Latest / Words & Numbers / Episode 441: A Budget Surplus? Really?

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Episode 441: A Budget Surplus? Really? · Words & Numbers

0:00
Hi, I'm James and I'm Anthony. And this is words and numbers.
0:09
Now, before I ask that question that I always ask and never get
0:12
a good answer to anyway, we should take a minute to say
0:15
thank you to our Patreon supporters.
0:18
Yeah, absolutely. They have been with us since we
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started back in, whenever it was, and they're the people who
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keep us going. Yeah, people don't realize there
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are expenses with a podcast and we can't really cover them.
0:34
So it it makes it everything else possible.
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So thank you so much and tell all your friends.
0:42
Now you want to say something about what we're going to be
0:46
doing for our Patreon sponsors now that everybody's getting
0:49
video? Yeah, I guess.
0:52
I guess now's the time. We did.
0:54
We talked yesterday. I guess it was about doing once
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or twice weekly meet up on on the Patreon website which
1:03
apparently has this technology woven in.
1:06
So if aunt ever gives me the login credentials, I will start
1:10
showing up there couple of times a week and maybe aunt can show
1:13
up from time to time as well when his busy schedule elapsed.
1:16
Yeah. And just have a conversation,
1:19
answer questions, whatever. Hang out and you know, if you've
1:22
got a question but don't want to show up in person, e-mail it to
1:26
us. Whatever you like.
1:26
Yeah, absolutely. But our intent here is to is to
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keep giving some premium content to our Patreon subscribers,
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which in the past has always been these videos.
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We just turn the camera on as we're recording now.
1:39
The fly in the ointment is that everybody's getting the video.
1:43
Yeah. And we should, we should also
1:44
say if there's something that you want that you think would be
1:49
possible, tell us. We might do it.
1:51
Yep, absolutely. So, Aunt, what's new and
1:55
exciting in your world this week?
1:57
A listener, John in Virginia, who did not give his last name,
2:02
says an example people often give of corporate malfeasance is
2:07
stock buybacks. In fact, people tend to mention
2:11
this example with no explanation at all, as if it is self-evident
2:15
that something immoral has taken place.
2:18
Can you explain what exactly a corporate stock buyback is and
2:23
why people distrust them so much?
2:26
Is it done with malintent or are people misunderstanding?
2:30
Well, they're misunderstanding. I can answer the first part of
2:32
that question, but I really can't answer the second.
2:34
Part. Go for it.
2:38
All right, stock buybacks happen when a corporation finds itself
2:44
flush with cash and it thinks they're the people who run the
2:48
thing, thinks that the the stocks are low priced, that
2:53
they're they're not selling right this second for what
2:57
insiders think they're worth. So they buy them back, which
3:00
makes every existing share worth more.
3:04
Yeah, yeah. And let me add a note to that
3:07
because my guess is people have the misconception that a stock
3:12
buyback means that you are required to hand in your stock
3:16
to the corporation. That is not the case now, not at
3:20
all. I would imagine there were
3:22
probably some exotic versions of stock that come with buyback
3:28
required buyback options and would be called a call option.
3:33
But that's that's if those things do indeed exist.
3:37
They're a small fraction of the stocks that are out there.
3:39
We talk about stocks, we're talking generally about things
3:42
that are when you buy it, it's yours.
3:44
No one can force you to give it back.
3:46
So what the company is doing is, and you're exactly right, is the
3:50
company looks around, it's flush with cash, it looks around and
3:54
asks the same question any responsible company would ask,
3:58
where are we best able to invest our money?
4:02
And sometimes the answer is in the very company that we're
4:06
running. And, and stocks behave just like
4:10
dollars when there are more of them.
4:12
When the government makes more dollars, they're all worth less,
4:15
right? Well, when there are more shares
4:19
floating around, they're definitionally all worth less.
4:22
And if the company looks and buys them all back, well, now
4:25
they're all worth more. Yeah.
4:26
Now it's not going to buy them all back when actually that does
4:29
that does happen from time to time.
4:31
It's called going private. Yeah, it does happen, but it's
4:34
very rare. We're talking about like
4:36
Coca-Cola right now, right? Things like this.
4:38
Right. And, and now that I say this,
4:41
and we're, we're wandering outside my wheelhouse, but I
4:45
could see that it's possible that if a company went private,
4:48
and the last one that I'm aware of that did was Dell Computer,
4:52
maybe a decade ago, they were publicly traded, you know, you
4:55
could buy their stock in a stock market and Dell went private.
4:59
And my guess is I'm just guessing, so don't quote me, is
5:02
that the board of directors get together, they have a
5:05
stockholders meeting and everybody votes and they say,
5:08
should we go private? That is, will no longer be
5:10
listed on the Stock Exchange. And if the stockholders vote
5:15
yes, then there may well be something required there.
5:18
Now you'd get money back for your stock, but but I wondering
5:21
way out. Yeah.
5:23
Usually at quite a premium. But here's the thing.
5:26
It has to be worth it to the shareholders.
5:28
Oh yeah, yeah, yeah. That's the only reason the
5:30
shareholders would vote for it is because it's worth it to
5:32
them. So this is this is a voluntary
5:35
thing. The company goes out onto the
5:37
Stock Exchange just like anybody else would do it.
5:39
It offers and you know you're if you like the offer you, you're
5:44
free to sell your stock back to the company.
5:47
If not, don't you keep it? But here's the here's the
5:51
interesting thing that I think people miss, that is if if we
5:58
were to prohibit stock buybacks. So suppose we decide this is
6:02
malfeasance, we're going to have a law against it.
6:05
There's an important piece of information we're now preventing
6:10
from getting to the marketplace. That's right.
6:13
I mean who? Because when?
6:14
When Coca-Cola starts buying back their stock, I look at it
6:18
too. Yeah, and who, who better than
6:21
Coca-Cola, is in a position to know what the value of that
6:25
stock really should be? And if if Coke thinks it's great
6:28
and starts buying, I want to know that.
6:31
I want I'm going to at least take a much longer look and what
6:35
I would like to know and what I I honestly have no earthly idea.
6:40
Why do people think this is a bad thing?
6:43
I don't know, it just seems James anymore someone says a
6:47
corporation does X in his evil because it's a.
6:50
Corporation. Yeah, maybe.
6:53
And I think John is right. People talk about this and I've
6:56
heard them talk about other things with regard to
6:58
corporations as if it's just true without any explanation.
7:02
And, and I see this so often, you see it in the movies all the
7:05
time. You talk about the the the
7:08
central character is the evil corporation and say the
7:11
corporation is doing X whatever, X is nobody.
7:14
That's going to kill everyone, even corporation, but then they
7:18
have no customers. Right.
7:19
Yet nobody stops to ask the question.
7:21
Does it make sense for the corporation to do this?
7:28
Anyway, I want to talk about different corporation if you
7:30
don't mind. And it's the corporation for
7:33
Public broadcasting. We don't really, I don't think
7:36
we've ever mentioned PBS on this podcast.
7:39
We haven't, but coincidentally I was reading an article by
7:44
someone who would work for them for like 25 years.
7:47
Is this where you're? Going right, right.
7:49
I am not. I'm going with the United States
7:52
government, Congress and President Trump defunding them.
7:56
Oh, long, long. A Republican goal, right?
8:01
I remember people talking about this back in the 1980s.
8:05
And in the current rescissions package, PBS and NPR are named
8:11
specifically. I think they're going to lose a
8:15
billion or two. They're going to lose a
8:16
significant amount of money. And Needless to say, they came
8:20
out swinging, saying this is a very, very valuable service to
8:24
many Americans who don't get their news any other way.
8:28
And I started scratching my head trying to figure out who the
8:32
hell that could possibly be. And I remembered, I remembered
8:36
the sage words of Homer Simpson back in the finest Simpsons
8:42
episode there ever was, Missionary Impossible, who said,
8:46
and I quote, it's an honor to give $10,000.
8:50
Especially now, when the rich mosaic of cable programming has
8:54
made public television so very, very unnecessary.
8:59
Right. Look, if if PBS is so valuable
9:04
and, and I'll cheerfully admit I've said many times that I
9:07
consume PBS product daily. Every day I wake up, I listen to
9:11
Up first. It's what I do 1st and and I
9:14
happen to love it. If PBS is adding value, then the
9:20
market should provide all the money that PBS needs, right?
9:25
If PBS cannot get from the market the money it needs to
9:29
operate, but instead requires taxation, it's definitionally
9:33
not valuable. Yeah, definitionally and you
9:38
can't, you cannot make any arguments here about well, the
9:42
market wouldn't provide this. The the counter examples there
9:45
are 10s of thousands in all of the cable shows, the for profit
9:50
radio shows. There's plenty of money to be
9:53
made there. Yeah, there is a we, we'd like
9:57
to make it, you know, if anybody out there knows how lowly
10:01
podcasters like us might turn, might turn a profit.
10:04
But you know, this is not a complicated thing.
10:10
And PBS wants you not to look here, but to look over here.
10:14
It's a, it's a beautiful sleight of hand that they're they're up
10:17
to. And it's the same nonsense
10:19
they've been doing for decades. And I think it's, I think it's
10:22
time for PBS to in fact, go private.
10:27
Well, this is. This ties in with the article
10:30
that I was. I just ran across it an hour
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before we were talking by I forget the guy's first name.
10:35
His last name was Berliner. Yeah, it was a great article.
10:39
Yeah, worked for 25 years for NPR and and he said the thing
10:44
changed when he started there. He said, of course, most of the
10:48
people there were left-leaning, but they gave, you know what he,
10:51
in his opinion, balanced coverage, balanced news.
10:55
He said that changed at some point over those decades.
11:00
And you could see the change in, in all of the news, you know, at
11:02
the same time that we moved away from in the old days.
11:06
Walter Cronkite, who just reported the news to.
11:11
Mostly. To the subsequent generations
11:13
that were intent on telling us how we should think about the
11:17
news. Right.
11:18
The, the news became more of a product than a public service on
11:22
the part of of the, the, the networks.
11:25
And look, it was only a public service on the networks because
11:29
Congress said it had to be, right.
11:32
So, you know, there's a lot of fingers in this pie and I don't
11:36
really like any of them as it, as it, as it comes down.
11:40
But, you know, as the mainstream news lurched left, and I, I mean
11:44
it lurched left, that opened the door for Fox News.
11:49
Right. There was a space in the market
11:51
for it. Now, I don't like Fox News any
11:54
more than I like MSNBC, but I generally like that they both
11:59
exist, at least in theory. Yeah, it would be nice to have
12:03
middle of the road balanced, but absent that, I'll take two
12:06
extremes better than one extreme.
12:10
That that's exactly where where I land on this as well.
12:13
Which of course it brings us to the foolishness of the week.
12:16
I usually ask if you have a guess.
12:18
Well, this week I do. Well, you're going to be wrong,
12:22
but go ahead. No, I I know you're going to be
12:26
wrong because it's about somebody you've never heard of.
12:28
OK, no, but my wife was reading an article to me today,
12:32
something about President Trump as he's going off on on Jerome
12:39
Powell, the chair of the Fed. Yeah, said.
12:42
Firing said something to the effect of what idiot hired him.
12:46
Uh huh. Yeah, that's kind of a funny
12:48
answer to that question, isn't it?
12:49
Yeah, yeah. And I mean, if he was being
12:52
tongue in cheek, that actually is quite funny.
12:54
If not, he was incredibly sad. He hired Gerald Bowel.
12:59
Yeah, that's, that's not the answer.
13:02
And I I want to go easy on President Trump for because of
13:07
something we're going to talk about in the main episode.
13:09
I think something good has happened to at least some
13:11
degree. And you know, we always go where
13:15
the data takes us, not where our emotions are.
13:18
So he gets a a free pass from me on the foolishness this week.
13:22
Instead, we go to our rock star and legitimate Guitar Hero.
13:27
Most people don't realize that about him.
13:29
Steve Miller. Have you heard of Steve Miller?
13:32
Oh yeah, sure. Name one song that Steve Miller
13:36
has wrote. Well, that I can't do.
13:38
Yeah, OK. Steve Miller had a a summer tour
13:41
scheduled. I believe it was 28 tour dates
13:44
which he cancelled because he said it's not worth the risk.
13:50
What risk? Yeah, I was hoping you'd ask the
13:54
risk of natural disasters. Where is he playing?
14:01
Nowhere that there's going to be natural disasters.
14:05
It was in it was AUS tour and he thinks that floods and
14:09
earthquakes and and the like are so probable that he couldn't put
14:15
himself, his fans and the the theaters at risk.
14:20
Wow, someone's been watching too much news.
14:24
I'm telling you, that's the dumbest thing I've heard all
14:26
day. Steve Miller cut it out.
14:28
Cut it out. I hope that this is all a lie
14:32
and they're cancelling because ticket sales have been soft.
14:36
Ah, there we go. I I hope that's the right
14:39
answer, because the answer given is so horrifically stupid that I
14:44
I don't know what else to say about it.
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16:11
Anyway, this brings us to the thing I teased just a minute
16:15
ago. Say it ain't so, aunt.
16:17
We're going to say some nice things about the Trump
16:19
administration. Can that possibly be right?
16:22
Well, you are. I'm going to say some neutral
16:24
things. Well, you, you figured out a
16:29
very small number, so we're going to say nice things to the
16:33
degree of what's the number? 3 billion.
16:37
No, the little tiny. Number that what?
16:40
Oh, you. Needed a spreadsheet to
16:41
calculate. Oh yeah, in fact, I had it here
16:44
and did I calculate it equals that divided by that see there's
16:49
so many zeros. This is the sound.
16:51
Of thing. This is the sound of Anthony's
16:54
ultimate happiness to those of you listening.
16:56
That's right, it is wonderful. Tapping away saying divided by
16:59
this times that. It's 8 let's see, 10s hundreds,
17:03
thousands, 8 thousands of 1%. All right, so we've got 8
17:09
thousandths of 1% good news. Yes.
17:14
It's better than bad news. I mean, come on, let's give us
17:19
some credit. In June of 2025, last month, the
17:23
United States federal government had a surplus it.
17:28
Yeah, yeah, it I was. I've I've heard people talking
17:34
about this and I kind of just ignored it for various reasons.
17:38
I'll tell you in a moment, but James Wan do an episode on it.
17:42
So I went and looked up the number and lo and behold, the
17:46
debt did indeed. And remember, the debt is forget
17:49
about the surplus, not the official surplus numbers.
17:52
The gold standard here is the debt.
17:54
Did the debt go up? Did it go down?
17:57
This is the only number that matters.
17:59
Yeah. And this is how.
18:00
And this is how, you know, Bill Clinton did not have a surplus,
18:03
right? That went up every year of not
18:06
only his presidency, but every presidency back to Eisenhower.
18:09
Yeah. And the reason or just take a
18:11
sidestep for a moment, the reason we're having this
18:14
conversation is because the official surplus numbers can be
18:21
maybe. Fudged as.
18:22
Strong of a word that could be massaged.
18:24
You can move money from here to there and call it a revenue or
18:28
what have you. What is black and white, you
18:32
cannot mess with it is the debt number because the government
18:36
has to go to the market to get that.
18:38
There's no internal accounting there.
18:40
And it went down if only infinitesimally.
18:44
Did from June 1 to June 30. Went down by $3 billion.
18:50
It's not nothing. Well, yeah, I mean, people are
18:52
going to point to that and say, look, 3 billion, that's a huge
18:55
number. But we'll go back to our our the
18:59
small number I told you. Yeah, but but.
19:02
But before you do, let's give the devil his due here.
19:05
If that happened every month for a year it that would be great
19:08
news. Well, it would still be kind of
19:12
mediocre news if it happened. The debt.
19:15
The debt. Wouldn't go down much, but we
19:17
wouldn't add anything to it, we'd we'd be subtracting.
19:21
Yes, that's true. You would be subtracting, which
19:23
unto itself is quite a feat. But for the interest, which
19:27
would dwarf the the three billion monthly.
19:30
Oh, there's that. Well, all right, so you want
19:32
some context? Let me give you some context, $3
19:34
billion in debt reduction over the course of 30 days.
19:40
The government spends $3 billion every 15 minutes.
19:45
Right. So it took the government a
19:48
month to save 15 minutes worth of money.
19:51
You are such a spoilser, you just want to ruin everything.
19:57
So go, go ahead, continue to ruin things.
19:59
But it's the, the number is the $3 billion in savings is 8.
20:05
I have to recount to zeros again, 1000 thousand, 810
20:08
thousandths of 1% of the debt, right?
20:13
But as a percentage of the budget, it's much better.
20:17
Yeah, it is. Maybe it probably breaks 1/10 of
20:21
a percent for for the the budget as a whole.
20:25
But here's the thing. Because when people first said
20:27
this, I just ignored it and then it suddenly became a thing when
20:31
I wasn't paying attention. The reason I ignored it is
20:35
because monthly figures when it comes to government spending in
20:41
government tax revenue are pretty irrelevant.
20:44
It doesn't matter. It's like, it's like saying on
20:47
the Friday of the week that you get paid, you know, look at how
20:51
much money I made. Well, OK, but that's because it
20:54
was Friday. It was payday.
20:56
Stretch that out over 2 weeks and it doesn't look that great
20:59
anymore. I haven't had a beer all week.
21:03
Right. Yeah, right.
21:04
Exactly. Sunday at 9:00 AM.
21:08
Yeah, then then Friday night comes and everything is a little
21:11
different. But look, I, I take your point,
21:15
but look, it's not there. There were two things that kind
21:18
of made the rounds in the my sweep of attention this weekend.
21:23
The other one was legitimately stupid.
21:25
It was a bunch of people on the MAGA right saying that inflation
21:31
was 0% in June. Oh my Lord, no, no.
21:35
Inflation actually ticked up in June.
21:38
A touch what they're misunderstanding came because
21:41
the number for June and May were so close it looked the same to
21:46
them, which means 0. Ah, I see, I see.
21:50
Right. It's it's people who don't know
21:51
basic math. It's not even algebra that we're
21:54
talking about here. Yeah, and and you're talking
21:57
about one month. The movement in the price index
22:01
over one month of course is going to be small.
22:03
It's one month. But to to understand it in
22:07
context you got to multiply it by 12.
22:09
Yeah, and they they were claiming 0%.
22:12
I looked into it pretty significantly.
22:14
It looks like it's about 2.7 but but here's here's.
22:18
The thing that that caused me at, at first glance to ignore
22:21
this whole thing, this business about the surplus first came to
22:25
my attention when somebody said, oh, look, this is evidence that
22:29
the tariffs are generating lots of revenue because we got a
22:32
surplus. To which I responded, hang on.
22:35
You're conflating 2 completely different things.
22:38
The surplus is revenue minus spending.
22:42
The tariffs are only impacting revenue.
22:45
So if you want to know what affected tariffs have, don't
22:49
look at the surplus. It's not going to tell you
22:50
anything. You got to look at revenues.
22:54
Right. But revenues did increase
22:56
because of the tariffs. Well. 100 something billion.
23:00
Dollars wasn't it, It was I think it was 27 billion versus
23:05
the year before it was 6. So it's like a 21 billion year
23:11
over year change. So this so June was 21 billion
23:15
more than June of last year was that's tariff.
23:18
Revenue. It shouldn't come as a surprise
23:21
that a tax increase, which is what a revenue tariff is,
23:25
generates revenue. Yeah, it generates, it does
23:29
generate revenue. So you've got that.
23:31
But but here's the problem, We're only looking at a portion
23:34
of the pie. We haven't seen yet the effect
23:38
on personal income on corporate income.
23:42
And both of those things, they're going to lag.
23:44
So it's going to take them a little bit longer to come in.
23:46
But when they do come in, they're going to be lower
23:48
because of the drag that the tariff puts on the economy.
23:52
Right. And and any other thing that
23:55
puts a drag on the economy, right, that gets very
23:57
complicated to just pull out one thing and say there's your
24:01
difference maker. Right.
24:02
And, and furthermore, what are what are conservatives doing
24:06
here? They were constantly pillaring
24:09
liberals, I mean constantly for the past 30 years on this same
24:13
fallacy. You can't.
24:16
Yeah, this is from the 1960s. Forward right, raising taxes,
24:20
raising tax rates generally is not going to increase revenue.
24:25
If you're lucky, revenue will be the same.
24:27
If you're unlucky, revenue is going to decline because you're
24:30
spiking of the taxes is going to slow down the economy.
24:34
Right. We've talked about this a number
24:35
of times, 18%. That's what the government
24:37
collects, no matter what. Yep, Yep, No matter what, it
24:42
doesn't matter. Who's president?
24:43
Doesn't matter what, doesn't matter what party has control of
24:46
Congress, it's going to collect about 18% and people are going
24:50
to find ways to make sure that keeps right on happening.
24:53
Yeah, yeah, because people alter their behavior.
24:57
That's right. And then the government has
24:58
choice to make, although it doesn't perceive it in this
25:01
manner. Do what?
25:02
Do we want 18% of a lot or do we want 18% of less than a lot?
25:08
Yeah, and somehow, somehow, politicians keep coming down on
25:12
the side of 18% of less than a lot.
25:15
Less than a lot and and I want to go back to what you were just
25:18
saying a minute ago and and make it even worse because the
25:22
Republicans for decades have been telling us that we.
25:25
Need to cut taxes, right? Yes.
25:29
That was that was their mantra. How did we end up here where
25:33
we've got the big beautiful bill insert laughter here and, and
25:39
tariffs and nobody's even flinching.
25:44
Where where did the small government conservatives go?
25:47
I can't, I can't find a one. Well, that's not exactly right.
25:51
I think I can find a couple, but you take the point.
25:54
They're, they're, they're an endangered species.
25:57
Yeah. Well, you know, it's
25:58
unfortunate, but but you're, I'm seeing too much on the right of
26:02
what I saw too much of on the left, which is whatever my guy's
26:07
doing is going to work because he's my guy.
26:11
And it's great. Yep.
26:14
And that's a dangerous way to approach anything.
26:18
That's a dangerous way. Who the hell was it?
26:21
It was one of those hacks. It was a Charlie Kirk.
26:25
I believe it was Charlie Kirk who who said, well I'm not going
26:29
to talk about the Epstein thing anymore because my friends in
26:34
government tell me X. First off, if you have friends
26:40
in government, what's wrong with you?
26:45
Second off, if you don't mistrust everyone in power,
26:50
you're not seeing the the picture correctly.
26:54
It doesn't matter what your people say.
26:57
And the Epstein files are kind of the perfect example, right?
27:00
And, and I'm agnostic on the whole thing.
27:03
I'm sure that there are going to be all kinds of people
27:06
implicated if and when this ever comes to light.
27:10
And I'm sure those people are leaning all over everybody who
27:14
has physical control of that information.
27:17
Because what else would they do? What else would they do but to
27:21
think to say out loud that Oh, my guy says it's no big deal
27:26
with Trump ran on making these public right now.
27:30
Now he claims that Barack Obama and Joe Biden wrote made these
27:35
files up. Somehow it's Biden's fault
27:39
again. Words and Numbers is a Civil
27:43
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28:22
It's funny how it's become kind of trite to make comparisons to
28:26
1984, but this was the thing in 1984 of of whoever's in power,
28:33
the party in power switches and all of a sudden you just pretend
28:37
that that whatever arguments you were making before don't apply
28:40
anymore. The other guys arguments now
28:42
apply. Well, it's an interesting
28:44
comparison cause in 1984 there's only one party.
28:48
You're right. Kind of like, kind of like we
28:50
have now. Yeah.
28:52
Except we call them by different names.
28:55
They behave very much the same. But the party would say, no,
28:59
that never happened. We've always been at war with
29:01
Eurasia. And everybody's saying, well,
29:04
all right, Meanwhile, the signs about the war with East Asia are
29:09
still hanging on the walls. Right.
29:12
But now don't worry about it, right?
29:14
Kind of like when? Kind of like when Trump
29:16
supporters say, well he's playing five dimensional chess.
29:20
They add a new number every year, next year to be 6
29:22
dimensional. No, no he's not.
29:26
He's not. It's just that simple.
29:29
You. You raised we, We.
29:32
Started by trying to give him some credit here and look we.
29:35
Both got riled up. You said something a moment ago
29:38
that's that's got me thinking. So here's here's the background.
29:42
We've done you and I have talked about this a lot that if you
29:46
look historically at, you know, over time, this goes back to the
29:50
19, mid 1940s. Look at income taxes, look at
29:56
corporate capital gains taxes, look at corporate taxes, look at
29:59
estate taxes. Every kind of tax the federal
30:01
government applies. Look at periods when it taxes at
30:07
high rates, it taxes periods when it taxes at low rates in
30:11
all the combinations. And the same answer keeps coming
30:14
out over and over and over again, which is the government
30:18
collects a total of 18% of the economy as tax revenue.
30:23
It does fluctuate a bit, but it's, it doesn't fluctuate with
30:27
the tax rates or with what you're taxing is just it's 18% ±
30:32
a little bit of noise. And it it doesn't fluctuate more
30:35
than ±2 points. Right.
30:37
Yeah, yeah, at the maximum, you're down to 16 or up to 20.
30:41
But it's, it's, well, you know, pretty horizontal at that 18%.
30:45
So here's my question. We've had enough of a track
30:51
record here. It's got to be obvious to to
30:55
everybody who deals with taxation that the answer is 18%.
31:00
If that's the answer, why raise taxes?
31:05
Why raise tax rates knowing that you're going to you're going to
31:08
get 18% regardless. In fact, you raise tax rates,
31:11
you slow the economy, so you get 18% of a smaller pie.
31:15
It seems to be the case that if you want to increase government
31:20
revenue, it's very clear cut taxes, cut tax rates and you'll
31:25
get 80% of bigger pie. Now here's my question.
31:28
I'm I'm. Already shaking my head.
31:29
I'm trying to figure out. Already shaking my head.
31:31
What would go on? What would be the motivation
31:34
here? And the only answer I can come
31:37
to is power, that by raising the tax rates, I have more power now
31:43
because I can hand out, I can dole out favors not only in the
31:48
form of money but also in the form of tax relief.
31:52
It's much. Worse than that, too, because
31:54
half of the equation is not taxing your friends, which means
31:59
you get to tax people who are not your friends even more.
32:03
And, and I'm going to bring us all the way back to Plato's
32:06
Republic because it's not always about economics around here.
32:10
The question is, what is justice?
32:13
The very first answer in that book is helping friends and
32:16
harming enemies. Nothing ever changes.
32:23
That was 3000 years ago, for God's sake.
32:27
And you see it everywhere you look right this second.
32:31
Now, it turns out that's not the platonic answer.
32:34
It's just the first answer. And there's something very right
32:37
about it, but it's not complete and it's not correct.
32:42
And yet politicians don't care about being right.
32:47
They care about appearing to be right.
32:51
Yeah. Why else would they go on TV
32:53
every weekend and spew a bunch of talking points?
32:56
Why do we even have the phrase talking points?
33:00
If we had honest politicians, they would go and tell the
33:03
truth. Right.
33:05
Talking point talking points. This is just ridiculous.
33:09
And to to anyone who would push back on you, I say, look, give
33:15
me, give me two politicians who are identical in every way
33:19
except one. The first politician is
33:22
concerned with being right. The second politician is
33:27
concerned with being elected. The second politician's going to
33:30
win. And that, on average, is who
33:33
you're going to have in your Congress, the guys whose primary
33:36
goal it is to win elections. That's how you get Michelle
33:40
Taylor Green on one side and Chuck Schumer on the other.
33:44
Yeah, it's why you have one wrong call over the course of 50
33:49
years. Those two fools are allergic to
33:53
the truth. It's so bad and and yet we
33:57
that's what we now expect and you get the politics you
34:01
deserve. I was going to go there next.
34:04
It's not the politicians who are to blame, it's the voters.
34:09
Everybody who sends their money in or pays attention to them or
34:14
repeats their talking points. Take your pick.
34:16
It's all of it. Right.
34:18
If we're not concerned with being right, they've got no
34:21
incentive to be concerned with it, no.
34:25
And most people are definitely not concerned with being right.
34:28
They they just want to be part of a tribe.
34:32
It's sad, but I understand. I don't know what else to say
34:37
about it because now of course we get to So what the SO.
34:42
What? Yes.
34:44
So let's go, let's go back to where we started.
34:47
It is the case that. The.
34:51
The government had a $3 billion surplus in June.
34:55
No question about that. Now, I claimed that A, it's so
35:01
small is to be almost irrelevant.
35:04
Actually, it is irrelevant. B, it's only one month, so it's
35:09
really not meaningful. In fact, this I would say the
35:12
smallest budgetary time length that is meaningful as 1/4.
35:17
And even then, it's kind of dicey.
35:19
Yeah. But I'm going to look next month
35:21
to see what happens. Yeah.
35:24
It's interesting, right? Can they do it two months in a
35:26
row? Because that's really something.
35:30
Hey, they do it three months in a row.
35:31
That's 1/4. If they can look, it could be
35:35
the case that we're wrong. It could be the case, I'm wrong
35:38
that raising tariffs is actually going to generate revenue.
35:43
It's going to not, it's not going to be too much of A drag
35:46
on the economy. I don't think that's the case,
35:48
but it might be. And I'm I'm interested to watch
35:52
the data and see what happens and let that, let that be the So
35:56
what before you repeat something that you hear, go look at the
36:01
numbers and see if it's actually the case.
36:03
See if it's meaningful. And, and I'll follow right along
36:06
if if it turns out that we end up with three months in a row
36:10
1/4 where we show surpluses, I will be nothing but happy.
36:16
Yeah, absolutely. Absolutely.
36:19
Do I think it? Do I think it's going to happen?
36:21
Not in a million years. Would I be happy to be wrong?
36:25
Immensely? Yep.
36:28
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