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The Deficit Delusion Stealing Your Future - John Tamny #6297 · Financial Survival Network

• 0:00
  Speaker 1: What entity in society doesn't borrow more once it's taking
• 0:04
  Speaker 1: in more revenue, And so they're thinking that the debt
• 0:07
  Speaker 1: is the problem as opposed to just the extraction in
• 0:10
  Speaker 1: the first list, and say we can fix the problem
• 0:13
  Speaker 1: by raising more revenue, getting more revenue to the US Treasury.
• 0:17
  Speaker 1: It's just unbelievable. So yeah, in a since the delusions
• 0:20
  Speaker 1: are endless, I call it the deficit delusion.
• 0:22
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• 0:25
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  Speaker 2: Financial Survival Network now more than ever.
• 0:49
  Speaker 3: And welcome.
• 0:50
  Speaker 4: You are listening to and watching the Financial Survival Network.
• 0:54
  Speaker 4: I'm your host Carrie Let's. John Tamney is with us now.
• 0:57
  Speaker 4: He runs a real clear markets, author of a new
• 1:02
  Speaker 4: book which we'll be talking about called Deficit Delusion, Delusions,
• 1:08
  Speaker 4: Delusion Delusion. Okay, but there are multiple delusions out there,
• 1:13
  Speaker 4: no doubt. There's no shortage of delusions in our modern
• 1:17
  Speaker 4: world here, No, John, you know, John, you and I
• 1:21
  Speaker 4: we spoke did a few interviews with you way back
• 1:26
  Speaker 4: in twenty twelve, twenty eleven. The world's changed quite a
• 1:31
  Speaker 4: bit since then. But let's talk about deficit delusion or
• 1:36
  Speaker 4: delusions first. What is the biggest delusion about the deficit?
• 1:41
  Speaker 1: That the crisis is ahead? All left, right and supply
• 1:46
  Speaker 1: side talk about is well yet really bad and we
• 1:50
  Speaker 1: better they're eventually they're gonna not be so kind to
• 1:54
  Speaker 1: us the rest of the world, and that's the crisis.
• 1:57
  Speaker 1: And I'm thinking, have you guys lost your minds? The
• 2:01
  Speaker 1: crisis is not a future thing. It's not a future
• 2:05
  Speaker 1: when when lenders decide that they don't want to lend
• 2:08
  Speaker 1: the United States anymore, now that's kind of a good thing.
• 2:10
  Speaker 1: When people cut off government. The crisis is in here
• 2:15
  Speaker 1: and now, I mean it's unseen, but it's in how
• 2:19
  Speaker 1: much more advanced we'd be if government weren't consuming so
• 2:22
  Speaker 1: much in the way of precious resources.
• 2:25
  Speaker 3: It's in.
• 2:28
  Speaker 1: What the grandchildren here, these the left, right and supplic side,
• 2:31
  Speaker 1: they say, oh, well, yeah, they're going to inherit all
• 2:33
  Speaker 1: this debt that's so awful and we're having a good
• 2:36
  Speaker 1: time at the expense of them. Where's the good time
• 2:40
  Speaker 1: in government spending, it's a bad time. It's the central
• 2:45
  Speaker 1: planning of precious resources. So that's the crisis, but you
• 2:48
  Speaker 1: can't see it because you don't see how much more
• 2:49
  Speaker 1: advanced we be without it. The burden for the grandchildren
• 2:53
  Speaker 1: is that we leave them a much less evolved world
• 2:56
  Speaker 1: and even more challenging. We leave them a much bigger government.
• 3:00
  Speaker 1: This focus on the debt is just so childish, and
• 3:03
  Speaker 1: it works in saying that the crisis in the future.
• 3:07
  Speaker 1: It's it's these different economic religions basically saying, yeah, markets
• 3:12
  Speaker 1: are incredibly stupid. They can't see what we can all see.
• 3:15
  Speaker 1: They can't see the crisis that's ahead. I mean, it's
• 3:17
  Speaker 1: just mindless.
• 3:19
  Speaker 4: You know, I totally agree with you, because every dollar
• 3:23
  Speaker 4: that the government spends, it's taken from from the people,
• 3:28
  Speaker 4: from the businesses that could arguably be spent a lot
• 3:32
  Speaker 4: more efficiently.
• 3:34
  Speaker 3: And you know that you're right.
• 3:36
  Speaker 4: The crisis has been ongoing arguably since FDR and when
• 3:42
  Speaker 4: the when the country really ran off the rails, you know,
• 3:47
  Speaker 4: when when personal responsibility took a backseat to government largesse.
• 3:54
  Speaker 4: And as like we can point to the Hoover Dam,
• 3:57
  Speaker 4: we can point to a lot of bridges and.
• 4:00
  Speaker 3: Tunnels that were built.
• 4:01
  Speaker 4: We could also point to a lot of post offices
• 4:04
  Speaker 4: that were built that are basically houses for human non productivity.
• 4:12
  Speaker 1: It's also true I like how you fit at houses
• 4:15
  Speaker 1: for human non productivity. I would throw into that. One
• 4:19
  Speaker 1: of the things that somebody I'd like to raise money
• 4:21
  Speaker 1: for is the Museum of the Unseen and literally take
• 4:26
  Speaker 1: it around the country and I think you can get
• 4:28
  Speaker 1: good publicity for it, and just people show up and
• 4:31
  Speaker 1: there's nothing in there. And that's kind of the point.
• 4:36
  Speaker 1: It's what we're not doing yet. No matter the economic religion,
• 4:42
  Speaker 1: it's always a future problem. And so they focus on
• 4:45
  Speaker 1: balanced budgets as though that matters. No, what matters is
• 4:49
  Speaker 1: how much they extract to balance the budget. In the
• 4:53
  Speaker 1: United States, it's the accomplishment equivalent of slam dunking on
• 4:57
  Speaker 1: a six foot basket if you're seven feet tall. I mean,
• 5:00
  Speaker 1: you're extracting from the most productive people on Earth. Balance
• 5:05
  Speaker 1: budget misses the point. It's about how much they extract
• 5:08
  Speaker 1: every year, and they extract too much from us. That's
• 5:11
  Speaker 1: why we have so much debt. I've never heard of
• 5:13
  Speaker 1: an entity that can borrow so much unless it's taking
• 5:17
  Speaker 1: so much in the first place. That's the people trust
• 5:19
  Speaker 1: the debt. Yet left, right and supply side keep talking
• 5:22
  Speaker 1: about how, no, we need to fix the debt problem,
• 5:26
  Speaker 1: we need to raise more revenue. I mean, have they
• 5:28
  Speaker 1: lost their minds? What entity in society doesn't borrow more
• 5:33
  Speaker 1: once it's taking in more revenue. And so they're thinking
• 5:36
  Speaker 1: that the debt is the problem as opposed to just
• 5:39
  Speaker 1: the extraction in the first place. Say we can fix
• 5:42
  Speaker 1: the problem by raising more revenue, getting more revenue to
• 5:45
  Speaker 1: the US Treasury. It's just unbelievable. So yeah, in a sense,
• 5:49
  Speaker 1: the delusions are endless. I call it the deficit delusion.
• 5:52
  Speaker 4: Yeah, so true, because it's a symptom of out of
• 5:55
  Speaker 4: control government. So I just wrote an article because I
• 5:59
  Speaker 4: know this case is coming. I don't know how it's
• 6:02
  Speaker 4: going to come to the Supreme Court. And that is
• 6:05
  Speaker 4: the impoundment, the ICA impoundment, the Control Act of nineteen
• 6:11
  Speaker 4: seventy four, which basically, and I gave this example, if
• 6:14
  Speaker 4: Congress decides that they want to create a monument to
• 6:22
  Speaker 4: basically the tomb of the faceless bureaucrat and in honor
• 6:28
  Speaker 4: of them screwing up our lives, messing up, you know,
• 6:32
  Speaker 4: failing to grant permits all this, and then they're going
• 6:35
  Speaker 4: to have a bonfire that runs twenty four to seven
• 6:39
  Speaker 4: and they're going to feed it with freshly minted one
• 6:41
  Speaker 4: hundred dollars bills from the Federal Reserve, and they mandate
• 6:46
  Speaker 4: that this bonfire must be kept going twenty four to
• 6:49
  Speaker 4: seven in perpetuity. Under the Impoundment Control Act of nineteen
• 6:55
  Speaker 4: seventy four, the President's required to light the match. I mean,
• 6:59
  Speaker 4: it's absurd, but that case is coming. And that case,
• 7:04
  Speaker 4: if we have somebody who actually wants to cut government
• 7:07
  Speaker 4: spending and cut the scale of it back, it's going
• 7:10
  Speaker 4: to go in favor of the president. We'll see what
• 7:13
  Speaker 4: he does with that newfound power.
• 7:15
  Speaker 1: Well, the only thing I would say, though, in response
• 7:18
  Speaker 1: to you, is that so what I mean. I'm not
• 7:21
  Speaker 1: I'm not making a comment on whether it's constitutional or not.
• 7:26
  Speaker 1: I'm just saying cut spending. That that's like, that's not
• 7:30
  Speaker 1: going to shrink government, and it's not going to shrink government.
• 7:33
  Speaker 1: It's like, if you spend less, there's not less consumption
• 7:37
  Speaker 1: in society. You're just what you don't spend is shifted
• 7:40
  Speaker 1: to someone else through whatever financial intermediaries you use. When
• 7:45
  Speaker 1: governments don't spend or when they shrink a program, the
• 7:49
  Speaker 1: money doesn't disappear, it just goes to something else. And
• 7:53
  Speaker 1: so I make the argument in the book, I don't
• 7:56
  Speaker 1: I reject your point that we have out of control government. No,
• 8:00
  Speaker 1: what we have is a government that takes in too
• 8:02
  Speaker 1: much revenue. And because it takes in too much revenue,
• 8:05
  Speaker 1: it can borrow with these and it can borrow an
• 8:08
  Speaker 1: enormous amounts because markets are a look into the future.
• 8:10
  Speaker 1: As we both agree, the markets know that the revenue
• 8:13
  Speaker 1: is going to grow, grow and grow. And so the
• 8:15
  Speaker 1: problem is over taxation of Americans, that people would spend
• 8:20
  Speaker 1: the gobs of money that flow to them as a
• 8:23
  Speaker 1: statement the obviously, but if you cut spending, which oh,
• 8:26
  Speaker 1: if we just cut, if those can just get too
• 8:29
  Speaker 1: trillion out of it, that would just free up two
• 8:32
  Speaker 1: trillion for them to dream up new really awful ideas
• 8:35
  Speaker 1: with the problem is too much revenue.
• 8:37
  Speaker 4: And the problem is that the system Congress totally in
• 8:42
  Speaker 4: charge of spending money and the president has no say
• 8:47
  Speaker 4: over it whatsoever under that ICA Act. I'm not saying
• 8:52
  Speaker 4: if he did, and if he wanted to change it,
• 8:56
  Speaker 4: then he could. But if he doesn't have control he
• 9:00
  Speaker 4: does want to change it, he has no power. If
• 9:03
  Speaker 4: he has control and he doesn't want to change anything,
• 9:06
  Speaker 4: then nothing is going to change. But the look, they've
• 9:09
  Speaker 4: already violated that Act numerous times, like hundreds of times
• 9:15
  Speaker 4: with Doge. And I'm not saying it's the cure all
• 9:18
  Speaker 4: for the court to rule it unconstitutional. But if we
• 9:24
  Speaker 4: do get a president who wants to cut spending, and
• 9:27
  Speaker 4: I'm not convinced that the current occupant is the one
• 9:29
  Speaker 4: to do that, then at least he might have the
• 9:33
  Speaker 4: tools to do it. Don't forget the last impeachment of
• 9:37
  Speaker 4: Trump was brought under the Impoundment Control Act. When they
• 9:42
  Speaker 4: said he didn't send the money to Ukraine. That was
• 9:46
  Speaker 4: part of the basis for that. He didn't spend the
• 9:49
  Speaker 4: money that they told him to spend, and that was
• 9:51
  Speaker 4: somehow a high crime and a misdemeanor.
• 9:54
  Speaker 1: Now, look, I like it until I'm reminded of Let's
• 9:58
  Speaker 1: say we cut spending, we haven't cut the flow of
• 10:01
  Speaker 1: revenue into the government. See, even if you could shrink
• 10:04
  Speaker 1: spending for a year or two, it wouldn't change anything.
• 10:07
  Speaker 1: The problem is too much revenue now and wait, too much.
• 10:10
  Speaker 3: Part of it.
• 10:11
  Speaker 4: It's all interconnected, and it's all being stolen here, John,
• 10:15
  Speaker 4: let's face it. They call it fraud, abuse, waste. I
• 10:18
  Speaker 4: call it theft, all right, theft that comes in the
• 10:23
  Speaker 4: form of a ten forty tax return.
• 10:27
  Speaker 1: Yeah, it's a tough one because the government is us.
• 10:30
  Speaker 1: We allowed this to happen, and so it's hard for
• 10:33
  Speaker 1: me to say it's theft. We keep voting for it.
• 10:35
  Speaker 1: But I look, I think we have similar goals here.
• 10:39
  Speaker 1: I think we something similar that the crisis is in
• 10:45
  Speaker 1: what were the advances that are not happening? And it's
• 10:49
  Speaker 1: not even a question of arguably less efficient. Of course,
• 10:51
  Speaker 1: government spending is less efficient, and because it's such a
• 10:56
  Speaker 1: size consumer of precious wealth, we always have to wonder
• 11:00
  Speaker 1: what we're not achieving as a consequence.
• 11:04
  Speaker 4: And that is the real crime here. Because you and
• 11:08
  Speaker 4: I agree on this one hundred percent. If government had
• 11:12
  Speaker 4: stayed at the level it was at before Roosevelt, right,
• 11:18
  Speaker 4: even if it had gone up slightly from there, the
• 11:22
  Speaker 4: amount of wealth that this country would possess would just
• 11:27
  Speaker 4: be astounding. It would far exceed any other, even the
• 11:32
  Speaker 4: United States pre World War One, because those every dollar
• 11:37
  Speaker 4: that the government spends is a lost opportunity for the
• 11:42
  Speaker 4: person that's paying it.
• 11:43
  Speaker 1: Right, absolutely absolutely, and you're so right, And I just
• 11:47
  Speaker 1: I think it's important the way that you describe it. Again,
• 11:50
  Speaker 1: think of how left, right and supply side do it.
• 11:52
  Speaker 1: It's always we better do this because the crisis may happen.
• 12:00
  Speaker 1: They've never sold anything in their lives. I mean, I
• 12:02
  Speaker 1: can't think of a more loser approach, unpersuasive approach, because
• 12:06
  Speaker 1: people can say, well, yeah, you've been saying that forever
• 12:09
  Speaker 1: and it's never comes true. But it should be an
• 12:12
  Speaker 1: optimistic sale in that Gosh, think of what we could
• 12:15
  Speaker 1: be doing. Think of as prosperous as we are, and
• 12:17
  Speaker 1: we're the richest country on earth, were amazing, Think how
• 12:21
  Speaker 1: much more prosperous, more advanced we would be the present,
• 12:25
  Speaker 1: if we were at levels from the nineteen thirties would be.
• 12:29
  Speaker 1: It would make the present look Bangladesh by comparison. We're
• 12:32
  Speaker 1: nowhere close to what we could achieve.
• 12:35
  Speaker 4: Yeah, that is the crime, and unfortunately it's a silent crime.
• 12:40
  Speaker 3: Yeah, it's unseen, we don't know, no one knows.
• 12:43
  Speaker 4: It what we could have been had the government not
• 12:47
  Speaker 4: metastasized into its current form. So Let's talk about something though,
• 12:53
  Speaker 4: because we were talking about a pre call. Your attitude
• 12:58
  Speaker 4: towards your own life. Really, whether you're optimistic towards your
• 13:02
  Speaker 4: own life or pessimistic, is going to carry over to
• 13:06
  Speaker 4: your attitude towards what you expect the government to be.
• 13:10
  Speaker 4: And I remember there was a guy, Howard Schultz, I
• 13:14
  Speaker 4: think his name was. He wrote a newsletter called the
• 13:17
  Speaker 4: One Armed Economist after something FDR once said, and he
• 13:22
  Speaker 4: basically said, when we have a depression, it's really massive
• 13:27
  Speaker 4: mental depression on the part of the population. The majority
• 13:31
  Speaker 4: just get very pessimistic, and then the economy follows suit.
• 13:36
  Speaker 4: So is this a chicken and egg situation here, John,
• 13:39
  Speaker 4: or is there something to this?
• 13:42
  Speaker 3: Okay?
• 13:43
  Speaker 1: So I don't think I would have to convince you
• 13:46
  Speaker 1: that what drives economic growth isn't consumption. It's savings, as
• 13:52
  Speaker 1: in entrepreneurs mows with savings. Yeah, nothing new to you there.
• 13:57
  Speaker 1: And so there's always been this belief out there that, well,
• 14:00
  Speaker 1: you know, the media can talk us into a recession.
• 14:04
  Speaker 1: They'll tell us that things are going to get bad,
• 14:07
  Speaker 1: and economists say, well, yeah, then people will stop spending
• 14:10
  Speaker 1: and oh boy, the economy is going to be desperate.
• 14:13
  Speaker 1: But as you and I know, it's the lack of
• 14:16
  Speaker 1: spending that feeds new ideas. That's not to say that
• 14:21
  Speaker 1: people won't consume. We're wired to consume.
• 14:24
  Speaker 3: That's the easy part.
• 14:24
  Speaker 1: But if we're spending less, that just frees up capital
• 14:27
  Speaker 1: more for businesses and new ideas. And so I've always
• 14:31
  Speaker 1: felt that recessions are self correcting in that way for
• 14:35
  Speaker 1: reasons beyond if people are really worried a they're fixing
• 14:38
  Speaker 1: what they're doing wrong. Recessions signal the recovery, but they
• 14:42
  Speaker 1: also signal the recovery in that Okay, I'm going to
• 14:45
  Speaker 1: pull back for a time, I'm nervous about what's ahead.
• 14:47
  Speaker 1: I'm going to pull back, and that kind of fruit
• 14:49
  Speaker 1: that builds up the capital base for recovery. And so
• 14:53
  Speaker 1: I don't think mental can drive depressions. But I think
• 14:57
  Speaker 1: what you and I were talking about, and correct me
• 14:59
  Speaker 1: if i'm you, and I think that people's perception of
• 15:02
  Speaker 1: the world around them is driven a perception of the
• 15:06
  Speaker 1: future is driven by their own situation. And I think
• 15:08
  Speaker 1: you're absolutely right. I think someone who has a great day,
• 15:11
  Speaker 1: if you ask them where things are headed, they would
• 15:14
  Speaker 1: have a fully different view than if they'd had a
• 15:17
  Speaker 1: horrible day, We're a horrible year month, or you.
• 15:21
  Speaker 4: Just maybe think of that song Everything's Coming Up Roses,
• 15:25
  Speaker 4: you know, Gypsy we Rustle, you know, one of those
• 15:31
  Speaker 4: Rogers and Hammerstein plays. You know, when you're feeling good,
• 15:36
  Speaker 4: the world looks good. When you're feeling bad, you're imagining
• 15:39
  Speaker 4: the worst around every corner. So because your own economy
• 15:45
  Speaker 4: starts in your brain and you have to control your
• 15:49
  Speaker 4: state and not get sucked in because you know there
• 15:53
  Speaker 4: is a lot of negativity out there. They're problems, for sure,
• 15:56
  Speaker 4: But john look like the way we live, not just
• 15:59
  Speaker 4: in the United States, but in Europe and in the
• 16:02
  Speaker 4: more developed parts of the world, there's never been anything
• 16:06
  Speaker 4: like this before, where literally, in many ways you live
• 16:11
  Speaker 4: better than the kings of yesteryear.
• 16:13
  Speaker 1: No doubt, living standards are amazing. They're an effect of
• 16:19
  Speaker 1: innovative people mass producing goods that past generations never imagined
• 16:24
  Speaker 1: they could have. And you know, I think you hit
• 16:27
  Speaker 1: on something else that's really important. What's that line from
• 16:29
  Speaker 1: Hazlit's book Economics and One Lesson. He said, quote, what
• 16:33
  Speaker 1: is harmful or disastrous to an individual must be equally
• 16:36
  Speaker 1: a harmful or disastrous the collection of individuals that make
• 16:39
  Speaker 1: up a nation. In all he was saying, but I
• 16:41
  Speaker 1: thought it was the most important line in the book
• 16:42
  Speaker 1: that no one talks about. They're never talked about. He's
• 16:45
  Speaker 1: just saying, economies are individuals, as you allude and as
• 16:49
  Speaker 1: you state and so. But this is important when we
• 16:52
  Speaker 1: consider policy. I don't care what your ideology is. You
• 16:58
  Speaker 1: can no individuals. Economy is improved if they're heading more
• 17:01
  Speaker 1: and more of the wealth over to the government, if
• 17:05
  Speaker 1: they're spending more time dealing with regulators rather than producing
• 17:09
  Speaker 1: what erard is they're producing, if they're not allowed to
• 17:12
  Speaker 1: trade with other people who want to trade with them
• 17:15
  Speaker 1: in other parts of the world, economic growth and optimism
• 17:19
  Speaker 1: is fairly basic once you break it down to these
• 17:22
  Speaker 1: first principles that you've broken down to that it's just
• 17:24
  Speaker 1: it's individuals, and individuals are much more collectively depressed when
• 17:29
  Speaker 1: policy is suffocating their ability to do to help themselves
• 17:34
  Speaker 1: as individuals.
• 17:35
  Speaker 4: Yeah, but you know the problem, it's kind of like education.
• 17:39
  Speaker 4: You know, going back I grew up in the sixties,
• 17:42
  Speaker 4: more than half the population smoked cigarettes, which is an
• 17:46
  Speaker 4: absolute act of insanity, self destructive. It's maybe not going
• 17:52
  Speaker 4: to get you now, but maybe maybe in ten years,
• 17:54
  Speaker 4: maybe in twenty.
• 17:55
  Speaker 3: Eventually it's going to get you. Now.
• 17:58
  Speaker 4: I never thought i'd live to see the day where
• 18:00
  Speaker 4: less than twenty percent of the population smokes tobacco cigarettes,
• 18:05
  Speaker 4: and that number keeps falling. And you know, the left
• 18:10
  Speaker 4: is always saying education, education, But this is a case
• 18:15
  Speaker 4: where education really worked. So why can't we have economic
• 18:20
  Speaker 4: education and personal finance education because we've proven that society
• 18:27
  Speaker 4: as a whole can actually change their attitudes their behavior.
• 18:32
  Speaker 4: And you know, I can't say about what they're eating
• 18:35
  Speaker 4: there as far as processed foods, but at least they're
• 18:39
  Speaker 4: not smoking cigarettes and taking ten twenty thirty years off
• 18:42
  Speaker 4: their lifespan like it once were.
• 18:45
  Speaker 1: Yeah, no, I know what you're saying. I loved smoking
• 18:48
  Speaker 1: when I smoked, but yeah, I get your point. I
• 18:52
  Speaker 1: guess my point there is that we didn't need education
• 18:54
  Speaker 1: for that. We knew and people knew. People knew. They
• 18:58
  Speaker 1: knew tell when you're a smoker, you know how you feel.
• 19:03
  Speaker 1: But there's joy in it, and so people do things.
• 19:06
  Speaker 1: You know, I don't bungee jump. Some people bungee jump.
• 19:08
  Speaker 1: I like to smoke. I didn't wear masks during the lockdowns.
• 19:14
  Speaker 1: That didn't fear me, but it fears scared some people. So,
• 19:17
  Speaker 1: you know, living.
• 19:19
  Speaker 3: That's your thing, where two or three who carries?
• 19:22
  Speaker 1: Yeah, you know, let people figure it out. They'll figure
• 19:24
  Speaker 1: it out, watching and including If lack of masks was
• 19:28
  Speaker 1: killing people, people would start wearing masks, if that was
• 19:30
  Speaker 1: the difference between sickness or death.
• 19:34
  Speaker 3: Education.
• 19:37
  Speaker 1: I just think people get it, you know. I love
• 19:40
  Speaker 1: people say, well, the pessimists in our myths, they say, oh, well,
• 19:44
  Speaker 1: things are so bad, And I think, well, in the
• 19:46
  Speaker 1: nineteen seventies, the Civil Aeronautics Board sexually planned airline routes,
• 19:51
  Speaker 1: airlines that were created by to move mail around. I
• 19:55
  Speaker 1: remember in the nineteen seventies, and I know you did
• 20:00
  Speaker 1: odd and even days for gasoline and waiting long lines
• 20:03
  Speaker 1: for gasoline because both sides bought into price controls. I
• 20:08
  Speaker 1: remember that you couldn't own a phone back then, you
• 20:11
  Speaker 1: had to rent it from the government's preferred monopoly. Yeah,
• 20:16
  Speaker 1: you talk about taxation, The top rate was seventy percent,
• 20:22
  Speaker 1: and Ronald Reagan was ridiculed not just by Democrats but
• 20:26
  Speaker 1: by Republicans for having the temerity to say that we
• 20:28
  Speaker 1: should lower the rate. They said it had caused cause inflation,
• 20:32
  Speaker 1: and probably the dumbest one of them all was the CIA,
• 20:36
  Speaker 1: and most of the economists of the CIA, but economists
• 20:39
  Speaker 1: in general, they also, well, you know, Soviet Union's just
• 20:41
  Speaker 1: a different economic system, but there's as almost as large
• 20:45
  Speaker 1: as ours. Don't tell me that we haven't improved. Don't
• 20:49
  Speaker 1: tell me things that things aren't better, that people aren't
• 20:52
  Speaker 1: more knowledgeable. None of those ideas would last a second
• 20:57
  Speaker 1: in any economic discussion.
• 20:59
  Speaker 3: Today.
• 21:00
  Speaker 1: We're much smarter, not because of school. Again, the conservatives that,
• 21:05
  Speaker 1: oh my gosh, they're socialists. Oh these democrats are like
• 21:09
  Speaker 1: people figure it out, you know, we're not babies. We
• 21:12
  Speaker 1: can look around, we know it works.
• 21:15
  Speaker 3: Yeah, well I'm surprised. You know.
• 21:16
  Speaker 4: I've been at Austrian economist or devotee of the Austrian
• 21:21
  Speaker 4: school since I'm twenty years old, so going on clos
• 21:25
  Speaker 4: fifty years, and what amazes me is people actually understand
• 21:31
  Speaker 4: the concept that when you print money and it's not
• 21:34
  Speaker 4: backed up by increases in productivity, that you get this
• 21:39
  Speaker 4: thing called inflation. You know, it surprises me, like how
• 21:44
  Speaker 4: knowledgeable much of the public's become about that. So but
• 21:49
  Speaker 4: education in that yes, everybody knew cigarettes were bad for you,
• 21:54
  Speaker 4: but they didn't know exactly how bad they were. I think, yeah, yeah,
• 21:58
  Speaker 4: I don't feel as good. But you know, I think
• 22:01
  Speaker 4: the information was hidden from plain sight. But now I
• 22:07
  Speaker 4: think education, as far as economics goes, it's all Kynesian.
• 22:12
  Speaker 4: You know, it's all kind of Kynesian brainwashing. And I
• 22:15
  Speaker 4: think the public is repudiating that.
• 22:18
  Speaker 3: Now, are they.
• 22:20
  Speaker 1: I've always argued that monetarism, that's just another sturdy leg
• 22:24
  Speaker 1: of the Kynesian chair, no offense. I think Austrians in
• 22:28
  Speaker 1: many ways have bought are a variation of Kanesianism. They
• 22:32
  Speaker 1: imagine that central banks can just produce excess credit. Now
• 22:35
  Speaker 1: credit is produced in the private economy. So Kanesians say
• 22:39
  Speaker 1: that government spending drives growth, and so too much government
• 22:42
  Speaker 1: spending causes inflation. Oh, police, governments can't spend what they
• 22:45
  Speaker 1: have taken from us. You've already explained that. Sure, money
• 22:48
  Speaker 1: that circulates circulates because of production. Forget about money printing
• 22:53
  Speaker 1: and all this. If you go to Venezuela right now,
• 22:57
  Speaker 1: you go to Iran, you go to Pyongyang. If you
• 23:00
  Speaker 1: want to buy things, you better have dollars because no
• 23:02
  Speaker 1: one's going to take the local currency correct. And so
• 23:06
  Speaker 1: I say this as a way of saying money that's trusted,
• 23:10
  Speaker 1: reasonably trusted. Now probably you and I. In our perfect world,
• 23:13
  Speaker 1: the dollar would have a stable definition. I'd love to
• 23:16
  Speaker 1: have it. But the dollar circulates globally, not because the
• 23:20
  Speaker 1: FED put it there, but because where there's production, there's money.
• 23:24
  Speaker 1: But then you have the Austrians saying that somehow, well, yeah,
• 23:28
  Speaker 1: the FED can just create access credit. No one cannot.
• 23:31
  Speaker 1: As Mesus was clear, we borrow money for what it
• 23:34
  Speaker 1: can be exchanged for. And so if the FED can't
• 23:37
  Speaker 1: create credit, only the private sector can create credit. And
• 23:42
  Speaker 1: so if the FED tried to print money or whatever
• 23:45
  Speaker 1: all this wacko stuff, the dollar would see circulating.
• 23:49
  Speaker 3: It doesn't.
• 23:50
  Speaker 1: Markets are smart, and no one's going to take a
• 23:53
  Speaker 1: currency that was quote printed, because they're going to say, well,
• 23:57
  Speaker 1: I won't get back as much as I brought to
• 24:00
  Speaker 1: market for that currency. And so I just think they're
• 24:02
  Speaker 1: all I think all the religions need to wake up
• 24:05
  Speaker 1: and say that people are smart and they see they
• 24:08
  Speaker 1: see through all this stuff.
• 24:09
  Speaker 4: Yeah, well, you know a lot of countries, every fiat
• 24:15
  Speaker 4: currency out there has has done the same thing and
• 24:20
  Speaker 4: eventually realize they're intrinsic value. The dollar is the one
• 24:24
  Speaker 4: that has lasted the longest since it became fiat. You know,
• 24:29
  Speaker 4: it's fifty four years now, so the experiment is ongoing.
• 24:34
  Speaker 4: And you know, but the idea of a stable currency,
• 24:39
  Speaker 4: the banks don't like it, right, Yes, oh I think
• 24:42
  Speaker 4: they would love it. You think so, But then their
• 24:46
  Speaker 4: loans become worth more, but yes, harder to pay back.
• 24:51
  Speaker 1: Why would they be harder to pay back? With a
• 24:53
  Speaker 1: stable currency, you'd have suddenly, you'd have all this investment
• 24:58
  Speaker 1: removed from inflation and hard assets representing existing wealth, and
• 25:05
  Speaker 1: you could much more capably put it to work in
• 25:07
  Speaker 1: new ideas. Let's never forget that the dollar fell substantially
• 25:12
  Speaker 1: in the two thousands. I don't think it's unrelated that
• 25:16
  Speaker 1: various US banks and investment banks were brought to their
• 25:19
  Speaker 1: knees by this massive devaluation. Contrasts that with the eighties
• 25:23
  Speaker 1: and nineties. Ronald Reagan didn't get it, but he ran
• 25:27
  Speaker 1: on returning to a gold standard. Markets saw ahead and
• 25:32
  Speaker 1: responded that gold collapsed during the Reagan years. Never forget
• 25:36
  Speaker 1: that Bill Clinton's Treasury secretary Robert Rubin was big about
• 25:40
  Speaker 1: a strong, stable dollar. Is in any surprise that Wall
• 25:44
  Speaker 1: Street's golden years were during those years. Wall Street hates
• 25:48
  Speaker 1: chaos because it makes a lot more money from investment
• 25:52
  Speaker 1: banking than it does from trading. That's precisely why Jamie Diamond,
• 25:56
  Speaker 1: once he took over at JP Morgan, got rid of
• 25:59
  Speaker 1: all the is. He knew that investors wouldn't pay for
• 26:04
  Speaker 1: trading profits. There's no money in that. Banks would be
• 26:07
  Speaker 1: much better off with good money.
• 26:09
  Speaker 4: Yeah, they might be, but they are a beneficiary of
• 26:12
  Speaker 4: inflation because the new money that's created, they get it
• 26:15
  Speaker 4: first before appreciated.
• 26:19
  Speaker 1: No, no, again, If that were true, why did they
• 26:22
  Speaker 1: nearly die in the two thousands, why were they Why
• 26:25
  Speaker 1: was Wall Street on its knees in the seventies. Inflation's bad.
• 26:30
  Speaker 1: Banks lend out money hoping to get something back. Inflation
• 26:34
  Speaker 1: wipes out the value of their loans. Come on, you
• 26:37
  Speaker 1: know that.
• 26:38
  Speaker 4: Well, yeah, that's why everything is adjustable now. But that
• 26:41
  Speaker 4: doesn't really address the underlying problem that the dollars they
• 26:46
  Speaker 4: are getting paid back are worth less than the dollars
• 26:48
  Speaker 4: they loaned out.
• 26:49
  Speaker 3: Yeah.
• 26:50
  Speaker 1: No, well, it goes up and down. There are stages
• 26:52
  Speaker 1: where the dollar's stronger. We haven't seen that in the
• 26:54
  Speaker 1: twenty first century. I'll go to my grave saying that
• 26:57
  Speaker 1: George W. Bush was easily the worst president my lifetime
• 27:00
  Speaker 1: and one of the most awful of many things he does.
• 27:04
  Speaker 1: Did that no one will ever talk about because no
• 27:06
  Speaker 1: one talks about money anymore. Is they reverse the Reagan
• 27:09
  Speaker 1: Clinton era of a strong stable dollar. His Treasury secretaries
• 27:14
  Speaker 1: from Paul O'Neil on kept saying, Hey, what's the importance
• 27:17
  Speaker 1: of a strong dollar. Well, it's the utmost importance. It's
• 27:20
  Speaker 1: the most important current price in the world. They and
• 27:24
  Speaker 1: the Bush administration oversaw a major devaluation. And it's no
• 27:29
  Speaker 1: surprise from that where we went.
• 27:32
  Speaker 4: To boost to boost exports, the dumbest thing. It doesn't work,
• 27:38
  Speaker 4: all right, John, So tell me where do we find you?
• 27:40
  Speaker 4: How do we connect with you on the web?
• 27:43
  Speaker 1: Oh, you could go to Twitter or x. I suppose
• 27:46
  Speaker 1: I'm on there.
• 27:47
  Speaker 3: I'm on.
• 27:48
  Speaker 1: I'm still editor of Real Clear Markets, and I put
• 27:50
  Speaker 1: out a at least one column every day begging trying
• 27:54
  Speaker 1: to convince people to think as I do, not very successfully,
• 27:57
  Speaker 1: but you know you have to, as I always remind people,
• 28:00
  Speaker 1: if you can even change thinking a little, that represents
• 28:04
  Speaker 1: big progress. And so that there's all my books that
• 28:06
  Speaker 1: everyone listening or watching should buy several copies of number eight.
• 28:10
  Speaker 1: The Deficit Delusion comes out in August.
• 28:14
  Speaker 3: I'm ordering it.
• 28:15
  Speaker 4: I pre order on Amazon, and I guess it'll be
• 28:18
  Speaker 4: available at Amazon and wherever fine books used to be.
• 28:22
  Speaker 1: Sold, right, Yeah, that's right, don't I'd like to say
• 28:26
  Speaker 1: that it's going to be in bookstores everywhere, but I
• 28:28
  Speaker 1: don't trust my sales history, so but Amazon for sure.
• 28:33
  Speaker 4: Yeah, all right, Hey, it's great to talk to you again.
• 28:36
  Speaker 4: Great to connect. And if you've got a question for
• 28:38
  Speaker 4: John myself, shoot me an email kl at Kerrie lets
• 28:41
  Speaker 4: dot com. All of John's info will be in the
• 28:45
  Speaker 4: show notes of this interview on Financial Survival Network dot com.
• 28:49
  Speaker 4: When you go there, just ask that you please sign
• 28:51
  Speaker 4: up for you free newsletter like over seventy five thousand
• 28:54
  Speaker 4: of you have already.
• 28:56
  Speaker 3: John. Great connecting with you. We'll talk to you again
• 28:58
  Speaker 3: real soon.
• 28:59
  Speaker 1: Thank you so much. Congratulations on your big viewership, Thanks.
• 29:02
  Speaker 2: For listening to carry Letz's Financial Survival Network, your solution
• 29:07
  Speaker 2: to today's trying times. For the latest, go to Financial
• 29:11
  Speaker 2: Survivalnetwork dot com. Financial Survival Network now more than ever