Latest / Financial Survival Network / A Tale of Two Economies: Comparing the Presidential Candidate Policies - Michael Busler #6138

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A Tale of Two Economies: Comparing the Presidential Candidate Policies - Michael Busler #6138 · Financial Survival Network

• 0:00
  Speaker 1: Price controls never work and may end up causing more
• 0:05
  Speaker 1: harm than good. So her policy if price controls is
• 0:09
  Speaker 1: not going to work. On the other hand, what would
• 0:12
  Speaker 1: President Trump do well, He said, look at the consumer
• 0:15
  Speaker 1: price Index. About thirty percent of it in the aggregate
• 0:19
  Speaker 1: in total is made up of energy prices. Not just
• 0:23
  Speaker 1: that we buy gasoline and heating oil, but business has
• 0:26
  Speaker 1: to buy energy to produce the products. So when energy
• 0:29
  Speaker 1: cars go costs more to produce products. So President Trump said,
• 0:33
  Speaker 1: there's no reason why energy is so high. The reason
• 0:37
  Speaker 1: it is so expensive is when the Biden administration Biden
• 0:42
  Speaker 1: and Harris came in in January of twenty twenty one,
• 0:45
  Speaker 1: they wanted to restrict the use of fossil fuels.
• 0:49
  Speaker 2: You're listening to Carrie Let's's Financial Survival Network, where you
• 0:53
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• 0:57
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• 1:00
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• 1:09
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• 1:16
  Speaker 4: And welcome.
• 1:17
  Speaker 3: You are listening to and watching the Financial Survival Network.
• 1:21
  Speaker 3: I'm your host Carry Let's Hey, We're almost at the
• 1:24
  Speaker 3: end of August, we've got an.
• 1:26
  Speaker 4: Election going on.
• 1:27
  Speaker 3: We don't really talk much about elections because this is
• 1:30
  Speaker 3: a family show and you know, the current political situation
• 1:36
  Speaker 3: is obscene. But we do talk about economics, and there's
• 1:40
  Speaker 3: a couple of policies. There's Kamaloomics and there's trump Anomics.
• 1:44
  Speaker 3: We've already had a taste of both of them. I
• 1:46
  Speaker 3: don't know which one you prefer, but we do know
• 1:50
  Speaker 3: which one, Professor Bustler, Michael Butler, you prefer.
• 1:55
  Speaker 4: So tell us here, are.
• 1:56
  Speaker 3: There two distinct economic policies or is one just mimicking
• 2:00
  Speaker 3: the other?
• 2:01
  Speaker 4: And why should we care?
• 2:03
  Speaker 1: So there are thanks for having me on your show, Carriage.
• 2:05
  Speaker 1: So there are two distinct, distinctly different economic policies. So
• 2:11
  Speaker 1: before we look at it, what is the goal of
• 2:14
  Speaker 1: economic policy? That includes both monetary and fiscal policy. So
• 2:18
  Speaker 1: what are the goals of economic policy? They should be
• 2:22
  Speaker 1: to keep prices stable, rice stability, growth, and full employment.
• 2:28
  Speaker 1: So let's start with price stability. We have had and
• 2:34
  Speaker 1: almost continue to have a very severe inflation problem. Remember
• 2:38
  Speaker 1: when at the end of twenty twenty, the last number
• 2:42
  Speaker 1: we had for inflation, the inflation rate was running at
• 2:44
  Speaker 1: about one point four percent starting in twenty twenty one.
• 2:49
  Speaker 1: The inflation rate continued to go up steadily until June
• 2:53
  Speaker 1: of twenty twenty two, when it peaked out at nine
• 2:56
  Speaker 1: point one percent, and the Federal Reserve said, look, we're
• 3:00
  Speaker 1: going to have to do something about it. So they
• 3:03
  Speaker 1: started raising interest rates, and it appears to have brought
• 3:06
  Speaker 1: the inflation rate down. I think it's still a little
• 3:10
  Speaker 1: too high, and the Federal Reserve shouldn't cut interest rates.
• 3:14
  Speaker 1: In September. Most people disagree with me and say that
• 3:19
  Speaker 1: the inflation rate has come down and it's time to
• 3:21
  Speaker 1: cut interest rates. So suppose inflation flares up again during
• 3:27
  Speaker 1: the next administration. Kamala Harris's policy is, well, if corporations
• 3:34
  Speaker 1: and business is going to continue to raise prices, let's
• 3:37
  Speaker 1: just pass the law that says it's illegal for you
• 3:40
  Speaker 1: to raise prices. That way, she says, we'll solve the
• 3:44
  Speaker 1: inflation problem. That was tried in the US in nineteen
• 3:48
  Speaker 1: seventy one by Richard Nixon. We had an inflation problem.
• 3:53
  Speaker 1: He put on price controls.
• 3:55
  Speaker 4: He crow.
• 3:57
  Speaker 1: For about ninety days, so it was illegal or ready
• 4:00
  Speaker 1: your price during that period, and then he lifted it
• 4:04
  Speaker 1: and prices ended up soaring during the ninety days when
• 4:08
  Speaker 1: the price controls were in effect. You ended up with
• 4:13
  Speaker 1: what we knew was going to happen. Anytime you set
• 4:16
  Speaker 1: a market price below the equilibrium, you end up with
• 4:20
  Speaker 1: the shortage of the product. And for those of us
• 4:23
  Speaker 1: that are old enough to remember, there were lines to
• 4:26
  Speaker 1: get gasoline. Depending on our last number on your license plate,
• 4:29
  Speaker 1: told you what day could buy Yes, Selene. So price
• 4:34
  Speaker 1: controls never work and may end up causing more harm
• 4:39
  Speaker 1: than good. So her policy of price controls is not
• 4:43
  Speaker 1: going to work. On the other hand, what would President
• 4:46
  Speaker 1: Trump do well, He said, look at the consumer price index.
• 4:50
  Speaker 1: About thirty percent of it in the aggregate in total
• 4:54
  Speaker 1: is made up of energy prices. Not just that we
• 4:56
  Speaker 1: buy gasoline and heating oil, but business has to buy
• 5:00
  Speaker 1: energy to produce the products. So when energy cars go on,
• 5:03
  Speaker 1: costs more to produce products. So President Trump said, there's
• 5:07
  Speaker 1: no reason why energy is so high. The reason it
• 5:11
  Speaker 1: is so expensive is when the Biden administration Biden and
• 5:16
  Speaker 1: Harris came in in January of twenty twenty one, they
• 5:19
  Speaker 1: wanted to restrict the use of fossil fuels, so they
• 5:23
  Speaker 1: canceled the Keystone Pipeline, which would have added another nine
• 5:27
  Speaker 1: hundred thousand barrels of oil a day. They made the
• 5:32
  Speaker 1: permitting process more difficult for oil companies, and they withdrew
• 5:38
  Speaker 1: leases to drill on federal lands. Well, that restricted the
• 5:42
  Speaker 1: supply of oil, and when you restrict the supply of anything,
• 5:47
  Speaker 1: the price goes up. So President Trump said, look, let's
• 5:50
  Speaker 1: just reverse all that, go back to what I was
• 5:53
  Speaker 1: going to do and started to do back in twenty twenty.
• 5:56
  Speaker 1: So we're going to start drilling more. We're going to
• 5:59
  Speaker 1: prove the Keystone pipeline will bring energy prices down, and
• 6:03
  Speaker 1: that should help significantly to control the inflation problem. So
• 6:10
  Speaker 1: President Trump will look at the causes of inflation rather
• 6:13
  Speaker 1: than just saying we're not going to allow anyone to
• 6:18
  Speaker 1: raise prices. And those price controls, as I said, don't work. Now,
• 6:22
  Speaker 1: how about the next goal, growth and full employment go together.
• 6:27
  Speaker 1: Kamala Harris hasn't really given what her policies will be
• 6:32
  Speaker 1: on economic growth, other than to say, look, I know
• 6:38
  Speaker 1: in some areas in the housing market, but for instance,
• 6:42
  Speaker 1: we would like to see more houses being built, and
• 6:45
  Speaker 1: we'd like to see them less expensive so that more
• 6:48
  Speaker 1: people will be able to afford new homes. To do that,
• 6:53
  Speaker 1: she's going to give twenty five thousand dollars down payment
• 6:57
  Speaker 1: as systems to every eligible I'm not sure how she
• 7:00
  Speaker 1: defines eligible every eligible home buyer. Well, that'll actually make
• 7:06
  Speaker 1: the problem worse. The reason housing prices are going up
• 7:09
  Speaker 1: so fast is that just the same reason why any
• 7:13
  Speaker 1: there's a far greater demand than there is supply. So
• 7:17
  Speaker 1: she gives people money to help buy houses. That will
• 7:21
  Speaker 1: increase the demand and make prices go up even further.
• 7:25
  Speaker 1: She says, if we increase the demand, the supply will
• 7:28
  Speaker 1: just catch up to that demand. They'll be able to
• 7:31
  Speaker 1: build three million more houses. That's not likely to happen.
• 7:35
  Speaker 1: So what does President Trump say? He says, Look, a
• 7:39
  Speaker 1: major component when you're buying a house is the cost
• 7:41
  Speaker 1: of land. He says, I really can't do anything about
• 7:44
  Speaker 1: the costs of materials and labor is what it is.
• 7:47
  Speaker 1: But the federal government owns a lot of land. If
• 7:50
  Speaker 1: we release that land to homebuilders at a lower costs,
• 7:55
  Speaker 1: that will give homebuilders an incentive to start producing more houses.
• 8:00
  Speaker 1: That will increase the supply of houses and tend to
• 8:03
  Speaker 1: bring the price down. The other thing that influences economic
• 8:08
  Speaker 1: growth significantly is tax policy, and there's a vast difference
• 8:13
  Speaker 1: in what the two candidates are offering. Kamala Harris says
• 8:19
  Speaker 1: she wants to do a lot more social programs, give
• 8:22
  Speaker 1: credits to moms for daycare and the down payment assistance.
• 8:30
  Speaker 1: So her plan is to in order to pay for that,
• 8:38
  Speaker 1: she's going to have to raise taxes. Now, she says, well,
• 8:41
  Speaker 1: I don't want to raise taxes on the middle class
• 8:43
  Speaker 1: because I'm for the middle class and working people. Let's
• 8:47
  Speaker 1: have the wealthy pay their fair share. Let's finally have
• 8:51
  Speaker 1: the wealthy pay their fair share. We're going to raise
• 8:54
  Speaker 1: those taxes. So I looked at the i R S
• 8:59
  Speaker 1: in twenty two twenty three. They didn't have twenty twenty
• 9:01
  Speaker 1: four data, but in twenty twenty three, the top one
• 9:05
  Speaker 1: percent of income earners earned twenty six percent of all income.
• 9:10
  Speaker 1: That's a lot. They paid forty six percent of all
• 9:15
  Speaker 1: income taxes paid. The top twenty percent ended up paying
• 9:19
  Speaker 1: eighty percent of all the taxes paid. I don't know
• 9:23
  Speaker 1: how she defines fair share, but I would say the
• 9:27
  Speaker 1: top income earners are paying way more than their fair share.
• 9:31
  Speaker 1: In fact, the lowest forty seven percent of income earners,
• 9:36
  Speaker 1: nearly half don't pay any federal tax at all. Now
• 9:39
  Speaker 1: they say, well, they pay social Security and Medicare, and
• 9:42
  Speaker 1: that's true, but the people that pay the high income
• 9:45
  Speaker 1: taxes also pay Social Security and Medicare. Raising taxes will
• 9:51
  Speaker 1: stagnate the economy. She wants to raise the corporate tax
• 9:55
  Speaker 1: rate from twenty one up to twenty eight percent, in
• 9:57
  Speaker 1: addition to raising taxes on the wealth feet And the
• 10:01
  Speaker 1: last thing I heard her say was she wants to
• 10:04
  Speaker 1: tax unrealized capital gains. So what does that mean? So
• 10:08
  Speaker 1: if you have an asset, house, or land, or something
• 10:13
  Speaker 1: that has a certain value, at the end of the year,
• 10:15
  Speaker 1: the value is gone up. You haven't sold your house
• 10:17
  Speaker 1: or living it, but the value has gone up. She
• 10:19
  Speaker 1: wants people to pay taxes on how much the value
• 10:24
  Speaker 1: has gone up. Also very disastrous. On the third things
• 10:30
  Speaker 1: she said was in twenty seventeen, whanted to effect the
• 10:33
  Speaker 1: twenty eighteen resident Trump convinced Congress to have a tax
• 10:38
  Speaker 1: cut for all Americans. Its essentially what he said was,
• 10:42
  Speaker 1: I'm going to cut everybody's taxes by ten percent. So
• 10:45
  Speaker 1: it's nice and fair. Everybody gets a ten percent cut
• 10:49
  Speaker 1: in order to get it through Congress. They could only
• 10:53
  Speaker 1: get it approved for a ten year period, so these
• 10:57
  Speaker 1: will expire at the end of twenty twenty six. Kamala
• 11:01
  Speaker 1: says she wants to let that expire. That will raise
• 11:05
  Speaker 1: everybody who pays taxes. That will raise their taxes by
• 11:09
  Speaker 1: ten percent. That will get people less money to spend
• 11:13
  Speaker 1: and businesses is less and that will tend to slow
• 11:17
  Speaker 1: down economic activity. What does President Trump want to do?
• 11:21
  Speaker 1: Make those Trump tax cuts permanent? To keep everybody's tax
• 11:25
  Speaker 1: rates down, keep the corporate tax rate at twenty one percent,
• 11:30
  Speaker 1: and only tax capital gain when it's realized when you've
• 11:34
  Speaker 1: sold something, you have a capital gain, then tech backs it.
• 11:38
  Speaker 1: So his policies will keep tax rates much lower. That
• 11:42
  Speaker 1: will spur economic growth. So it's a vast difference between
• 11:47
  Speaker 1: what the two candidates.
• 11:49
  Speaker 4: One.
• 11:49
  Speaker 3: So let's go to this wealth tax, because that is
• 11:52
  Speaker 3: probably the most disturbing thing. Says, It's only going to
• 11:55
  Speaker 3: be on people over one hundred million. But look, you know,
• 11:59
  Speaker 3: we know how this works to trickle down economics. They're
• 12:02
  Speaker 3: a big proponent of that, especially when it comes to
• 12:05
  Speaker 3: tax policy. Actually, the only time they're a proponent of
• 12:10
  Speaker 3: trickle down economics as they call it is when it
• 12:12
  Speaker 3: comes to taxes, meaning that everybody gets taxed eventually. So
• 12:17
  Speaker 3: my house right now, you know, maybe went up fifty percent,
• 12:20
  Speaker 3: but I'm not selling it. So then you know, and
• 12:24
  Speaker 3: this supplies and just say, hey, somebody's the value of
• 12:27
  Speaker 3: somebody's shareholdings who's a billionaire went up three hundred million.
• 12:32
  Speaker 3: All right, they can't spend that money, although I guess
• 12:35
  Speaker 3: in theory they can borrow on the value of their portfolio,
• 12:38
  Speaker 3: but that's risky.
• 12:39
  Speaker 1: Still haven't earned it.
• 12:41
  Speaker 3: Yeah, it's what I would call phantom income because it's
• 12:44
  Speaker 3: income the government thinks you made, but it's income that
• 12:47
  Speaker 3: never made it to your pocket.
• 12:50
  Speaker 1: What's the wisdom of that? There's very little wisdom. Who
• 12:53
  Speaker 1: this is really going to copper is farmers because the
• 12:57
  Speaker 1: value of land is going up considered. But you have
• 13:01
  Speaker 1: a farm that has been in a family for two, three,
• 13:04
  Speaker 1: four generations and they don't want to sell it. They
• 13:08
  Speaker 1: want to continue to farm the land to provide food.
• 13:12
  Speaker 1: If she starts taxing unrealized capital gain, farmers won't have
• 13:16
  Speaker 1: money to pay the taxes. What are they going to
• 13:18
  Speaker 1: have to do? They're going to have to sell off
• 13:19
  Speaker 1: part of their land. To pay the taxes every year,
• 13:23
  Speaker 1: and that will reduce the amount of farmland available and
• 13:27
  Speaker 1: eventually reduce the amount of food being produced. And when
• 13:31
  Speaker 1: you reduce the supply of anything, the price is going
• 13:34
  Speaker 1: to skyrocket. So all of her plans, she thinks she's
• 13:39
  Speaker 1: being good to the middle class, all of her plans
• 13:42
  Speaker 1: will eventually clabber the middle class. You're going to end
• 13:45
  Speaker 1: up with a stagnant economy, You're going to end up
• 13:48
  Speaker 1: with a higher inflation number, and eventually then the unemployment
• 13:54
  Speaker 1: rate is going to start to go up. And this
• 13:56
  Speaker 1: is not just some theory. Look at all the countries
• 13:59
  Speaker 1: that have done stuff like this and you can see
• 14:02
  Speaker 1: what happens to those countries.
• 14:04
  Speaker 3: Hey, and I remember when Nixon imposed the wage in
• 14:08
  Speaker 3: price controls and everybody thought, oh, this will really be good.
• 14:12
  Speaker 3: But the fact is it didn't work. Even by his
• 14:17
  Speaker 3: own admission, it didn't work. And it ignores the cause
• 14:22
  Speaker 3: of the real cause of inflation, which is excessive government spending,
• 14:31
  Speaker 3: right and printing money, deficit spending and all of this.
• 14:37
  Speaker 4: Now, the one.
• 14:39
  Speaker 3: Place where I kind of take a little issue is
• 14:42
  Speaker 3: during Trump's.
• 14:46
  Speaker 4: Tenure in office.
• 14:47
  Speaker 3: Obviously we had the pandemic, but that became a money
• 14:51
  Speaker 3: giveaway free for all that has contributed to the underlying inflation.
• 14:57
  Speaker 4: It's not just Biden.
• 14:59
  Speaker 3: Harris Trump is responsible to some extent for the inflation,
• 15:04
  Speaker 3: maybe not the bulk of it, but he was just
• 15:07
  Speaker 3: lucky he got out what price that we had increasing
• 15:10
  Speaker 3: at one point four percent, largely because energy consumption plunged
• 15:17
  Speaker 3: in that sent oil price is skidding. You know, there's
• 15:21
  Speaker 3: some responsibility here, Michael four Trump's actions.
• 15:27
  Speaker 1: Okay, so why do we have this inflation? The real
• 15:31
  Speaker 1: reasons we have inflation is the federal government deficit spent.
• 15:36
  Speaker 1: That has spent more money than they took in nearly
• 15:38
  Speaker 1: eleven trillion dollars from twenty twenty Trump's last year up
• 15:43
  Speaker 1: through the end of twenty twenty four. The fiscal year
• 15:45
  Speaker 1: ends at September eleven trillion dollars more than they brought
• 15:49
  Speaker 1: in in tax revenue. On an economy of about twenty
• 15:53
  Speaker 1: five trillion a year, that's going to add to pure inflation.
• 15:58
  Speaker 1: The other reason we have inflation is that when inflation
• 16:02
  Speaker 1: started to tick up in early twenty twenty one, the
• 16:06
  Speaker 1: Federal Reserve said, well, don't worry about it, it's temporary.
• 16:09
  Speaker 1: We'll use the term transitory. We don't have to do anything,
• 16:12
  Speaker 1: it'll just go away. So they didn't do anything. They
• 16:14
  Speaker 1: kept interest rates in your zero, which kept demand high,
• 16:17
  Speaker 1: and they kept their bond buying program. Finally, in June
• 16:21
  Speaker 1: of twenty twenty two, the Federal Reserve recognized the economic
• 16:26
  Speaker 1: goals include price stability and they started to raise interase rates.
• 16:31
  Speaker 4: Imagine that.
• 16:32
  Speaker 1: Now. One last thing, he said, well, Trump had a
• 16:35
  Speaker 1: three trillion dollar deficit in twenty twenty and that's really
• 16:38
  Speaker 1: what started this. So here's the argument to the other
• 16:42
  Speaker 1: side of that, for whatever reason, the pandemic, etc. They
• 16:47
  Speaker 1: shut the economy down completely. So output one from whenever
• 16:52
  Speaker 1: it was almost down to zero. Unemployment went up to
• 16:55
  Speaker 1: fourteen fifteen percent. Trump said, we need to fix this quick.
• 17:00
  Speaker 1: So what I want to see is what we call
• 17:03
  Speaker 1: V shaped recovery. So we dipped very quickly. I want
• 17:06
  Speaker 1: to see us come back very quickly. How do we
• 17:09
  Speaker 1: do that. We have consumers and government, and consumers start
• 17:13
  Speaker 1: spending a lot of money. So he passed a three
• 17:16
  Speaker 1: trillion dollars stimulus package at work, and the economy came
• 17:21
  Speaker 1: roaring back. You can argue whether it was necessary or not,
• 17:25
  Speaker 1: but at least that was his thinking in twenty twenty one,
• 17:29
  Speaker 1: when Biden took office, they keep saying inherited a terrible economy.
• 17:33
  Speaker 1: That's not true. When Biden took office, the inflation rate
• 17:37
  Speaker 1: was one point four percent. The economy was growing at
• 17:41
  Speaker 1: a six percent annual rate. When Biden decided to pass
• 17:46
  Speaker 1: the American Rescue Plan, the Inflation Reduction Act, another three
• 17:49
  Speaker 1: trillion and stimulus, the economy was already growing. That led
• 17:54
  Speaker 1: to just pure inflation, and then Biden just kept it
• 17:57
  Speaker 1: up in the next two years. And this year he's
• 18:00
  Speaker 1: still going to run another two trillion dollar deficit, and
• 18:03
  Speaker 1: there's absolutely no reason for that. So you're right, the
• 18:07
  Speaker 1: big deficit spending started with Trump. Obviously I support his policies,
• 18:12
  Speaker 1: but you could debate whether and argue whether he should
• 18:16
  Speaker 1: have had the stimulus or not. But after that stimulus,
• 18:20
  Speaker 1: you didn't need any more at all. So you're right.
• 18:22
  Speaker 1: Trump is partially to blame. You can justify it by
• 18:26
  Speaker 1: saying we wanted to get that v shaped recovery. But
• 18:28
  Speaker 1: you are accurate that Trump's stimulus contributed to the inflation problem.
• 18:34
  Speaker 3: Yeah, I mean, and looked like it started it. But
• 18:38
  Speaker 3: we're also we also live in a world that's governed
• 18:43
  Speaker 3: by cycles, and we'd have this low inflation rate over
• 18:47
  Speaker 3: the past three decades, almost four decades, and lower interest
• 18:53
  Speaker 3: rates all that. Now, you could argue that the inflation
• 18:57
  Speaker 3: rate was understated during that time. I don't think there's
• 19:00
  Speaker 3: any question about it. But you know, it was just
• 19:04
  Speaker 3: natural that that lower interest rates were going to come
• 19:08
  Speaker 3: to an end. Artificially lower interest rates they helped spur
• 19:12
  Speaker 3: inflation as well. Right, So a lot of this is
• 19:17
  Speaker 3: just hey, being in the wrong time at the wrong place.
• 19:20
  Speaker 3: But that doesn't mean that just because there's a fire there,
• 19:24
  Speaker 3: instead of taking the firehose and extinguishing it, you take
• 19:27
  Speaker 3: the gasolene pump and you pulp more feed for the
• 19:32
  Speaker 3: fire there.
• 19:33
  Speaker 1: Right, act exactly if you believe that the economy operates
• 19:39
  Speaker 1: in cycles, which it does, and inflation, would it come
• 19:42
  Speaker 1: back eventually? Anyway, once it starts to come back, you
• 19:45
  Speaker 1: take action at that point. You don't wait. The Federal
• 19:49
  Speaker 1: Asserve waited a year and a half later, the fiscal
• 19:52
  Speaker 1: policy there's still deficit spending four years, three and a
• 19:56
  Speaker 1: half years after the inflatation started. So what economists, especially
• 20:01
  Speaker 1: the Federal Reserve, they're supposed to be ahead of this. Yeah,
• 20:05
  Speaker 1: there's any side of inflation. Like in twenty eighteen, they
• 20:09
  Speaker 1: passed these tax cuts, the economy was all set to
• 20:12
  Speaker 1: take off, no signs of inflation. For some reason, the
• 20:15
  Speaker 1: Federal Reserve starts pushing up interest rates. They're asked why.
• 20:19
  Speaker 1: They said, well, inflation could be a problem in the future,
• 20:22
  Speaker 1: and we want to stead stay ahead of this. Why
• 20:25
  Speaker 1: they didn't take that view in twenty twenty one. I
• 20:27
  Speaker 1: don't know the same people there, and they took a
• 20:31
  Speaker 1: much different view.
• 20:33
  Speaker 4: Hey, could not agree with you more.
• 20:34
  Speaker 3: You know, I just want a place blame because inflation,
• 20:39
  Speaker 3: deficit spending, that isn't one.
• 20:41
  Speaker 4: Party or the other.
• 20:42
  Speaker 3: There have been partners in it, absolutely, back to World
• 20:47
  Speaker 3: War two, arguably before World you know, the Great Depression,
• 20:53
  Speaker 3: all of this, and you know, it's kind of like
• 20:57
  Speaker 3: when you got a candy bar and you take.
• 20:59
  Speaker 4: That first bite.
• 21:01
  Speaker 3: It's delicious, and then you like dobble the whole thing
• 21:04
  Speaker 3: down and you feel sick afterwards.
• 21:07
  Speaker 1: So, as a result of everything you said, we now
• 21:10
  Speaker 1: have a thirty five trillion dollars public debt. That's the
• 21:14
  Speaker 1: total of all deficits over time. Where did all this
• 21:17
  Speaker 1: problems start? It actually started other's deficits in the path.
• 21:21
  Speaker 1: But really in the early sixties, what happened then John
• 21:24
  Speaker 1: Kennedy was president. Women decided, look, we don't have to
• 21:28
  Speaker 1: stay at home. We can enter the workforce too if
• 21:30
  Speaker 1: we want. So women started entering the workforce. The unemployment
• 21:34
  Speaker 1: rate started to go up. So Kenny said, look, how
• 21:37
  Speaker 1: do I stimulate the economy? And as economists there were
• 21:40
  Speaker 1: Chinesy economists, they said, look, just spend more money. And
• 21:44
  Speaker 1: Kenny said, well, look we don't have any more money.
• 21:47
  Speaker 1: I don't want to raise taxes. And they told them
• 21:49
  Speaker 1: it's okay to run a deficit. Why look, we owe
• 21:53
  Speaker 1: the money to ourselves and we can always raise taxes
• 21:56
  Speaker 1: they get rid of a deficit. So they convinced Kennedy
• 21:58
  Speaker 1: that deficit spending was okay. Since that time, nineteen sixty
• 22:03
  Speaker 1: two to twenty twenty four, what is that sixty sixty
• 22:07
  Speaker 1: two years. We only balance the budget four years out
• 22:11
  Speaker 1: of those sixty two years, and the deficits in the
• 22:15
  Speaker 1: last decade have gotten much much larger. We're going to
• 22:19
  Speaker 1: have to confront this public debt problem sooner rather than later.
• 22:24
  Speaker 1: What happened over the years is every president they said, well,
• 22:27
  Speaker 1: the deficits run end. Let's try to keep go go.
• 22:30
  Speaker 1: We'll kick the can down the road. Let the next
• 22:32
  Speaker 1: president worry about it. Next president gets in says, Okay,
• 22:35
  Speaker 1: we have a definite problem. I don't want to raise TAXID,
• 22:37
  Speaker 1: don't want to cuts back, and we'll make the next
• 22:39
  Speaker 1: guy worry about it. They kept kicking the can down
• 22:42
  Speaker 1: the road. The point is we're at the end of
• 22:44
  Speaker 1: the road. There is no more road. We have to
• 22:46
  Speaker 1: deal with this problem as soon as possible. It takes
• 22:49
  Speaker 1: a lot of political courage to do that. I'm hoping.
• 22:55
  Speaker 1: I believe Trump's I hope President Trump windsy election and
• 22:59
  Speaker 1: at some point he's going to have to confront that problem.
• 23:02
  Speaker 4: Well, you know one thing for sure. You know the.
• 23:09
  Speaker 3: Opposition here can't even spell inflation, let alone wanting to
• 23:16
  Speaker 3: do something.
• 23:16
  Speaker 4: About it here, right, Yeah, yeah, they don't really.
• 23:21
  Speaker 1: The current administration is not really interested in reducing government spending.
• 23:28
  Speaker 1: In fact, under Biden, government spending has skyrocketed. I think
• 23:33
  Speaker 1: his next proposed budget for twenty twenty five was I
• 23:37
  Speaker 1: think six point five trillion. When he got in in
• 23:41
  Speaker 1: twenty twenty one, I think the budget was about four
• 23:43
  Speaker 1: point eight trillion, So he ended up massively increasing government
• 23:48
  Speaker 1: spending and that led to larger deficits. He's going to
• 23:51
  Speaker 1: end up his four years having about seven point eight
• 23:55
  Speaker 1: trillion dollars in debt, he added. He says Trump added more.
• 24:00
  Speaker 1: That's not accurate. Trump added about five point six trillion dollars.
• 24:06
  Speaker 1: The point is somebody's going to have to face this
• 24:09
  Speaker 1: and do what we have to do to get the
• 24:12
  Speaker 1: deficit down. And it's a very difficult thing to do.
• 24:15
  Speaker 3: Well, it's actually pretty easy because in the age of
• 24:18
  Speaker 3: AI and chat GPT, I asked chat GPT to analyze
• 24:23
  Speaker 3: the twenty twenty five federal budget and come up with
• 24:29
  Speaker 3: two to three trillion dollars worth of cuts and.
• 24:34
  Speaker 4: To not raise taxes because.
• 24:35
  Speaker 3: The first time I said I want to balance the budget,
• 24:38
  Speaker 3: something got into this chat GPT because it just wanted
• 24:42
  Speaker 3: to raise taxes. And here we cut corporate welfare by
• 24:48
  Speaker 3: six hundred billion, all right, We cut defense spending by
• 24:53
  Speaker 3: about eight hundred billion, and still have plenty leftover. Healthcare
• 24:58
  Speaker 3: spending seven hundred billion, discretionary of federal spending seven hundred billion,
• 25:05
  Speaker 3: and social security and medicarey for four hundred billion. And
• 25:10
  Speaker 3: I saved three point two trillion and I didn't even
• 25:13
  Speaker 3: break a sweave here.
• 25:14
  Speaker 4: Michael.
• 25:14
  Speaker 1: Yeah, I'll tell you all those things you mentioned carry
• 25:17
  Speaker 1: are going to be very difficult. It says, let's cut
• 25:20
  Speaker 1: the military budget. You know, we're in the middle of
• 25:23
  Speaker 1: a few wars here, and cutting the military that's going
• 25:29
  Speaker 1: to be that's going to be difficult too. So I
• 25:31
  Speaker 1: can do it healthcare spending politically, I don't know how
• 25:36
  Speaker 1: you're going to do that. Yeah, so that's well, it's
• 25:39
  Speaker 1: going to be very very difficult. So I think up
• 25:41
  Speaker 1: with some numbers, but actually doing it politically it will
• 25:43
  Speaker 1: be very difficult. What I think is if they just
• 25:47
  Speaker 1: hold the line on spending for the next few years,
• 25:51
  Speaker 1: let the economy grow and tax revenue come up, Eventually
• 25:55
  Speaker 1: you'll come very close to balancing the budget. You're going
• 25:59
  Speaker 1: to have to cut some things out, but still you
• 26:03
  Speaker 1: need to do that because we have to face this
• 26:05
  Speaker 1: deficit and debt problem sooner rather than later. Look, the
• 26:09
  Speaker 1: interest on the public debt this year twenty twenty four
• 26:13
  Speaker 1: was six hundred and sixty billion dollars at the rate
• 26:16
  Speaker 1: we're going and the fact that when the government borrows money,
• 26:21
  Speaker 1: there's no plan in place to ever pay the money back.
• 26:24
  Speaker 1: We're in place to ever pay it back. They sell
• 26:27
  Speaker 1: a ten or twenty year bond, the bond matures, they
• 26:30
  Speaker 1: don't have money pay it back. They sell new bonds
• 26:32
  Speaker 1: and pay off the old bonds or roll over the
• 26:34
  Speaker 1: public debt. There's a lot of problems with that. One
• 26:37
  Speaker 1: major is much of this old debt was taken out
• 26:40
  Speaker 1: a one one and a half percent interest. Today they're
• 26:43
  Speaker 1: going to be three four percent interest. So you're gonna
• 26:45
  Speaker 1: double the triple the interest expense even if you don't
• 26:48
  Speaker 1: take out anymore debt. So we've got to get a
• 26:53
  Speaker 1: handle on this problem. And the first thing to do
• 26:57
  Speaker 1: is stop deficits pending and at least news and then
• 27:02
  Speaker 1: we'll work on getting debt down.
• 27:04
  Speaker 4: Okay, I guess we'll leave it at that.
• 27:06
  Speaker 3: Hey, we find your work over at newsmas Professor both Newsmax.
• 27:10
  Speaker 1: I write a column usually one or two a week
• 27:12
  Speaker 1: Newsmax Finance. You can you can see me there. I
• 27:16
  Speaker 1: do have a Facebook page where post all my columns
• 27:19
  Speaker 1: to search for on Facebook funding democracy, funding democracy.
• 27:25
  Speaker 4: Funding democracy.
• 27:27
  Speaker 3: The links are in the show notes to this interview
• 27:29
  Speaker 3: on Financial Survival Network dot com. When you go there,
• 27:33
  Speaker 3: please sign up for a free newsletter Professor Butler, always
• 27:37
  Speaker 3: interesting conversation.
• 27:38
  Speaker 4: We'll talk to you again real soon, I hope.
• 27:40
  Speaker 2: So thanks for listening to carry Letz's Financial Survival Network,
• 27:44
  Speaker 2: your solution to today's trying times. For the latest, go
• 27:49
  Speaker 2: to Financial Survivalnetwork dot com. Financial Survival Network
• 27:53
  Speaker 1: Now more than ever.