does that mean, Well,
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  Speaker 4: it was leaving a net core contribution of just zero.
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  Speaker 3: Point five points.
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  Speaker 4: Productivity gains US strongly offset the increase in consumer prices
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  Speaker 4: induced by tariffs, the researchers found in their statement. Now,
• 14:23
  Speaker 4: there's even more to this story, but before we get
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  Speaker 3: All right, now, back to this report.
• 16:03
  Speaker 4: What is very different is the story from the warnings
• 16:06
  Speaker 4: that the tariffs would, as they were described by the
• 16:09
  Speaker 4: media on the left, reignite massive inflation and prevent the
• 16:13
  Speaker 4: Federal Reserve from returning inflation to its two percent target.
• 16:16
  Speaker 4: Now core PCEE inflation was around three percentage points in
• 16:20
  Speaker 4: twenty fifteen. The Boston Fed estimates that normal wage growth
• 16:25
  Speaker 4: contributed one point nine percentage points, nearly four times the
• 16:29
  Speaker 4: net contribution of tariffs after productivity is taken into account.
• 16:34
  Speaker 4: In other words, tariffs cannot plausibly bear most of the
• 16:37
  Speaker 4: blame for inflation remaining elevated, even under the assumption of
• 16:43
  Speaker 4: complete pass through. Now, more tariffs mean better productivity. The
• 16:49
  Speaker 4: striking findings is that the industry is most exposed to
• 16:52
  Speaker 4: tariffs also tended to experience the largest productivity gains. The
• 16:57
  Speaker 4: paper stopped short of claiming that tariffs cast as the
• 17:00
  Speaker 4: productivity gains, but there's good reason to believe that they
• 17:03
  Speaker 4: played a very important role if you just look at
• 17:06
  Speaker 4: the competitive pressure to keep prices low. What happened is
• 17:10
  Speaker 4: firms had a choice between accepting lower profits and then
• 17:14
  Speaker 4: finding ways to become more efficient. Some invest in new
• 17:17
  Speaker 4: equipment or even reorganized production. Less productive firms may have
• 17:22
  Speaker 4: left the market, shifting production towards more efficient competitors. Businesses
• 17:27
  Speaker 4: also reduced labor inputs while maintaining their production as well. Now,
• 17:31
  Speaker 4: the findings also fit with a San Francisco FED paper
• 17:35
  Speaker 4: published last year. They examined one hundred and fifty years
• 17:38
  Speaker 4: of tariff policy, and that study found that tariff increases
• 17:43
  Speaker 4: historically lowered inflation while raising unemployment, which could well be
• 17:49
  Speaker 4: explained by firms raising productivity and therefore needing less labor.
• 17:53
  Speaker 4: Its authors argued that tariffs often operate like negative demands shocks,
• 17:58
  Speaker 4: because uncertainty and falling asset prices reduce spending as well
• 18:02
  Speaker 4: as investment. Now, the Boston FED has now identified another
• 18:07
  Speaker 4: potential channel as well. Firms responded to terris by lowering
• 18:11
  Speaker 4: unit costs. What does that mean lowering prices for the
• 18:15
  Speaker 4: consumer that would be you. Now you look at this
• 18:19
  Speaker 4: whole story and what the takeaway is this the fear
• 18:23
  Speaker 4: mongering that everyone was doing with the Democratic Party in
• 18:27
  Speaker 4: the media try to make you think that Donald Trump
• 18:30
  Speaker 4: had lost his mind, Well, they flat out relying to you,
• 18:34
  Speaker 4: and now they've been busted the lot. One thing's for sure,
• 18:37
  Speaker 4: they are not going to tell you that they got
• 18:41
  Speaker 4: it wrong. And that's exactly why we're doing this show
• 18:44
  Speaker 4: right now.
• 18:44
  Speaker 2: Thank you for listening to the forty seven Morning Update
• 18:47
  Speaker 2: with Ben Ferguson. Please make sure you hit subscribe wherever
• 18:51
  Speaker 2: you're listening to this podcast right now and for more
• 18:54
  Speaker 2: in depth news, also subscribe to the Ben Ferguson podcast
• 18:58
  Speaker 2: and we will see you back you are on Monday morning.