In this episode- The media drops a major bombshell just weeks before an election. http://whnt.com/2017/11/09/as-gop-lawmakers-discuss-roy-moore-stepping-aside-state-election-official-says-he-cant-be-removed-from-the-ballot/ This piece exposes another liberal economic fallacy about inequality. http://www.washingtonexaminer.com/the-billionaire-bonanza-wealth-inequality-isnt-quite-as-bad-as-liberals-claim/article/2640255 Trade deficits are not as destructive as they appear to be. This piece explains why. https://www.investors.com/politics/editorials/whos-afraid-of-the-big-bad-chinese-trade-deficit/ Here’s a brief description of the destructive trade-offs being made in the GOP tax bill. https://www.bloomberg.com/news/articles/2017-11-10/gop-s-dueling-tax-overhauls-struggle-to-pass-a-key-red-ink-test ESPN is in big trouble. https://www.si.com/tech-media/2017/11/09/espn-layoffs-staffers-sportscenter-talent-cuts Here’s who really owns the US debt. https://www.cnsnews.com/news/article/terence-p-jeffrey/only-federal-reserve-owns-more-us-federal-debt-25t-china-12t
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Get ready to hear the truth about America with your host, Dan Bongino.
Welcome to the Dan Bongino Show.
Producer Joe, how are you today?
I'm doing well.
End of the week, Dano.
Yeah, I was at an event last night.
Met one of Producer Joe's buddies at an event.
And by the way, shout out to my friend Josh, who gave me a bumper sticker at the event.
Folks, I'm not making this up.
This is some funny stuff.
He gave me a bumper sticker at the event.
Very well done.
Professional bumper sticker.
It said, Bongino, producer Joe, 16.
And someone suggested after I tweeted a photo of it, if you can check the bumper sticker out of my Twitter account, that Jay Zabicus should be our chief of staff.
So, you know, Joe and I are strongly considering opening up a store for the show.
I've told you this a thousand times.
I'm just really busy with a thousand different things.
We need that, Joe.
Pongino producer Joe, 2024, right?
That'd be cool.
Zabacus, Zabacus 2028.
I'm Pam Zabacus and I approve this message.
Dude, I'm telling you, man.
It went eventless.
My friend Brian Chisholm, who's running for delegate up here in Maryland.
Good dude.
So very few good guys left.
All right.
Listen, I was considering taping early today's show because of my travel schedule this weekend.
Gosh, am I glad we didn't do that because there's so much breaking news, including the Washington Post, you know, bombshell.
It's funny how everything's a bombshell when it's against the Republican, but when it's an actual bombshell too, like, you know, Obama was using the power of the federal government to spy on his political enemies.
It's like everybody kind of like plays it down, you know?
But this was a serious story and it deserves our attention.
And I was hesitant to talk about it, folks, to be candid.
I feel like I owe you, you know, candor in my podcast here.
The story is this.
Roy Moore, who won the primary, who I've discussed before in the past, for the open Alabama Senate seat vacated by now Attorney General Jeff Sessions, won a primary against an incumbent, Luther Strange, who had been appointed by the former governor of Alabama.
He won the Republican primary, Roy Moore.
Roy Moore has been associated strongly with the social conservative movement, which I suggested in a prior podcast.
uh was a rebellion against democrat identity politics and the culture war and i still believe that now the allegations against more are very serious uh and i cannot emphasize this enough these are allegations folks okay i've been very careful about regardless of who but how joe how many times have we talked about hollywood like rare right we don't bring it up every day because your allegations folks i believe no matter how Guilty you may or may not be, you're entitled to your day in court.
We are still a free country.
So the allegations against Moore are that as a 30-year-old district attorney in Alabama, he pursued relationships with, and they're not, they're very clear in the piece that they were not sexual relationships, but pursued relationships, some physical, but you get what I'm saying, and then take it all the way there, but with teenage girls.
Now, folks, these are allegations.
They may be right.
They may not be.
The guy is entitled to a hearing on this.
I mean, are we going to destroy the guy's life without knowing if any of this is true?
Now, just a couple of quick things.
I got a lot to talk about today.
I don't want to spend a ton of time on this.
I'm just addressing it because you were owed by me an opinion, if you're listening to my show, and you deserve that from me.
I think the best perspective I've seen on it was provided by Ben Shapiro, who does that often.
He does a really good job.
Shapiro made the point that if these allegations are true, that he pursued a relationship as a 30-year-old with a 14-year-old girl, if they're true, they're abhorrent and they deserve condemnation.
Period.
Full stop.
Nothing left to say on that.
I don't care what your party politics are.
If they're true, he's out.
That's it.
There's nothing more to say.
Not going to give you the, as a father of a, it doesn't, as a human being, you just don't do that, all right?
End of story.
We don't know they're true, folks.
Nobody knows that yet.
Nobody knows about any of this, at least people entitled to a day in court, but Shapiro brings up an interesting point.
The reason it stuck out to me is because he uses an economic term in it.
Well, you know, I love economics, but he's right.
He says, this is a classic prisoner's dilemma.
Prisoner's Dilemma is an economic term for how prisoners, if they really thought about it, folks, prisoners could take over every prison in America, right?
Don't you think, Joe?
They outnumber the guards, what, 10, 20 to 1?
Why do they not do it?
Because there's a coordination problem.
The prisoner's dilemma is an economic term for coordination problems.
In other words, everybody's like, well, I'm not going to be the one to riot on my own because if Joey Bagadonas next to me decides not to riot, I'm the one that's going to get beat up by the guards.
You get what I'm saying?
Yeah.
He's not sure that he can bind the other guys to riot with him.
You get what I'm saying?
Right.
Now, Shapiro, rather brilliantly, says we have a classic prisoner's dilemma here with Roy Moore.
If the media and the Democrats are only going to hold the Republicans to one set of standards on these alleged moral failings, but not hold their own party to that, the dilemma, Joe, we have is then you have a class of moral degenerates as Democrats in power all the time, no matter what.
You see where I'm going with this?
Yeah.
And he gives a good example.
He says, let's just say, for an example, say these things against Roy Moore were true.
We don't know that, folks.
Give the guy his day in court here.
Or at least a sound public hearing on this.
And I'm saying that because if they turn out to be true, I'll be the first guy out there condemning this.
No problem at all.
There's no moral ambiguity about it.
But we don't know that yet.
But say you place Roy Moore against, say, a Bill Clinton.
This is not whataboutism.
This is Shapiro making a very sound argument.
Say that was the race, Joe, right now.
It's not.
I think his opponent's name is Doug Jones or whatever.
And the Democrats in the media, their standard for Roy Moore, Joe, is this.
Allegations equal fact.
He should step down and move aside.
Well, what about Bill Clinton?
Senate candidate Bill Clinton?
Those aren't even allegations.
Those have been confirmed, by the way.
He admitted to those, right?
No, no, no, that's okay.
He's a Democrat.
Then what do you have?
How are you taking the moral high ground if in that race you demand one candidate step aside because of his Republican Party affiliation, and then the other candidate, moral failings don't matter at all?
Then what do you have?
You have a class of people in office who have absolute abject moral failings and are never subjected to public scrutiny at all, notably the Democrats.
Shapiro's point is a sound one.
We're not asking that if these are true, you absolve anybody of their sins.
We're just asking that you hold everybody to the same standard, Joe.
It's not whataboutism to say, well, okay, fine.
If this turns out to be true about Moore, we'll take care of our own, Joe.
We will.
We will demand something happen on this because it's the right thing to do.
You agree?
Yeah.
Well, Democrats, it's not whataboutism to say, well, what are you going to do about Bob Menendez?
Who's Bob Menendez?
Bob Menendez is a New Jersey Senator, United States Senator, a Democrat, who is on federal trial right now for bribery.
The trial's going on right now, folks.
The Democrats have not committed Joseph to even removing him from office, even if he's convicted on federal bribery charges.
I'm not kidding.
Yeah, I know.
Yeah.
So I just want to be clear, what is the standard here?
You have one guy who doesn't only have allegations, Bob Menendez, he's on federal trial right now, meaning there is absolute probable cause that he committed these crimes.
Not beyond a reasonable doubt.
We haven't had a conviction yet.
But there is probable cause he actually committed the crimes.
We've seen no legal standard at all yet for these Roy Moore things.
He's not even entitled to a public hearing.
But if he's a Republican, he needs to go right away.
But Menendez, if he's actually convicted, gets to stay?
Shapiro's absolutely right.
This is a coordination problem between the Republicans and the Democrats.
There needs to be, Joe, a mutual agreement that if you're in political office and these allegations turn out to be true about sincere moral failings that question your very character, and there's no question these would be that, those charges, right?
Yeah.
That you need to go!
That's a very fair assessment and it's not whataboutism or nothing.
It's not distraction.
It's a fact.
If we're looking to clean up public life, we have to clean it up on both sides.
And I applaud Shapiro for bringing that up.
It's a brilliant analysis and he's absolutely correct.
And I, I'm always happy to see people using, you know, actual logic here and reason despite the, the, you know, the, it seems like now everybody's clamoring to rush out in front of the cameras and say something.
Can we find out first if these are actually true?
If they are, we'll take care of it.
Because it's the right thing to do.
All right, man, so much juicy stuff today.
All right, the Senate tax bill.
You know what?
Let me get to this first.
This is a great, interesting drudge headline yesterday.
You know, Joe, these hysterical far-left economic studies that are put out, they're like, the three richest men in the world, Jeff Bezos, Bill Gates, and Warren Buffett, have more wealth than the bottom 50% combined.
And everybody's like, ah!
We're going to die!
And of course, all the income inequality, you know, far left redistribution has jumped all over the story, showing how unfair the world is.
And you know, your simple question to most of them is, well, you know, Jeff Bezos just invented a book company that sold books online.
Why didn't you think of it?
I don't know why I didn't think of it.
Jeff Bezos, of course, owns Amazon right now, which has turned into one of the world's largest online, basically, retailers right now.
Why didn't you think of it?
I'm not jealous of Jeff Bezos.
I applaud him.
I love Amazon Prime.
The company's a little left-leaning, but they do a good service.
So this report came out.
Of course, liberals are jumping all over it.
And you know I like debunking things.
And we're going to do that right now, Joe.
All right.
Now, I'll put a piece of the show notes today, and please, Rita, sorry about the late email yesterday.
It's a long story.
We're expanding our operation, folks, dramatically due to the success of the podcast, and the logistics are tougher than I anticipated.
I'll try to get this email out a little earlier today, but there's a great, great, great piece in the Washington Examiner.
My wife will get it up at the show notes early at Bongino.com.
Please join our email list, and I'll send you these articles every day, as always.
Debunking a lot of what this story stands for.
So again, the gist of the story, it was put out by a bunch of left-leaning economists, is that the three richest men in the world have more wealth than the bottom 50 combined.
Folks, be very, very, very careful about wealth distribution analysis and wealth inequality analysis.
Why?
I had Matt Palumbo on as a guest a long time ago.
We used to do some guests, and I think we talked about this.
Forgive me if we haven't.
Maybe if you listen to the library, you can pick it apart.
Here's how this works, Joe.
Income inequality analysis, right?
When you do an income versus wealth, they're two different things, right?
Your income is what you're making now.
Your wealth is what you've accumulated over time.
It's kind of the difference between an annual deficit and accumulated debt, and Democrats confuse the two often.
Our deficit is what we're missing this year in tax funds to pay the government tab.
Our debt is that amount accumulated over time.
Wealth versus income is the same thing.
It's income.
You can do it, you know, you can discount it back however you choose to do it, but income is what you're earning.
Wealth is what you've accumulated.
Now, on income inequality studies, Joe, you'll see wealth inequality typically when you use something like a Gini coefficient, which the Washington Examiner-Peace points out.
I don't want to get too wonky here, but a Gini coefficient is basically a measure of inequality in a society, and it goes from zero to one.
One being one person owns all the wealth to zero, meaning it's perfect distribution of wealth.
Everybody has the exact same thing.
Follow me?
Wealth, measures of wealth inequality are typically higher, in other words, more inequality, Joe, than income inequality measures.
Why is that?
This is why you throw these studies out the window right away about Gates, Buffett, Bezos having more wealth than the bottom 50% combined.
Because income inequality studies rarely take into account negative income.
Meaning, Joe, if you make $80,000 a year and yet you're spending $100,000 a year, your income is essentially negative.
But it doesn't measure that.
It measures the $80,000 in income, the large majority of these studies out there, right?
Yeah.
Wealth, on the other hand, many of these studies do take into account negative wealth.
Now, I get it.
It's a little confusing.
I promise this will make sense.
Give me a second here.
The United States always, always looks worse than other countries around the world in wealth inequality studies.
Now, those of you who are putting two and two together, now you probably see where I'm going with this.
How is that?
How is it, Joe, that when you look at the, you know, like say the bottom 10% of poorest people, as they point out in the Washington Examiner piece, which is brilliant.
When you look at the bottom 10%, most of them are in North America.
Now Joe, you're a smart guy.
You're saying, really?
The poorest people in the world are in North America?
That makes absolutely no sense.
They're not in Vietnam.
They're not in third world countries.
They're not in parts of Uzbekistan.
I mean, I'm not, I'm not, I'm just saying like these are, these countries don't have nearly anything.
We're close to our wealth.
How is it that 10% of the poorest people are in North America?
That makes no sense.
Because Joe, in these countries, a lot of these countries, and he mentions China as an example, the poor don't have the ability to borrow.
So if you have no income and you're poor, you literally have no income, you're making nothing in China, you're a zero.
Not a character zero, you're a zero on the scale.
You have no income, you have no wealth, you have no money.
You have nothing.
You have neither.
But in the United States, remember these wealth studies, they measure negative wealth.
They don't do that for income, right?
This is why wealth inequality always looks worse.
You can borrow in the United States, Joe, because we have such a structured economy.
Structured meaning reasonable rules and regulations.
And we have a pretty decent financial system that spreads wealth around through free markets.
People borrow money from rich people and well-off people.
That's what banks and financial institutions do.
So Joe, if you have zero income, but you're borrowing money every year to finance your lifestyle, say you're borrowing $10,000, $20,000 a year, you have significant negative wealth, which pushes you lower and lower and lower.
So the guy in China with zero wealth, right, he has zero because he's not borrowing money, and you're negative $100,000 on wealth, Joe.
Your net wealth is negative.
You look poorer than him.
Got it.
Yeah.
Joe, is that the dumbest thing you've ever heard or what?
It's pretty weird.
Do you actually believe a poor person in the United States who's living in, say, a thousand square foot apartment with a flat screen TV and a cell phone, but has a hundred thousand in debt?
Joe, by any reasonable measure, is that person poorer than the guy in China who has zero dollars to his name and is eating like, you know, five year old rice to stay alive?
Does that make any sense to you?
Yeah.
He's not poor.
No.
He's not by any reasonable measure.
The point I'm trying to make, folks, is whenever you see these wealth studies, oh, Jeff Bezos, Gates, Buffett, more wealth, say, wait, wait, wait, wait, wait, wait, wait.
Are you measuring negative wealth?
That should be your first question.
Uh, yes, we are measuring age.
So what you're saying to me is because the United States is such a powerful economy and poor people can borrow money to finance a lifestyle other people around the world can't have, you're telling me that makes us worse off?
Let me get this straight.
Let me be clear.
You're saying I'd rather live in Vietnam with zero income and zero wealth than in the United States with $50,000 in debt?
Are you that dumb?
But folks, again, liberals are absolutely constantly devoid of facts.
The facts vaccine is powerful with them.
Their brains are immune to data and research.
We'll suck this up without doing any additional analysis whatsoever.
And I've talked about this before.
I'm pretty sure Matt and I addressed this topic because I love debunking stupid liberal myths.
It's like my pastime.
Whenever I see these stories, I always look for the scam.
Whenever you see household data, always look for the scam.
Always.
Always look for the scam, the household data.
Household data increases the number or lowers the number of people in a household.
How can you measure one household against the next?
Whenever you see household data in economics, you go, well, what do you mean household data?
What if one household has a hundred people and another household has one?
$100,000 per household.
Well, that means $1,000 per person in one household and $100,000 for one person in the other.
Households?
You don't measure household data.
That's a liberal scam.
It's the same thing with wealth distribution data.
Oh, with the United States.
Oh my gosh, the wealth inequality is so bad.
Why?
Because people here can borrow rich people's money to finance their lifestyles?
Are you that dumb?
The answer is yes, they are that dumb or manipulative.
Oh man, I saw this.
I'm like, I gotta bring this up on the show.
This is a Bongino doozy.
By the way, thanks for all the positive emails about yesterday's stupid soup comments.
Yeah, someone suggested we should put that on our line of t-shirts that eventually we'll get to there.
Liberals.
Liberals are the chicken and the stupid soup.
Caveman Joe's been a big hit too.
They're requesting a comeback, but I gotta find the right opportunity and opening.
I think the reason the show stays somewhat witty, I hope, is that we don't force anything here.
Things just happen on the show.
All right.
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Okay, what else we got here?
All right, big news yesterday on the Senate.
The Senate put out their version of... Sorry, I got post-it notes everywhere.
I don't know what I want to talk about next.
So the Senate put out their version of the tax bill yesterday, folks, and here's the big problem here.
The filibuster's killing us.
It's killing us.
Now you see why, Joe, over the last few shows, I've been getting a lot of emails about the tax bill.
Because we've talked about it quite a bit, Joe and I. Yeah.
But I've been getting a lot of emails, and in the emails they've been saying, well, Dan, can you talk about this?
And can you talk about the property tax deduction?
And SALT, state and local tax, SALT means state, you know, an acronym for state and local tax.
Yeah, yeah, we're trying to hit all that.
But the problem I tried to emphasize to you the other day on the show is what I don't want to do is I don't want to bog you down in all of the details right now on the proposed legislation from the House side because as I accurately stated as of yesterday where the Senate plan was released, again another good reason never to tape this show, A lot of that went out the window, and now there's a Senate plan.
So we're basically going to play ping pong.
But I do want to tell you a couple things.
Not to do this kind of ping pong thing and track every little change, but to show you why they're changing it.
Because again, the why matters.
It's the why they keep changing the bill that's really screwing everything up.
Folks, they're trying to do this through reconciliation.
And bottom line is this.
It's a crap process.
Reconciliation means they'll only need 50 votes plus the vice president.
They'll need 51, but the vice president will be the tiebreaker, right?
So 50 plus one will do.
Now they need these 51 votes because they chose this process where The simplest way to say it would be if you get a dollar of a tax cut, so let's say they give America a dollar tax cut on something, they'll have to make it up by a dollar reduction in spending.
This is causing all kinds of complications because as I've told you a thousand times, it requires you, Joe, To accept the premise that a tax cut is going to, quote, cost the government money.
Now, if you're a listener to this show, you know there's, outside of the Clinton surplus, there are a few things that infuriate me more than making a blanket assertion that income tax cuts cost the government money.
Because, Mike, your next question should always be, if you're a listener to your liberal friends, is show me where that's happened.
Show me.
Show me where an income tax cut has, quote, cost the government money.
You can't.
You can't show me that.
I'm not suggesting it's causal.
I'm asking you for even correlational evidence that income tax cuts have cost the government money.
It didn't happen under George W. Bush, where income tax receipts went up after his tax cut.
It didn't happen under Bill Clinton after the capital gains tax cut.
It didn't happen under Ronald Reagan with the massive income tax cuts from 70 to 28 percent.
It didn't happen under Calvin Coolidge.
It didn't happen under John F. Kennedy.
It didn't happen.
So I'm asking you for evidence.
You don't have evidence.
So that infuriates me enough that we have to deal with this, well, if we're going to cut taxes by a dollar, we've got to cut spending because we're going to lose that dollar.
You're not going to lose the dollar.
The evidence suggests otherwise.
Okay.
Now, being that we've chosen that process, Joe, What's happening here is every time they put in another tax cut, they have to put in a tax hike somewhere else to raise the money.
You see what I'm saying?
To get the neutrality in it?
To fit under that 1.5 trillion window they need to fit this in?
So, here's what happened yesterday in the Senate tax bill.
The top rate, which is 39.6, they're going to slice a point off that, and they get rid of the bubble rate.
Remember the bubble rate we talked about the other day?
I do, yeah.
The House bill has a hidden tax in there, which is basically a slice out, a carve out of the 12% rate.
All you need to know is this, if you're making 1.2 million or more, As a married couple, you're basically going to get slammed with a higher income tax rate than the top rate we have now.
The Senate bill gets rid of that.
Matter of fact, it cuts the top rate by one point to about 38%.
So you may be saying, oh, that's great, Joe.
But as I just told you, folks, because they're doing this under reconciliation and they have to find a tax hike elsewhere, it's not all good news.
Because what's the bad news?
Okay, so you get a point off at the top rate.
Great.
Here's the bad side.
The estate tax stays.
Now the estate tax is doubled to I think it's 10 million now, but it still stays.
The estate tax is a disaster.
It is absolutely decimating farm communities all across the country.
Because who has large estates?
Farmers!
And their assets are tied up in the land, which they then have to sell before they die because they can't afford the tax bill.
So that's trade-off number one.
Now I'm going to give you a solution at the end because complaining is easy.
I want to fix this thing.
Secondly, they do really well on pass-throughs.
Pass-throughs are local businesses that are not incorporated.
So if you have, say, Joe Armacost.
Joe could be a corporation.
He could file an LLC.
Or Joe could just get paid as he does now, as Joe Armacost, under his social security number.
And he pays that as pass-through income.
Now, the House bill had a rate of 25%.
The Senate bill ups that, gives him a huge deduction.
You'll basically pay close to the corporate rate now, closer to 20% of the Senate bill.
Great, Joey, right?
You're probably saying, I know you get paid this way in some respects.
You're an employee at CBM, but for conservative review, not so.
You get paid as a independent out there.
But what's the trade-off?
Yeah.
The trade-off is a one-year delay in the corporate rate cut from 35 to 20 percent.
Well, we don't need a one-year delay, folks.
A one-year delay is, to quote Joe again, save money.
There's always a trade-off and it's unnecessary.
Finally, they get rid of the SALT, that's gone.
The state and local tax deduction, that's gone.
So we're going to basically lose.
That's another It is going to be a tax hike for people who live in blue states and are rather wealthy.
There's no way around that.
We shouldn't lie to people about it.
Folks, this is a big mistake.
Here's the way around this thing at this point.
The GOP has two options.
Option number one is to scrap this filibuster altogether.
You know what, folks?
I know there are a lot of traditionalists out there who are going to say, well, if we change the Senate rules, in other words, folks, forget about these reconciliation rules, change the Senate rules to make it 51, not 60, where they need to break the filibuster.
You see what I'm saying, Joe?
Just change the rules.
Now, I get it.
A lot of you out there, that's dangerous, Dan.
Then the Democrats get in power.
Folks, I'm telling you right now, mark my words.
Earmark this podcast for future listening.
When the Democrats get in power, they're going to blow the filibuster out anyway.
At some point in the future, the Democrats are going to get rid of the filibuster.
Why not just do it now?
If you get rid of the filibuster, Joe, you don't have to go with any of these rules.
You don't have to do the dollar for dollar.
There's no trade-offs.
You see what I'm saying, Joe?
You want to lower the rate?
You don't have to find savings elsewhere.
You just lower the rate.
You tracking me?
But that requires you to get rid of the filibuster.
Folks, my humble opinion, do it now.
Do it now.
You're never going to get this opportunity again in the near future and the Democrats are going to change the damn rules anyway.
Let them later on campaign on raising taxes.
Let them do it.
Let America see what they're really about.
That's option number one.
That's the one I like.
Option number two is they could sunset these things after 10 years and still do it with only 51 and not have to worry about the rules.
So you would still get the same effect, Joe.
You're not blowing out the filibuster, but if you make these tax cuts sunset after 10 years, meaning go away after 10 years and they got to be re-upped, you don't have to go with that 60 vote threshold and you don't have to make the trade-offs.
I think that's a poor option because in 10 years they automatically go away and what'll happen is what happened under Obama.
Remember the Bush tax cuts?
Some of them were sunset too.
And you remember what happened?
Obama just didn't re-up them.
So that's why you're paying a 39.6 rate right now instead of a 35% rate because Obama didn't insist on sticking with the George W. Bush tax cuts because they sunset.
Am I making sense here?
Yeah.
So the problem with this is after 10 years we're going to lose all our tax benefits.
But folks, it is a better option than this stupid trade-off strategy we're doing now.
This is a joke now.
Every tax cut they institute, they got to find a tax hike elsewhere.
That is not the way to do this.
We should not be focused on revenue neutrality right now.
That is almost an irrelevant issue given the amount of government debt we've accumulated, folks.
Forget revenue neutrality and let's start thinking economic growth is the only way out of this.
So again, just to wrap this up, I'm suggesting option one to anyone who will listen out there, just scrap the filibuster.
The Democrats are going to do it anyway.
And at worst, go with the sunset.
But this third option of dollar for dollar trade-offs to fit under that budget window, it's just ridiculous.
It's stupid.
We're wasting everybody's time with it.
Let's just scrap that and move on.
All right.
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Let's see.
Oh, I saw an interesting story in Investor's Business Daily, which I'll put in the show notes today.
I really, really would like you to read.
It's short.
It's not overly wonky.
I try to not bombard you on the email list with too much wonky stuff because, you know, you've got busy lives out there.
But it's a really good piece about the Chinese deficit.
Why is that coming up now?
Why is that even relevant to today's conversation?
Well, Trump was in China, Joe, obviously.
I think he left yesterday.
And he negotiated 200 billion in deals, which is good.
I'd rather that happen in a private sector, but I'll take the deals rather than not.
And the topic of the Chinese trade deficit came up again, obviously a big deal.
But folks, I just want to dispel some myths about this.
And this has been... I'm always fair, I think, in our political analysis.
And I think the way we're looking at the deficit, and the way some people in the administration are, is entirely wrong.
And Investors Business Daily sums this up in a way that I think you and I have done before, but they do it really effectively, really short and sweet.
And folks, here's the gist of this.
Trade deficits are not always a bad thing.
Matter of fact, folks, when our trade deficits were at their lowest, lowest, not highest, when trade deficits were at their lowest in the United States, economic times were not so great.
They were during recessions in 2009.
Look at the numbers in the Investor's Business Daily Report.
You think I'm making any of this up?
Now, why is that?
I know the idea of a trade deficit.
I think the terminology of the word deficit makes people think like we're losing out on something.
But folks, here's what really happens in a trade deficit.
I am an absolutist on free markets, but I We do understand that we do have to have trade that is free and fair.
The rules have to be standard on each side.
In other words, Joe, you can't subject the United States to environmental regulations you're not going to subject your own country to and then say it's free trade.
Right.
Because it's not.
If you're going to dump your pollutants in a river while we have to process them, then you know what?
We really should re-evaluate trade with you because you're destroying basically your portion of the globe Expensing it to everyone else because we're paying for it.
And what are we doing in the United States?
We're responsibly processing our waste.
You get what I'm saying?
Sure.
And that's a lot of that.
I'm not saying that trade is always going to be equitable on both sides.
There's unquestionably some things we need to renew.
But folks, deficits are not always a bad thing.
What's happening in China, here are the hard numbers on the Chinese deficit, by the way.
We do a staggering $648 billion in trade with China.
That's a lot.
That's a huge number.
That's nearly a trillion dollars in trade.
That's a big deal.
Now, of that $648 billion in trade, Joe, just $169 billion is us sending products to China.
The remainder is China sending products to us.
I know that sounds bad, but folks, as I've repeatedly stated to you on the show, when we buy Chinese products, we give them dollars.
We do not give them Chinese currency.
We give them U.S.
dollars.
Those US dollars have to come back to the United States.
They're not spendable in China.
They're convertible, but they're not spendable.
No matter how you convert it, the dollar, think of it, I know that with electronic currency it's not a physical dollar anymore, but don't confuse yourself with the electronic portion.
Think of it as an actual physical dollar.
You buy a dollar of Chinese goods in the United States.
The Chinese salesman takes that dollar, that hard U.S.
dollar, back to China.
He can't spend that money there.
He has to convert it, Joe, to Chinese currency.
But what happens to the dollar?
What do you think happens in the Chinese financial institutions?
They burn it?
They have to find something to do with it too.
Someone has to take that dollar because they want to make an investment in the United States or it just sits there and eventually people would stop buying stuff because they don't, you know, they want to make sure the currencies are convertible, that they can go do something with it.
You get what I'm saying?
Sure, yeah.
So that dollar doesn't sit there.
It has to be spent in the United States or on U.S.
assets, folks.
And what's happening with it now?
Folks, it's flowing back into the United States to buy homes, to buy real estate, and it's buying U.S.
debt.
Now, you need the numbers on U.S.
debt?
You think I'm making this up?
The Chinese currently owe $1.2 trillion in U.S.
debt, because those dollars sitting in the bank have to buy U.S.
government-denominated assets, Joe, or something in the United States.
So you can either invest the money back in the United States, because you can't spend it in China, or you can buy U.S.
debt.
That's what they're doing.
Now you may say, oh my gosh, Dan, well, that's awful.
The Chinese have, and a guy sent me an article this morning from CNS News.
I appreciate it.
Good piece.
I'll put it in the show notes as well about who holds US debt.
But he insinuates in the email, Joe, that this is a bad thing.
He goes, look, the Chinese basically have us by the, uh, have us by, I think he wrote by the cajones, taking, taking one of our words from the show.
I know what it is.
I know the real word.
It's just, I think it's funnier that way.
It's a Bonginoism.
Just roll with it.
But he says they really were in trouble.
They have 1.2 trillion in US debt.
And my first response, I appreciate the email, but how are we in trouble?
No, seriously, Joe, how are we in trouble?
You gave us your stuff, right?
You gave us your Chinese stuff, whatever it is.
Chinese products, Chinese food products, Chinese services.
You gave us your stuff.
We gave you an I.O.U.
basically because you bought U.S.
debt, right?
Right.
How are we in trouble?
Now we have the stuff and all you have is a piece of paper.
Folks, if World War II or World War III, excuse me, broke out tomorrow.
World War II already happened, thankfully over.
If World War III broke out tomorrow, whose problem is it?
Is it our problem or is it the Chinese?
But we already have this stuff.
All they have is an IOU.
Folks, yes, I don't want to overly simplify the matter.
If we give them a big double-barreled middle finger and say, oh, by the way, that $1.2 trillion we owe you in U.S.
debt, we're not going to pay you back.
Yeah, that would be a big problem for the U.S.
in the long run because interest rates would go up.
Well, why would interest rates go up?
Because we would be deemed an unworthy debtor.
We would be, I mean, it'd be no different, Joe, than if I lent you money, you didn't pay me back.
And then Joe asked me a month later, hey, Dan, can I borrow $1,000?
And I tell him, uh, you know what, Joe, this time you're going to have to pay me 20%.
Well, why?
Because I charged you nothing last time you never paid me back.
It makes sense, right?
So yes, there would be a penalty for the U.S.
in the long run.
But folks, acting like the U.S.
somehow has us by the, China has the U.S.
by the cajones because we owe them money that, God forbid, World War III were to break out, we're never ever going to pay back to them.
That's their problem.
That's not our problem.
Again, I'm not suggesting that sound financial or economic policy not to pay it back.
It is, even to our enemies.
Because it deems us creditworthy and it's why you can get a mortgage right now for 4% in the United States.
Right, Joe?
Rather than 16% or so, like it was back in the early 80s.
Because we are deemed a safe investment in the United States, even when our enemies, even when our enemies invest here.
We always pay back, and I'm proud to say that, being a citizen of this wonderful country.
But I'm simply suggesting to you folks that the trade deficit is not something to always panic about.
We send them dollars, they then loan those dollars back to us.
We then get their products and essentially give them an IOU.
That's what owning debt is, an IOU.
They have 1.2 trillion in debt, saying you guys owe us 1.2 trillion.
Now we have the products they made for us and we didn't give them anything.
If we don't have to.
You see where I'm going with this, Joe?
Yeah, following right along with you, Dano.
The dollars have to be spent here, folks.
I'm not suggesting that the US, we shouldn't build our industrial base out when the free market dictates it.
I'm just saying that don't default to the panic position that deficits are always a bad thing.
When deficits have been lowest, our economy has been at its worst.
Read the piece.
The evidence is clear as day.
I mean, that's what we do on the show.
I know I'm going to get a lot of emails.
That's fine.
I read them.
Folks, I just do the facts, all right?
I'm just telling you it's real.
There are two things to take away from this.
When our deficits have been lowest, our economy's been at its lowest.
And secondly, deficits only mean that you have U.S.
dollars that you have to spend back in the United States.
Those are just facts.
Those are not in any way disputable.
Chinese folks go, oh, and one other thing on this, because this has come up.
Well, Dan, isn't that bad that the Chinese are sending dollars back to the United States to buy up our real estate, buy up our buildings?
Folks, again, if World War III were to break out tomorrow morning, do you really think we're going to respect a Chinese title over strategic U.S.
assets?
I mean, seriously, folks, I'm not messing around.
This is common sense.
Let's say they buy a strategic port in Manhattan.
Do you really think if we were to go to war with China, God forbid, that we're going to say, oh yeah, by the way, the Chinese subs, come in and dock your subs here in Manhattan because you own the port?
Are you serious?
They'd be like, beat it.
We're taking this over.
It's a strategic U.S.
asset.
Buy now.
No, no, but we have the title to it.
Yeah, hold on a second.
That's me blowing my nose at the title.
They're sending us money back here to buy stuff.
That's great.
But if it was an absolute calamity, those titles will mean nothing.
Again, I'm just saying, we should build out our assets.
That's great.
We should build out industrial base where it's appropriate.
We should absolutely seek free and fair trade, but please don't panic over deficits all the time.
It's not as big of a deal as everybody makes it out to be.
All right?
Alright, last story, there's a quick one, so I just, you know, this is one of those things where we talk about how yesterday the liberals live in a fact-free universe.
So Joe, Hollywood's obviously suffering, a topic we discuss often on the show.
Their receipts are down dramatically, people aren't seeing movies anymore, and I've attributed this, and I think many others as well, it's certainly not proprietary to me.
To other culture war, Hollywood's been waging on middle class America for a very long time.
People don't want to go to Hollywood to be lectured by people they think are idiots and people that think they're idiots, right?
Well, sports, the same thing has been happening.
And there's an article on Drudge today, I'll put in the show notes about ESPN.
Massive, massive layoffs at SportsCenter.
They are unloading boatloads of people, folks.
They are down from 100 million cable subscribers, ESPN, to 87 million.
And even worse, they're going from cord cutters, people who are dumping cable, to cord nevers, Joe, people who never have cable and never had it at all and never will.
This is really bad for them.
And again, some of that is To be fair, not all of that is due to ESPN's unquestionably left-leaning tilt.
ESPN is a left-leaning sports network.
A lot of it is just people cutting cable.
But folks, I know from conversations with friends and a massive amount of anecdotal data that a lot of people just won't watch ESPN anymore just because it's a left-leaning network.
They're just tired of it.
So we can't ignore any of that.
All right, folks, thanks again for tuning in.
I really appreciate it.
Please go to Bongino.com, subscribe to my email list.
I will get you these articles right in your email box every day.
Appreciate your time.
I'll see you all on Monday.
You just heard the Dan Bongino Show.
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