Ep. 545 The Most Predictable Crisis in American History!
In this episode: This explosive new figure on our national debt should trouble everyone concerned about the future. https://www.conservativereview.com/articles/eye-popping-debt-is-not-an-american-value This Wisconsin Dairy Queen owner doesn't care a bit about what liberals think of this. http://www.dailywire.com/news/20871/dairy-queen-owner-posted-politically-incorrect-amanda-prestigiacomo?utm_source=facebook&utm_medium=social&utm_content=062316-news&utm_campaign=crowder Another Democrat economist makes a poor case for even bigger government. https://www.cato.org/blog/larry-summers-conflates-economics-politics-shrinking-government?utm_source=Cato+Institute+Emails&utm_campaign=c810f7738d-Cato_at_Liberty_RSS&utm_medium=email&utm_term=0_395878584c-c810f7738d-143016961&goal=0_395878584c-c810f7738d-143016961&mc_cid=c810f7738d&mc_eid=3fd7404a34 I address this article which contains some really terrible ideas about tax policy. https://www.bloomberg.com/news/features/2017-09-12/why-american-workers-pay-twice-as-much-in-taxes-as-wealthy-investors
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I have an obligation to come on the air with data and material and research.
I can't just say, trade stinks.
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The Dan Bongino Show.
Let's jump right in because we have no time for nonsense.
Get ready to hear the truth about America.
When I was a young man, I don't remember it being sexy to want to allow a nanny state to control my life.
On a show that's not immune to the facts, with your host, Dan Bongino.
Alright, welcome to The Renegade Republican with Dan Bongino.
Producer Joe, how are you today?
Hey!
It's a good, uh, what's this, Tuesday?
Yeah.
Yep, Tuesday, man.
We're slowly recovering down here in Florida.
Oh, man, so much going on, folks.
You know, I saw a story today.
You know, I usually dig in with the hard politics and economic stories before, but this one is kind of hysterical.
I just want to open up with this one.
Ben Shapiro has a site.
He operates with some other, I think, investors and the like over at The Daily Wire.
And they have a story over there, which I'll put in the show notes today, available at Bongino.com.
This is a good one.
So there's a Wisconsin dairy queen owner.
You know, Wisconsin, the area he is in, is a particularly, you know, American values oriented place.
So he had a sign on his Dairy Queen and the sign, I love this story, He basically said, listen, we're not PC here.
We say Merry Christmas, Happy Easter, God bless America, and we pray for the troops here.
All right.
All right.
I mean, again, if you're a rational person, not a particularly controversial sign.
The sign's been hanging there for four years.
Nobody really thought anything of it.
Matter of fact, most of the people they spoke to about the sign, I think the article, by the way, is by Amanda Prestigiacomo.
I think that's how you say it.
Nobody thought the sign was particularly unusual because it's a, you know, American values, you know, God, family, country kind of place.
Again, most of America outside of liberal bastions and in, uh, you know, dominated by, which dominate big cities.
So some woman, some out of town or from Oregon comes in and remember the sign's been there four years and she decides to post on her Facebook page and to send out a message to Dairy Queen via that post that, wow, she finds this really offensive.
I just found this comical.
Listen, um, folks, Libs, specifically, who do this kind of stuff.
Nobody cares what you think.
Why do you think we care what you think?
I mean, I don't understand why, really, why do you think we care what you think about us?
I mean it's obvious through this election and through the massive backlash what's going on in Alabama right now with Roy Moore and a number of other things going on that the backlash has been severe enough that you think you would be getting the point right now that nobody cares what you think at all.
Now you care what you think and your liberal buddies in your bubble care what you think but we don't care.
We don't care what you think about our need to carry guns.
You don't need to carry guns.
Nobody's asking you.
We don't care about what you think our need to pray is, or our need to pledge allegiance to the flag, or our need to love God, family, and country.
Nobody cares.
So what do I like about this story?
Instead of genuflecting before this silly Oregonian woman who decided to make a big deal out of nothing, That basically the store gave her a big double barreled middle finger and said, you know what, now we're going to like double down and we're going to keep not only keep the sign up, but the customers in the neighborhood have really bumped up business.
And the guy said, quote, Hey, business has been good.
So I love stories like this.
And I just wanted to open up on a lighter note, given all the tragedy going on to show you that folks.
On a very serious note, you know, we can win in these culture fights.
I've done some shows over the past couple weeks where I've made the case, and I think strongly and sadly in many cases, that we are losing the culture war amongst the Iron Triangle.
You know, the media, academia, and Hollywood.
We are.
We're losing that culture war.
I mean, every new show they put on these major networks outside of like the Tim Allen show is bashing the American family.
Movies out there, you know, poke fun at the traditional American values.
I mean, there's that Superman movie a few years ago where they couldn't even say truth, justice, and the American way, and everybody was like, well, why'd you cut that out?
I mean, we're losing the culture war there, but the way we get it back is by these little fights here and there and by showing other people that the double-barreled middle finger works.
I mean, it's a little vulgar.
I'm not trying to, like, insult your intelligence here, folks.
Bear with me.
But you get what I'm saying.
Sometimes a little bit of gusto and fight and resiliency in the face of even a minor outcry like this.
This is a minor thing.
It's not a huge deal, let's be honest.
But these things start to add up and they matter because, you know, liberals will never back down.
Don't think for a second liberals are reading this.
They're going to say, oh, maybe I won't complain again in the future if I see that sign.
No, they will.
The point is when 99% of stores that have that sign up or abide by God, country, family values, right?
Start saying, I just don't care what you think.
Like, not even a little bit.
Like, here's the double barrel middle finger for you.
Eventually, liberals are going to realize that, all right, you know what, I'm not going to stop this fight, but I'm going to have to allocate my resources elsewhere.
It's a perpetual fight.
It's never going to end.
But the fight is what matters.
I mean, it was the title of my second book, you know, and it was the whole point.
The fight is what matters.
There's never going to be, the fight is never going to end.
Liberals' fight against us is never ever going to stop.
The only thing you can do is fight back.
And it's little fights like this that really matter.
So I thought it was a really good story.
Hey, one more quick one that I thought was really dumb on the, you know, listen, on the Kangster Curve, this thing is like a 90 out of 100, right?
Did you see the story about what happened in Japan?
They were having a press conference about this tick carrying this deadly parasite, I mean, excuse me, disease called SFTS.
So they do a press conference with the live tick, with the deadly disease, like a super deadly contagion.
And the tick gets away!
This is, I'm not kidding, this is on drudge right now.
The mayor of the area in Japan had to apologize.
Folks, I'm going to move on from this story because there's not much else to talk about, but I need some lighter stuff after the last, this weekend, the drama and some things that are happening right now in my house.
But I'm just, you know, I need some lighter stuff.
This is a pro tip for you.
If you have an insect or animal carrying a super deadly virus that can wipe out humanity, Put it in like a glass jar.
They took it and they put it on a piece of paper and the thing got away.
Ticzilla!
That's exactly!
I mean, Ticzilla.
This is unbelievable.
Like, don't do that.
Really bad idea.
Alright, on a serious note.
A lot of economic stories to talk about that I saw.
Some particularly disturbing, relevant to current events.
One by our buddy Dan Horowitz at Conservative Review, covering the yesterday, which was a momentous moment on the downside, not on the good side.
We, for the first time ever, at least nominally, crossed the $20 trillion dollar mark in the value of our national debt.
Yeah, folks, that's not a good thing.
We're in a lot of trouble with our national debt, and Dan Horowitz, who always does good work at Conservative Review, has a really, really good piece there today where he talks about some statistics which should drive you absolutely crazy.
He says that the current dollar value of our GDP, how we're growing, the current dollar value of our growth rate, basically.
It's been 31% since 2009.
So we're growing at that rate since 2009.
31% our GDP.
Our national debt, our federal debt, has grown by 87%.
So you're talking about nearly three times a growth percentage in percentage terms rate in debt over our actual economic growth rate.
Now folks, that's not possible.
Now, getting out of the otherworldly kind of too wonky numbers stuff, I'll just give you a real simple analogy.
If your income is growing at 30% but your debt is growing at 90%, it's only a matter of time before you go bankrupt.
I mean, Joe, does any serious person with an IQ anywhere near 100 dispute this?
Now, what's bothering me is that this is the most Foreseeable, predictable, calamitous financial crisis in global history, and nobody seems even remotely concerned about it.
And for that reason, I cannot figure out why.
You know, Horowitz points out another number here, which is disturbing as well.
That we're paying $270 billion in interest right now.
Folks, we only have a $4 trillion, I don't say only, being that the number's small, but I mean, think about this interest in terms of what we're paying every year for government.
We're paying $4 trillion.
There's $270 billion a year in interest payments now on that debt.
I mean, the entire Secret Service budget, I always use this to put it in perspective for you, was about a billion dollars.
So you're talking about a billion dollars.
You're talking about 270 times that to pay for interest on the national debt.
This is really troubling stuff, folks.
I mean, this isn't the kind of thing that should be taken lightly.
I mean, we are in real, real trouble here, and nobody wants to address it.
Now, this is one of the pieces I wanted to get to yesterday before I got lost.
I was really, as you could probably tell by yesterday's show, Very, very upset about the left and their climate change stuff.
I'm going to leave it at that.
I don't want to get back into it today.
A woman, Angela, posted on my Facebook.
She was not happy with yesterday's show.
I got a lot of positive feedback, and we got some really good listenership on it, especially for a Monday.
But she thought it was a little too hot, and I'm sorry, but I'm living in a hurricane zone, and I'm just tired.
I'm just tired, folks.
I'm tired of people not wanting to help, people lying to me, and it just mattered.
But a story I wanted to get to yesterday.
It was a great piece by Phil Graham in the Wall Street Journal.
About how our growth rates are down, and Horowitz makes a connection I want to make for you now on the show.
Current event that just happened is the 20 trillion dollar debt, surpassing that for the first time.
Horowitz makes this connection, as I was planning on doing yesterday, that this is impact, this is what's causing our growth problems in a number of respects.
The costs of government are sucking money out of the economy, Joe, that otherwise would be invested in productivity, in your business, and enhancing your business, and selling more product, and in making your product better.
So think about the numbers I just told you in terms of the national debt, and here are some other numbers from Phil Graham in that journal piece which should really bother the heck out of you.
So real growth rates, right?
Not nominal growth rates, real growth rates.
What we mean by that is like taking into account inflation.
Real growth rates have averaged more than 3% since the nation's founding.
So since we've become the United States, we've averaged 3% growth.
Folks, that's a pretty good body of evidence.
We're talking about a significant time period there.
So, the point I'm trying to make, and he tries to make in this piece, is that 3% growth is nothing unusual at all.
It's been the norm, actually, since the nation's founding, okay?
Now, as you well know, if you're a regular listener to this show, the Obama year growth rates – again, if you're a liberal listening and you deny this or you think I'm – just tune out now, because this show's not for you.
We deal with real data and facts here.
If you want to do your nonsense, go listen to the Keith Olbermann report.
He'll lie to you all day.
The Obama presidency averaged 1.4% growth.
So that's half of what we've had since the nation's founding.
And that's just a fact.
If that fact bothers you and you think it's a partisan talking point, please go listen to Keith Olbermann or Joy Reid on MSNBC.
They can lie to you all day and you can live in your delusional bubble.
Now, one of the pressing questions, because, you know, after yesterday's show, certainly, I don't want to... I burned a lot of energy yesterday on yesterday's show and had a tough time after.
I had to do the cleanup around my house, which took about eight hours.
So, but last night I slept like a baby.
I was so tired.
One of the pressing questions has been, why?
And I guess if we wanted to just do, like, some other, you know, talk shows, who some people don't know what they're talking about, that has been, well, Obama sucked.
Okay, well, that's great, but that doesn't help us.
Like, what actually happened?
Why was Obama's growth rates half of what we're used to throughout the history of the country?
Clearly something happened, Joe.
You have 200 plus years of history and you have Obama.
Something happened there, and it's not just due to, you know, his personality or the fact that people just didn't like him.
There had to be something going on.
Now, Horowitz makes the connection.
He's right, and I think it's an obvious one, but one people should be making every single day in Congress.
That when the cost of government grows, when the cost of the interest on the government grows, which is what interest on the debt is, you're not only paying for government, now you're borrowing money to pay for government and paying interest on the money you borrowed to pay for government.
Lovely.
That money has to come somewhere, Joe.
Yeah.
Come from somewhere, and that money comes from taxes.
This is one of the points you need to make to your liberal friends over and over and over again.
There is no significant difference between government debt and taxes.
None.
One is a tax now, one is a tax in the future, plus an interest payment.
There is no difference.
Got it.
It's either pay now or pay more later.
Either way, you're gonna pay.
The government gets the last word.
The IRS has a monopoly on force.
You are paying for government.
If you think otherwise, you live in a delusional fantasy land, okay?
That growth in government debt, and the explosive growth in government debt, nearly 10 trillion dollars under Barack Obama in additional debt, has had an enormous impact.
An enormous impact that Why people are not making the connection is disturbing.
In my second book, I went into this a little bit.
I talked about Mansur Olson and the idea of concentrated interest and diffuse costs.
I think people have this idea that they benefit from government more than they pay in.
Therefore, you know, Wagner's Law is, you know, that they always, but Wagner's Law is basically the idea that people are, as an economy grows and becomes more productive and a country gets wealthier, they're going to demand more from government.
Government spending is going to increase over and over and over again.
I think people really believe that on an individual level, Joe, because there's no other explanation as to why people keep voting for this.
And they do, even, Joe, candidly, even a lot of Republicans.
Yeah.
There are very few Republicans out there sounding the siren about, we're going bankrupt.
This is not going to last forever.
We are actually going bankrupt as a nation.
Something is going to happen soon.
We need to stop this.
There's nobody doing that.
And I think it's because people actually believe, whether it's through their social security payouts, Which is your, I mean, folks, I get it.
You know, I totally get it.
You're a senior.
This is all you have.
You did pay in this money your entire life.
I get it.
You feel like, okay, and you know, this promise was made to me and I've designed my life around it.
I totally get it.
I am not in any way diminishing your concerns.
I'm just going to be honest with you though.
If you're getting social security money right now, it's not your money anymore.
The money you paid in, your government already spent away.
The money you're taking now is accumulated debt that's being taken from your kids and grandkids.
I'm sorry that's uncomfortable to hear.
I'm not saying I don't understand your plight either.
I have a grandmother who's in her 90s who's thankfully still alive.
I'm just telling you that having an honest conversation, you have to accept the fact that the money you're taking now is no longer your money.
Your government spent that money.
People, some of us voted for, some of us didn't.
But by failing to acknowledge that problem and acting like we're making out more than we're paying in, well, I'm still getting my Social Security.
It's not yours.
It's other people's money right now.
I'm sorry to say that.
And, and, and, you know, insisting that we shouldn't reform it.
Even Joe, if we were to not do anything to people, say 55 and older, say, okay, listen, those promises were made, even though social security is bankrupt, your situation precludes us from doing anything about it right now, 55 and older.
So we're going to take care of people 55 and younger by, by canceling this program and incentivizing, you know, personal retirement accounts, right?
Nobody even wants to do anything about that.
Ladies and gentlemen, I mean, do you understand there's no money?
Listen to me, please.
I'm begging you to listen.
I live in Florida here.
I have argued against my own self-interest repeatedly.
So, please, anyone listening to this show goes, oh, well, what's he giving up?
He's asking us what?
To give up Social Security?
To give up Medicare?
To give up Medicaid?
Um, yeah.
At some point, maybe not people now in their, you know, again, in their old age who have nothing else.
But I'm asking people who have the financial capability, and people 55 and younger, to vote en masse that these programs, there's no money!
Do you understand there's no money?
That Social Security's own actuaries, Medicare's own actuaries, independent people, Who are trained to go in and look at the finances of these programs, have already said conclusively these programs are bankrupt.
Now I always get emails from liberals like, that's not bankrupt, we have government IOUs.
Listen, after yesterday's show again, I'm going to kind of take it easy a bit on the rhetoric, but believe me, not because I don't want to, just because I don't want to burn out myself.
I don't feel bad about it, make no mistake.
A government IOU, do you realize how dumb that sounds?
So Joe, you take money out of your wallet and you write a note, Joe Armacost owes Joe Armacost $15.
You spend the $15 and they go, oh no, we're not bankrupt, I have a note.
You have a note from who?
From me!
That says what?
I owe me money.
Well where are you going to get the money?
I don't know, but I have an IOU.
Joe, if that sounds dumb, it's because it is.
But make no mistake, that is the Democrats' only argument that Social Security has money.
They say, well, the government owes itself money, and it has IOUs, and the government's never gone bankrupt.
An IOU means you don't have any money.
That's what an IOU means!
Exactly!
We don't need Jay Zabicus for this.
No!
There is no money!
There is no money!
The fact that you've never, and by the way, In appropriate responses, while the government's never failed to pay its debts before, so did people who went bankrupt for the first time!
For the first time!
Do you get it?
Like, if Joe Armacost goes bankrupt tomorrow, and then Dan Bongino follows, it's the first time we've both done so.
It's the first time we've done so!
We've never gone bankrupt before.
Yeah, but you're going bankrupt now.
But it doesn't matter, I've never gone bankrupt before.
I have these IOUs.
But you have no money!
Oh, you know, it's frustrating because these are, and I'm going to leave you with some positive stuff because I don't like these shows to be overly, you know, macabre.
I mean, we do live in the greatest country on earth and the bottom line is, In the end, if it came down to it, we owe a lot of money to foreign governments, and there's no one who's really going to make us pay.
Now, interest rates would fly through the roof.
It would take a substantial toll on the United States.
But what's bothering me is none of that has to happen, Joe.
Like, we could fix this right now with some reasonable spending control measures.
Now, some other things from Graham.
So just making the connection here so you understand where we're going with this.
$20 trillion in debt we surpassed for the first time.
That $20 trillion in debt is taking a heavy toll on Americans' wallets, both now and in the future.
That heavy toll on American wallets is leading to low growth rates, which average 1.4% under Obama.
The standard rate throughout the history of the United States of growth has been 3% per year.
Now, here's some other explanations, not just the $20 trillion tax load and debt, but Graham has some other explanations in the Wall Street Journal piece that I find pretty compelling.
He talks about labor productivity has plummeted since 2010.
Labor productivity is the ability of a company to generate more product, At a lower cost, or more product at the same cost.
Either way, that is good for the economy.
Now, for obvious reasons.
If you're making a bunch of coffee mugs, right, or a bunch of computers, and you're pumping out 100 computers a day at a certain price, and you find out a time-saving measure, because you have a really smart employee that enables you to pump out 105 computers, You're now selling five more computers a day at the exact same cost, which means revenue, which is good, which means the company grows and the employees get more money as well because they're more productive.
Now productivity has plummeted since 2010.
Folks, to less than a quarter of our national average for the past 40 years.
So now, whatever we've been able to grow in our ability to produce stuff is at a quarter of what it's been for the last 40 years.
And one of the explanations for why the economy's struggling so bad in the growth rate, this is fascinating, Greg Graham put out there, I found this really interesting.
Is that he believes that these high taxes due to the debt load and the increased tax rates under Obama, you had the Obamacare tax, you had the hike in the income tax rate from 35 to 39.6 percent.
These were real tax hikes, folks, that are taking more money out of people's wallets, right?
One of the theories, Joe, is that investments people are making in, say, the computer factory to pump out those five more computers a day, So say it's an education for an employee who figures out a special way to build those five more computers, or whether it's just in a better, say, assembly line robotics that pump them out quicker than before, right?
Those investments in the company, even though you're selling five more computers a day, are being offset, the revenue from those five more computers, are being offset by the increased taxes you have to pay.
So in other words the taxes are wiping out the productivity gains and hence the growth rates are low because now that extra revenue which would have been used, remember because the liberal theory is the revenue makes the fat cat CEO richer, there's almost no evidence of that at all.
I'm talking the liberal line is that all the money goes to CEOs and American workers don't get anything and nobody gets anything.
That's just dumb.
That's economic stupidity.
I really have no time to address just fairy tales because it's not true.
The evidence is overwhelming.
That when the company makes money, yes, the CEO does well, management does well, stockholders do well, but pension funds do well, employees do well, and customers do well because prices come down.
If you don't understand that, you've apparently never bought a flat screen TV, which was, what, $5,000 ten years ago?
Yeah.
Now you can get a flat screen at Best Buy or whatever for $250.
So you're just not paying attention to economic reality.
You don't understand Econ 101.
I suggest you find another podcast in that respect.
But that's one of the theories out there now by Graham, which I really, I found compelling, is that these tax hikes are offsetting any gains in investment and therefore productivity's being wiped out and the economy is not growing particularly well because of it.
All right, let's see.
Okay, I got a couple more things I wanted to get to.
This is a busy news day today.
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Okay, before I jump back into a couple of these economic stories I saw, can I just... I'm asking like I need permission, you're my audience, but this is not live feedback on the show, but I wanted to address something.
I saw on Facebook this morning, I'm not going to say the guy's name because it would be unfair to him, because he's actually a nice guy.
There's a guy on Facebook I saw who's running for basically a local office position, and Joe, you may have seen him before in the studio, but he's young and he's a very nice guy again, but I saw it and it got me thinking.
I said, you know, I got to discuss this on the show today, having run for office and having some experience in this arena.
You know, folks, I know this guy, and I know him well, and I've watched him from a very young age.
He's had a job, but his job seems to be mostly politics.
And I'm urging you to be very skeptical, if not extremely skeptical, of people whose only career, significant career, has been in the political arena.
I don't trust it.
And the reason I don't trust people who've done that is starting too early in politics, you never learn those life lessons.
You know what I'm saying, Joe?
You've never taken the fall.
You've never been there.
I know you've run into guys.
See, Joe works at a morning show in Baltimore where politicians come in and out all the time.
And I'm not saying that people who've had jobs before that, whether they were in the military or cops like me or Secret Service agents or working lawyers or public defenders or doctors or whatever they may be, are inherently going to be perfect politicians either.
Well, I'm just telling you that there's a life experience that goes along with age and an employment history, and frankly, we've taken a few falls.
Yeah.
Losing some money and a bad investment, you know, being successful and a good investment.
There are lessons learned from both.
And when you're, you know, 20, 21, 22, and you've been in politics since you're 18, and that's it, I would be very skeptical about people.
Because one, the life lessons, and number two, and then I'll move on here.
But it's an important point as we all get more active in politics, thankfully, on the conservative side.
You know, your political bank account when you're young and you get into politics very young, Joe, becomes littered with IOUs.
And I brought this up intentionally with the debt conversation, you know, because we're talking about IOUs.
I've run for office a couple of times now, and I know what it's like.
I know what it's like to almost win.
I know what it's like to win primaries.
I know what it's like to lose general elections.
And, you know, each one has its ups and downs.
But I'm telling you this.
If you ever decide to run for office, there are going to be people trying to bargain with you and get you to sell out.
It is an absolute guarantee.
And as I've said to you repeatedly, because I don't pretend to be holier-than-thou, it is at times very tempting to do so, especially when you think they're the little sellouts.
You're like, oh, it's just the little ones going to notice.
And I always tell the story about a lobbyist doing an issue that was so—believe me, even if I explained it on the show, you'd have a hard time understanding it.
And I felt very strongly one way, just like, ah, just take the other position in this PAC and, you know, they may be able to help out in the future, but the PAC is not going to have you in there if you support the other position.
I said no.
And I was glad I did, because even though that was one of those, like, little sellouts, as a buddy of mine used to say, once you let the evil in, it never goes away, and it just grows geometrically.
And your political bank account becomes littered with those types of IOUs.
Hey, remember when you were 20, you told me you supported this?
Remember when you were 25, and you told me you supported this?
Remember?
And all of a sudden, by the time the person's 40 years old or 50 years old, and they're serving in the U.S.
Senate somewhere, or they're running for president, they owe a half a million people political favors.
And those half a million people I've got news for you aren't you.
So be very skeptical.
I just want to bring that up because I saw it on Facebook today and I was like, oh gosh, here we go.
Another 20 year old with zero life experience, you know, running for office.
I just think, you know, it's time to go out and see the world a little bit first.
Okay.
A really good piece today in Cato, which I'll put in the show notes, a former treasury secretary, Larry Summers, who used to be a reasonable guy.
Quick story about this guy, by the way, I remember, um, When I was an agent I did a site at Carlton on the Park in Long Island for him.
He came out, he was the Treasury Secretary at the time, and you know when you do a site and you're a young guy, a site advance as an agent for a protectee who's pretty low profile like the Treasury Secretary, at least in Secret Service terms it's a pretty low profile protectee.
You know, you get some assets, but you don't get a ton of them.
And it's really just kind of you and some other, you know, operational entities you're working with.
It's not a big, massive footprint like the President.
I remember sitting there watching him give the speech at this area, and there was a lady sitting next to me, and the lady could not stop commenting on the fact that he kept rubbing his nose.
But he wasn't sick.
And I just, I'll never forget.
I don't know why, like that sticks out, this story about Larry Summers, but he really, it's funny.
I actually just rubbed my nose.
I talk about subliminal messaging.
He kept rubbing his nose like every two seconds.
And it was like, what the heck?
And I don't read anything into that at all.
I just remember that story.
It just was weird.
It was almost like a tick, you know, like he had, there you go, tick.
That was unintended by the way, from the tick story before.
But yeah he kept doing it and the lady was like and she and you know you're in the back of the room and it was a small room and it was quiet and you know you know when you want to tell someone like okay like you've said that 10 times he's rubbing his nose like it's people are starting to pay attention to you now other than the speaker like time to pipe down I just I always remember that but he has a there's an interesting critique of him in a Cato piece which I'll put in the show notes which I I'm I'm asking you to please read it's it's a little wonky but not overly wonky And it's a critique of a speech he gave where he's talking about and defending this exponential growth in government.
Wagner's Law, folks.
Remember that government is going to continue to grow as the economy gets richer and richer and richer as people make more demands on government.
Now, there are a lot of theories about that, too, about why Wagner's Law is.
I'll suggest one that Schumpeter, a famous economist, put out there a long time ago, which is that as people get richer, Joe, and more prosperous, they start to notice the plights of others.
And as they notice the plights of others, they look for intervention and someone to fix it, and the natural conduit for that for a lot of people, sadly, is government.
You get what I'm saying?
In poor countries where everybody's poor, nobody notices that the other guy's poor.
They're worried about fixing their... If you're worried about eating your next meal, you're not worried about your neighbor eating their next meal, typically.
You gotta fix your own situation.
But, when you're a rich country like the United States, We're a very moral and ethical country, too, and you see your neighbors starving, or you see people living in urban poverty, your desire is to fix it.
And one of the theories behind that is that the natural conduit for people to do that is sadly government, which I think is the worst conduit to fix poverty, of course.
But you see, Joe, why that would explain this ever-growing government?
As people become richer and richer and richer, they have less and less to worry about themselves, so they start worrying about others.
Like, well, now we have to fix people in, you know, in flood zones, so we're gonna have to ensure, you know, and that's irrelevant to current events.
Yeah, I never thought of it like that before, but yeah, I understand what you're saying.
Yeah, like government becomes that conduit when in reality it's most likely, you know, a free private enterprise that's a better way to do that.
So that's an interesting theory.
But Summers is offered four reasons why he thinks government will never shrink.
And I found this very, very compelling because the reasons he gives, at least the reasons he gives, excuse me, out of three of these four, Joe, reasons government will never shrink.
are reasons caused by the government itself.
So you have like the unbroken leg fallacy again where government breaks the leg and it offers more of the poison to fix the broken leg.
I mean the government creates these problems yet Summers is saying because of these problems, he's got it all backwards, that because of these problems the government will never shrink.
Now here's number one.
He says an aging population is going to put pressure on entitlement spending.
Folks, I've already discussed this with you, just opening the show.
I don't know any other way to explain this to you.
The aging population's pressure on entitlement spending is causing the bankruptcy of the aging population.
If the aging population of the United States would have kept their own money in their own accounts, even at a 2 or 3 percent growth rate, you would probably have the same, if not more money right now, than you would have from the government check you're getting from Social Security, which is borrowed money from your kids.
Do you understand that?
This is one of those, scratch your head, like, Larry, did you think this through?
He's a very smart guy, by the way, he's not dumb.
But did you think this through?
Like, an aging population is going to put pressure on entitlement spending, so therefore we need to grow government.
There's no money now!
So now we're going to have to grow government more to pay for no money, no money we have now because the government already spent your retirement savings now?
Think about what he's saying.
Just rationally walk yourself through this.
You gave money to the government for your retirement.
Government spent that money and then some.
It's now borrowing money to give you for your retirement because it has none of your money left.
And the reason we should grow government is because the government needs more money now to pay for the debt on the money they paid you when they took your money to give to someone else.
Okay.
Okay!
Thanks, Larr!
Thanks for clearing that up!
I mean, that makes sense.
Again, instead of proposing a very rational and reasonable solution.
Larry Summers.
And again, he's a very smart guy.
He's a nice guy, too.
He was never, you know, a particularly mean guy.
He was nice to me that day.
But this is just straight-up dumb!
Instead of saying, okay, this hasn't worked, this model, we've already spent seniors' retirement money, we're going to take care of the seniors now who've paid in.
But anyone 55 or younger, we're going to allow, allow, using that word again, I mean I'm using leftist terminology, just strike that down, but we're going to ditch the program and people are going to keep their own money and invest in their own retirement.
And then the lefty comeback is always, by the way folks, are you prepared?
Well, if you allow people to do it, people won't save their own money.
The government didn't save your money.
What are you talking about?
So your proposal is to give it to the government that already spent it?
Do you understand there's no money?
You gave your money to the government thinking it's there.
It's not there.
The check you're getting today is borrowed money.
It's not your money.
It's your kids, your grandkids, and your grandkids' grandkids.
If you don't understand that, you don't understand basic economics.
This is not complex.
Making the argument that, well, people won't save for themselves.
The government, you're making a worse argument.
So you're going to allow government to steal your money.
Does that make any sense?
It's frustrating.
Alright, here's number two.
He says rising income inequality basically needs a government fix.
This one I find comically hysterical.
Because you want to pinpoint most of the reasons for growing income inequality, again, just like the government spending your social security money, so the government's at fault for the entitlement crisis, the government is at fault here too!
So when it comes to common sense solutions, like why do you have people stagnant in the middle class and lower income categories, Joe, and poor folks?
Why do you have them stagnant?
Why aren't their incomes growing?
One of the big reasons, one of the enormous reasons, is job skills and education.
Job skills and education not suited to a current market that markets at a prosperous IT, healthcare, Why aren't more poor people and middle class people stuck in stagnant incomes moving into jobs where incomes are growing?
Because they don't have the education.
Well, how would we fix the education system?
Well, we could allow parents school choice.
Folks, this is such an obvious solution, but people like Larry Summers... You know what?
Let me be fair.
I don't know exactly where he stands on school choice.
He may be a little more nuanced.
So I'll be fair, but most liberals will never support school choice, despite the fact, Joe, that it's an obvious way to reduce income inequality by fitting people with the skills necessary for jobs where the incomes are growing up.
But our incomes are maturing.
But they don't want to do that.
Another one we talked about before.
It's why I want to discuss this piece.
The capital gains tax.
Where Phil Graham brought it up before.
The government taking taxes on investment.
That's what a capital gains tax is.
Those taxes are overriding growths in productivity and are stagnating company revenues, which aren't allowing them to pay workers more.
But rather than entertain that, Summers' solution, ridiculously, is yes, let's introduce more government at a more expensive cost to fix the income inequality problem that government is at least 80-90% to cause of.
Oh my gosh, this is frustrating stuff.
I'll give you a number four and then I'll go back to number three because the four is, I do agree with him on this one.
That rising geopolitical threats are inevitably going to lead to some increased military spending in the future.
I do think there are a lot of productivity gains to be had at the Pentagon.
I do agree with him there.
I mean, you know, the guns and butter approach.
We've been doing a butter approach for a long time and relinquishing the guns approach.
I do agree with him there that that may lead to some spending increases in the future in the military arena.
So he's not wrong on number four, but let's go back to number three because this is another, you know, comical misstep by a guy who's very smart.
He says the service sector, notably healthcare, prices keep rising and there's going to be more demands on government to meet the costs of those rising healthcare prices.
Folks, if you're not scratching your head at this one, head, wait, hair, hand, head, desk, boom, boom, boom.
If you're not banging your head off a desk on this one, I don't know.
I mean, this is almost like, did he, before he said this, did he think this through?
I mean.
Yeah.
Folks, Obamacare, right, introduced a new level of government spending into the healthcare arena by subsidizing families over, in some cases, who make $90,000 or more with healthcare spending.
When you introduce a third-party payer effect, the government is a third party paying people's bills, costs always go up because you disconnect the supplier from the person demanding the product.
If the customer's not paying, he doesn't care what the cost is.
If the doctor knows the customer's not paying, the doctor doesn't care how much he charges either.
He gets as much as he can.
That's a simple explanation as to why costs go up when government spends money.
It is an almost one-for-one.
Government spending goes up, Watch the price of the product go up.
You've seen it in public universities.
You've seen it in private universities.
You've seen it in health care.
Wherever the government's involved, costs go up.
So this one's kind of funny, Joe, because he blames the government.
I mean, he thinks the government spending has to go up because health care spending's going up.
I mean, not considering what?
That Obamacare and the increase in government spending is driving the costs.
I mean, it's just, Larry, really, you got to think this stuff through.
I mean, people listen to what you have to say.
So the Cato piece pretty much dismantles that.
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Alright, one more quick story.
You know, there's a Bloomberg piece I really don't like, but I'm going to put it in the show notes.
I know some people get annoyed.
Why are you giving clicks to these liberal pieces like this?
But this one's worth putting in because it really explains a lot about the liberal mindset.
And just quickly, this Bloomberg piece is kind of a hit piece on why wealthy people They think pay lesser tax rates, not obviously amounts, but lesser tax rates than people who work for a living.
It's a little bit of a hit piece.
It tries to be fair, but it doesn't do a particularly good job.
I think the liberal bias shows.
And there's two particular points in this piece that I think are a little bit absurd.
One, they say, You know, well, capital gains taxes, which, Joe, just to be clear, you earn money, right?
Joe earns money from conservative review.
So let's say conservative review writes Joe a check today for whatever, $1,000 today for some service he provides.
Let's say Joe takes that $1,000 and Joe pays a federal income tax rate or combined tax rate, it doesn't matter, state federal income of 30%.
So Joe gives $300 of his $1,000 away.
Joe now has $700 left for himself, right?
Pretty clear.
If Joe were to take that $700, folks, which has already been taxed, right?
You got $1,000, you now have $700.
So you've already been taxed at a pretty heavy rate, by the way.
One of the arguments they make in the piece is, well, you know, we should tax that investment, the proceeds on an investment he makes, because it's really not double taxation, because he's only getting taxed on the gains.
I know that sounded screwy, but just bear with me for a second.
The lady's saying that, oh, we should tax investment, because think about it, even though Joe already paid taxes on his income, if he invests that $700, say, in Snapchat, and Joe makes $200 over the next three, four months in additional money, right, so now it's worth $900, he bought it for $700, the stock price goes up.
Joe only has to pay taxes if he cashes out.
I mean, it's a little more complicated, but this is just a simple explanation.
On the 200.
So the author of the piece is saying, well, you're not really paying taxes on the whole thing.
You're just paying taxes on the $200 you earn.
No, no, no, no, no.
You have this all wrong.
You're not reimbursed for the taxes when you lose money.
You're not paying taxes because it's money at risk.
Income is not money at risk.
Joe, you get paid by conservative review, right?
Yep.
Has the check ever bounced?
No.
Me either, thankfully, because we work here.
That was a serious question.
I mean, it's never bounced.
They always come through.
It is not money at risk.
Your job in the future, and mine may be at risk if we don't, well, thankfully to you, it's not a problem, but if we didn't produce listens, But it's not income at risk.
When you invest money in Snapchat or Chipotle, I lost a ton of money in Chipotle.
The money's there.
The government doesn't reimburse you.
The government doesn't go, oh Joe, you lost, let's say you invested that $700 and lost $200, now you have $500.
Does the government give you a reimbursement?
Does the government say, we're going to reimburse you that $200?
It's money at risk you've already paid taxes on.
So saying that, oh, you only pay taxes on the You know, and yet there are certain write-offs and everything, but it's not nearly equivalent to what you pay in taxes when you make the money.
It's absurd.
It's ridiculous.
You've already paid, but it is double taxation.
And there's another point on that I wanted to make.
They say, well, and also, you know, even though the money's a tax, we should tax capital gains because a lot of that money's inherited.
So, Joe, if you inherited that $1,000 from, say, your parents, right, and they gave you that $1,000, and let's say you only get $700 because they had to pay taxes on it.
So they, you know, pass, sadly, and they leave you the $700.
The taxes have been paid!
The point the lady tries to make is, well, you know, you inherited it.
Okay, so?
So?
So Joe's parents paid the $300 in taxes, and now, because they earned it, The heirs shouldn't benefit, but the government should?
That's your logic?
Like, oh no, God forbid Joe benefits from investing that money.
Joe didn't earn it, so he shouldn't benefit, even though the parents wanted him to?
Folks, this is just like economic stupidity.
I'll put it in the show notes.
Wow.
Give it a look.
It's helpful to understand the far-left ideology.
I hate to give clicks on stuff like that, but it is helpful for your long-run ability to debate with your leftist friends.
All right, folks, thanks again for tuning in.
I really appreciate it.
Thank you for all the reviews on iTunes, by the way.
We're up to 477 reviews from 200.
If you can get to iTunes on your computer and the podcast app, there's a review tab.
Please give us a review.
We really appreciate it.
Thanks a lot, folks.
I'll see you all tomorrow.
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