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June 13, 2020 - The Dan Bongino Show
45:11
Trumponomics: Whats Next for the Economy with Stephen Moore (Ep 1274)

In this episode I interview economics advisor for President Trump, and author of “Trumponomics,” Stephen Moore. The book is available here: Trumponomics: Inside the America First Plan to Revive Our Economy https://www.amazon.com/dp/1250193710/ref=cm_sw_r_cp_api_i_p.24EbGW66412 Copyright Bongino Inc All Rights Reserved. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Get ready to hear the truth about America on a show that's not immune to the facts with your host, Dan Bongino.
Welcome back to my interview series.
I'm really proud and honored to have on today, Stephen Moore, an economist I've followed for a long time.
He's an economic advisor to President Trump.
He's on his economic recovery task force.
A lot of you have read his material in the past.
It's absolutely terrific.
He's the author of the book Trumponomics.
We're going to get right to that.
We discuss a lot of things.
What's going to happen with this economy, where we think it's going to go.
We get into the, you know, what's going to happen with the election.
We get into the debt, what the effects are going to be on it.
This is a really fascinating interview about economics and really how it's going to affect your pocket.
So stay tuned.
You're going to love it.
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Now, Stephen Moore.
All right, as I said in the intro, I'm really happy to welcome to the show a man I've read so much material from, I feel like we're personal friends already, and a former, or an economic advisor, excuse me, to President Trump and a member of his Economic Recovery Task Force, and also the author of an absolutely terrific book, Trumponomics, economist Stephen Moore.
Steve, so great to finally talk to you on my show.
It's an honor to have you here.
Yeah, it's an honor to be with you.
Thank you so much for having me.
Yeah, you got it.
I've been reading your material and opinion pieces forever.
As I said, I feel like I have a long, ongoing relationship with you at this point.
So let me get right to it.
Given your expertise in economics, I read recently one of, ironically, Barack Obama's former economic advisors, Jason Furman.
He stated that this recession, obviously induced from this awful coronavirus that's been like a plague on our country, that the recovery from this may be different.
Again, this is Obama's former guy.
He suggested it's going to be a V with a quick rebound, suggesting that it's more like kind of a hurricane event in Florida where it hits, causes some economic dislocation, and then everybody goes back to work a couple weeks later.
Do you echo that or do you think it's going to be kind of like a checkmark down and up and then a slow drag from there?
You know, we don't really know.
I mean, it's a tough question because we never really ever have experienced anything like this before, where you just shut down the engine of an economy that had been growing.
By the way, Dan, you know, before coronavirus hit, we had the best economy in 30, 40 years.
We were booming.
We had rising wages.
We had plunging poverty rates, plunging unemployment rates.
By the way, Dan, do you know what demographic group from 2017 through 2020 had the best rise?
No, but I bet my audience would love to hear it as well as me.
Think about it.
Black Americans.
Black Americans.
That racist president created the best economy for blacks.
Here's a statistic for you, Dan.
You know, I bet a lot of people won't believe.
In three years, Donald Trump created more economic advance for blacks in terms of incomes in three years than Obama did in eight years.
You'd never hear that from the mainstream media, Steve.
They tell you the exact opposite narrative.
He's a racist!
How could he have done that?
I mean, and by the way, he narrates it very well too.
So the shame is that we, uh, we, look, I, I've been saying this from the start.
I think I was one of the first people to say it.
I think it was one of the, greatest errors in the history of this country that we shut
down our economy.
It was an incredibly boneheaded decision by mayors and governors around the country,
and it's done substantial damage, substantial damage to our businesses.
The reason I'm not quite as optimistic as, say, Jason Furman is about us coming out of this in a booming
way.
And Donald Trump's talked a lot about that.
By the way, I hope I'm wrong, but I just think we've done so much damage to our businesses.
You know, we have we're going to millions of businesses fail.
And once a business goes bankrupt, it's not like Lazarus.
You can't resurrect it.
So we've we've done a lot of damage.
I think the summer is going to be bad.
I think it's going to people are going to be surprised that they were all those jobs that were there.
Well, you know, you destroy a business.
The jobs aren't necessarily there.
But I do think by the fall, we'll start to see Some improvement, and then we come to an election.
And I think this election is really going to be decided on one issue, or mostly one issue, Dan.
And that is the question, do you think that Joe Biden or Donald Trump can lead this economy back to a great recovery?
And I personally don't think that's a very hard question to answer.
I think it's pretty obvious which of these two candidates can do that.
And Trump has a very strong line.
He can say, look, I rebuilt the American economy once before and I can do it again.
Yeah, I mean, anyone looking at this rationally can't seriously answer that question and fill in the blank with Joe Biden.
It's just, it's not reasonable based on the facts and the data.
I'm sorry, go ahead.
Just a day or two ago, Joe Biden was speaking at the NAACP today.
Did you see what he endorsed?
No, I didn't say that.
He endorsed reparation payments.
Oh, which, you know, Thomas Sowell is an interesting, I was reading a quote or actually, I'm not even sure it was because so much stuff is attributed to Thomas Sowell on Twitter.
I'm not even sure what Thomas Sowell said, but it sounded like Thomas Sowell, given that I've read most of his material.
So something like, you know, I can't believe we're holding people responsible for things they didn't do and not holding responsible people now for things they did do.
It's just, I, again, I don't, I don't get the logic of that economically.
I mean, obviously it's a historical stain on our country that it can't be fixed.
It had happened.
It can be discussed.
It can be discussed so we never repeat these sins again, but this idea of paying people for something they didn't do is quite bizarre.
But again, on this potential V-shaped recovery, and I don't disagree with what you said at all, I think we'll recover, but I think it will be a tougher slog.
One of the things that worries me is You know, now with our supply chains being globally interconnected and everything being JIT, just-in-time, you have this just-in-time delivery, you have all these very complicated multi-cross-border supply chains, that's not the kind of thing you can just stop and put a period on and then say, bang, we're going to restart again.
That's what has me concerned.
Yeah, so that's right, because the rest of the world is in a severe recession as well.
And you know, when we hurt our economy, we bring everybody down with us.
I mean, we are the hub of the world economy.
And that's one of the reasons this was so tragic, because the people who suffered the most are the poorest people in the United States and the poorest people around the world.
The left doesn't care about that.
I really do believe, I didn't believe this, Dan, A month ago, but I believe it today that the left will do anything, even destroy the American economy if that's what it takes for them to win in November.
And so I think this a lot of this was orchestrated.
I don't think it's just coincidence that we spend a year and a half on a hoax on the Russia collusion.
And from almost the moment that that that mythology was crushed, then we move to coronavirus.
And then just when we're coming into a recovery, then we have the riots in the streets.
And, you know, it's going to be one thing after another.
But it's interesting to see what's going on in America, that the red states, Dan, Florida, Georgia, Texas, Tennessee, South Carolina, Iowa, Nebraska, Utah, Idaho, those states are coming back very strongly.
And they're open for business, largely.
The problem we have is states like New York and New Jersey and Connecticut, my home state of Illinois, which is a disgrace, to some extent California, they remain closed.
It's hard to get the whole economy to grow when you've got one-third of the economy that's still in lockdown.
By the way, every one of those states has a Democratic governor.
Yeah, I mean, you have our major financial hub in New York, so yeah, I don't disagree with you.
With regard to some of the measures that have been taken on the government's end, the PPP and other type programs, which granted, I'm a deficit hawk, I'm a small government guy, and I'm principled on it.
I believe deficit spending is terrible, and I don't change my mind.
Having said that, This is different.
This was a government-enforced shutdown.
This was nothing anybody did wrong.
It wasn't mortgage-backed securities.
This was actually our government getting involved and saying, we must stop economic activity.
On that, I don't have any objection to what they did to really kind of backfill what was going to be a massive loss in income.
Having said that, you and I Both love and enjoy economics.
That doesn't make the law of economics go away.
We've poured now tons of money into the economy, essentially printed, whether digitally or not is irrelevant, it's still created.
Do you see if economic activity does pick up and productivity doesn't dramatically pick up too?
All of this money chasing the same amount of products and mass inflation?
I mean, Friedman would be turning over in his grave right now if he knew all this money was out there chasing roughly the same or even lesser amounts of goods.
Well, first of all, I hope, you know, let's go back to first roles in economics.
One of the things you talk about Thomas Sowell, he, he's certainly a hero of mine, but another hero of mine was Milton Friedman, who I, who actually knew pretty well at the end of his life.
And, you know, Milton Friedman taught us, you know, one of the most important lessons in economics.
And you remember this one, Dan, there ain't no such thing as a free lunch.
If the government can give you a dollar, Dan, the only way the government can give you a dollar is to take a dollar away from me.
You know, it's not like there's mana from heaven.
And so all we're doing is redistributing income from one person to another.
And we've basically redistributed it from productive people to less productive people.
So I was not a big fan of what we did.
And I think that the key to recovery has always been one thing.
Get the businesses open.
Doesn't matter how many trillions of dollars of spending bills Nancy Pelosi passes.
It doesn't matter how much money the Fed prints.
If you don't have people producing stuff, you know, the grocery stores are eventually gonna be empty, right?
And so the key, the reason we saw such a blockbuster jobs report for May was because the businesses started reopening.
And by the way, our group played a big part in that.
We kept making a really strong case for why these businesses had to start up.
All we needed to do All we needed to do is the one thing that many of the Democratic governors didn't do, and that is keep the elderly safe.
Dan, this is an old person's disease.
The evidence is irrefutable of that.
A person of the age of 85 has a 5,000 times higher probability of dying than someone under the age of 25.
Why in the world did we shut down our schools?
Why?
I mean, and by the way, you still got some states talking about not opening up their schools in the fall.
I'm sorry I get agitated by this because there's such idiocy.
No, you're right.
I mean, Steve, we could have taken this massive amount of money and allocated it towards payments towards our elderly and said, listen, we're going to figure and research and said, we're going to figure this out.
But we, I agree with you a hundred percent.
People with comorbidities, I think diabetes and older folks, But if you are a young, relatively healthy male or female, the risk of dying is infinitesimally small.
Of course, there's going to be, you know, anecdotal evidence of people who've had serious trouble.
But yeah, I agree with you.
This was handled well.
For school children without any kind of other problems, you're more likely to die from a bolt of lightning than from coronavirus.
So the point I'm making is if we'd been smart about this, and we knew a lot of this to go into it, but we certainly know it now.
And here's the thing.
There are seven states where they didn't keep the nursing homes safe.
New York, Connecticut, New Jersey, Massachusetts, Illinois.
I forget the other two.
They were all blue states.
This is what happens when you have Democrats running your government, whether it's the Democratic mayors or governors, they are incompetent.
Isn't it funny, Dan?
You just got me going on this stuff now.
I mean, I have to confess, I go back and forth between Fox News and CNN because I want to see what the other side is saying.
I see you.
You always do a great job on Fox, by the way.
But, you know, CNN, for weeks and weeks, remember this, Dan?
Oh, Andrew Cuomo, he should be the president.
I mean, he's so smart and he is just a brilliant guy and he's so well spoken.
And he should be the president.
He is responsible for thousands of deaths in the nursing homes, and he put sick people in the nursing homes and infected everybody.
That's the paragon of competence that the Democrats talk about?
And meanwhile, you want to talk about the hero of the day, the guy who I think is really the rising star in the Republican Party, is Ron DeSantis, the governor of Florida, who's done an amazing job.
And by the way, here's a great statistic for you, Dan.
Florida and New York both basically have roughly the same population, about 20 million people in each state.
Florida is slightly bigger.
New York had five times, five times as many deaths as Florida did.
And Florida has an older population than New York does.
And yet the people, the media is like, oh, you know, DeSantis is killing his people and, you know, and Cuomo is a superstar and it's just the opposite.
So you can't believe one thing the media has said about coronavirus.
Yeah, no, I don't disagree with you.
I live in Florida and Ron's done a fantastic job.
He's really terrific down here.
But just on the inflation thing too, I don't want to forget.
Do you see inflation?
I know, listen, I loved your comment.
Don't get me wrong.
But on the, do you see, I'm really genuinely worried about, I read a piece of National Review, forgive me, I forget who wrote it, but it was someone, if I remember correctly, we both would align with ideologically, who was predicting the potential, if something doesn't change on the productivity front, For near triple-digit inflation.
I mean, that's a big number.
That's an enormous number.
That's a potentially economy-killing number.
So no, here's an area where I just wrote a piece about the big problem in the U.S.
economy right now, other than the virus, is deflation, not inflation.
We have falling prices right now, not rising prices.
Look at what's happened.
Commodities, their price has fallen by about 25% this year.
Oil, corn, copper, wheat.
It's been a huge problem for farmers.
The CPI index fell again.
We don't have rising prices right now.
You're probably scratching your head saying, well, how can that be?
Because the Fed's been just deluging the economy with money and we're seeing, you know, we're seeing zero interest rates by the Fed.
And the answer to this puzzle is that whenever you have an international crisis like we have right now, The first thing that everyone around the world wants to buy is what?
Dollars.
Dollars.
We are still the least rotten apple in the car.
So you've got a massive demand for dollars.
And by the way, the other thing that's going on, because people are afraid, they are hoarding dollars.
So there are a lot of dollars out there, Dan, but people are almost literally burying them in their backyard like they're a treasure.
So right now there is not inflation, there is deflation.
But I take your point that if we continue to do this over time, You would expect inflation.
I mean, you know, inflation, as Milton Friedman taught us, is too many dollars chasing too few goods.
And if you've got rising amount of dollars and less goods produced, eventually you will have inflation.
Although, I would say, I'd have to say to, you know, I don't know who wrote that article about inflation, If you really believe that there's inflation, somebody has to explain to me why the 30-year treasury bond is selling at a 1.4% interest rate.
Because that's telling us, as the market believes over the next 30 years, the inflation rate will be less than 1.4%.
Now, by the way, Dan, I'm not a great investment advisor.
I would never buy one of those 30-year bonds at 1.4%.
I don't buy anything.
No, but you're not wrong though.
Even our TIPS bonds, which are supposed to be inflation protected, you'd see it there, right?
There'd be wide spreads and there's just not, which you're right.
Meaning people risking their own money and their own economic butts who know things, they're not all stupid or saying, I don't agree with you.
I just, you know, I'm being a real disciple of Friedman and being a monetary phenomenon everywhere.
Inflation, you got to wonder if this thing starts to heat up, Sooner or later, that money's going to start flowing again, and it's got to start chasing some goods, and productivity numbers just aren't high enough to justify the amount printed.
But I get your point.
I'm going to take a quick break.
We're talking to Stephen Moore, author of the terrific book Trumponomics.
Go get it.
Trumponomics, Barnes & Noble, Amazon, wherever you get your books, pick it up.
Trumponomics by Stephen Moore.
We'll be right back.
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All right, we're back with Stephen Moore, author of the great book Trumponomics, economic advisor to President Trump and a member of his economic recovery task force.
So we were just talking about inflation, Steve.
One of the ideas I really liked, in order to abide by the Friedman rule, you know, Friedman always said there's four ways to spend money.
You could spend money on yourself, you could spend money on other people, other people can spend other people's money on themselves, and other people can spend other people's money on other people.
Right?
And you spending money on yourself is always the most efficient.
Friedman was a genius because cost and quality matter.
So when you put people's money back in their pocket, it's spent efficiently.
One of the ideas I love, I'd love to get your take on, is the idea of a payroll tax cut to juice the economy.
It would mean a lot of money in a lot of people's pockets.
What do you think?
Well, you know, so I have this group called Committee to Unleash Prosperity that was formed by, get this, Dan, it's basically Steve Forbes, Arthur Laffer, it was Larry Kudlow, but Trump stole him from us, and me, and all four of us.
All four of us are in favor of exactly what you just said.
So you get your A in economics today.
Yeah, the single, what we keep urging on the president, no more spending bills, just do one thing.
You want to get Americans back to work and you want to help the small businesses.
We have 28 million men and women who run small businesses.
And as you know, Dan, they are the spinal cord of our economy.
What you do is you suspend the payroll tax between, let's say, let's start July 1st through the end of the year.
That's going to give us 7.5% pay raise for every single worker in America.
Every worker in America, even if they make the minimum wage, it's going to 7.5% boost in their paycheck.
Then on the employer side, I know you're an employer.
You employ people.
I do.
We're going to get a 7.5% reduction in our payroll costs.
Now, what would Milton Friedman tell us would be the impact of that?
Well, if you, if you reduce the cost of hiring a worker, guess what?
You're going to get more hiring.
If you pay people more to work, you're going to get people to work more.
This is just this isn't complicated stuff.
Right.
I want to hear Nancy Pelosi.
I want Trump.
See, I don't want Trump to negotiate with Pelosi anymore.
Right.
No more negotiating with that woman.
You should give a national address and just tell the American people like Ronald Reagan used to do.
This is what we're going to do.
Tip O'Neill, get behind this.
Nancy Pelosi, get behind this.
And he should say, we are going to cut the payroll tax and we're going to give every working class American a 7.5% pay raise.
Now, Nancy Pelosi, why are you against that?
And I can't wait to hear her answer.
I mean, think about it.
Reagan negotiated with a House majority of Democrats a what, 40 percentage point tax cut from 71% to 28%.
I mean, think about that.
Pelosi, I mean, I'm not a huge fan of Tip O'Neill either.
I feel like we lionize these people, but Pelosi seems to be a little different.
That's right.
But here's the point.
What Reagan did so successfully, and Trump can do this because he's so, when he talks directly to the American people, he is fantastic.
I mean, look at his three State of the Union speeches.
Those have been knocked all those out of the park.
So I want him to go over the head of Pelosi, go right to the voters.
Write to the voters.
Say, what do you want?
Pelosi wants to give the money to the governors and the mayors.
I want to give the money directly to you.
And you know what?
Not only is that good economics, it's good politics.
Because the polls show by a three to one margin, people want the money.
Remember the old line from Jerry Maguire?
Show me the money!
You're right.
I love that line.
So, Steve, shifting gears just slightly a moment here.
You're a free trader.
I'm a free trader.
I'm also a fair trader.
It does matter.
How should we deal with China?
We can't just ignore them.
They're one of the world's largest economies now.
Obviously, they're integral to the global supply chain.
How should we deal with China?
I know President Trump was committed to that deal.
I don't know where that's going to go given what happened with the coronavirus, but what should we do?
So, you know, Donald Trump, it's interesting because I've known Donald Trump now for about five years.
I had not met him until the campaign started and I had a meeting with him and I felt, we talk about this in our book, I just fell in love with the guy.
I mean, he's an amazing, just brilliant guy who is incredibly charming and one of the nicest guys in the world.
I love the guy.
And anyway, you know, we came in and we said, well, he changed my mind a little bit on trade.
No, I believe in free trade.
I've always been a Milton Friedman free trader, but You know, when you've got a communist country that is, they are no longer any kind of friend.
We are in a new Cold War with China and we have to treat them as an adversary.
They cheat, they steal.
We saw what happened with coronavirus.
I think they're going to, I think that Trump should demand at least a half a trillion dollars of reparation payments from the Chinese for the germ warfare that they spread around the world.
And I think I think we need to get very tough with China.
Now, I don't know if tariffs is the right way to do it right now.
I mean, Trump put in place a pretty good trade deal with China, I remember, just three or four months ago.
That's right.
But what I am in favor of incentives.
I spoke with Larry Kudlow just the other day.
You know, Larry's my best buddy in the world.
He's the best man in my wedding.
So he and I are very close.
And, you know, what about this, Dan?
We provide a zero tax on American companies to take their money out of China and bring that manufacturing back to the United States.
That's a great idea.
You know, one of the beneficiaries of China's rogue trade policy has always been Vietnam and other countries as well, who appear more than eager to do business with the United States.
So, yeah, it's an interesting answer because, you know, I've been really tormented by this, too.
One of my favorite other podcasts, Steve, is Russ Roberts' Econ Talk.
Russ is just a genius.
A little bit different political.
He's not necessarily a Trump guy, as you could probably tell, but he is principled.
And he's a free trader as well.
And he had an economist on, forgive me, I know you know him, but I forget the name right now.
But talking about China and how we just kind of wrongly assume that their entrance into the WTO and their economic growth would make their citizens crave liberty and more of it.
And what they've really created is the world's biggest surveillance state and really a boot on the neck of their citizens.
It hasn't worked out like we thought.
I think that's exactly right.
And I think that, you know, it's sad because I'll just correct one thing.
Look, the Chinese citizens want Freedom.
You're right.
Absolutely correct.
I'm more talking about the leadership.
I should not have conflated the two.
So very good.
And I mean, too, I mean, we've got you've got a repressive, tyrannical government in Beijing, and it is suppressing now.
And I'm worried about this.
I'm worried about Hong Kong.
I'm worried about Taiwan.
I like your idea.
Let's shift.
Let's get China out of the Supply chain and let's use India.
Let's use Taiwan.
Let's use Singapore.
Let's use Vietnam.
Vietnam has 100 million people.
It's a big country.
So I'm with you on that.
And I think China is a big problem.
And I think we will.
One thing I believe one of the reasons Donald Trump won the election.
Remember when he came down that escalator in 2015, he said China.
He reversed the course of what happened under the Bushes, and the Clintons, and the Obamas, and I think he was right.
Yeah, I don't disagree with you with India either.
I'm just constantly frustrated.
They always seem to be on the cusp of major reforms from their old labor models, and something always seems to get in the way, and it is just endlessly frustrating for me.
Vietnam is really turning cabinet.
Isn't it ironic that the country that we went to war with You know, 50 years ago is now turning.
And Steve, I was just there.
Well, not just a year ago at the Singapore Summit.
And granted, I mean, a lot of it's just anecdotal, but they love Americans over there.
I mean, they could not have been nicer.
Everywhere I went, we went to a lot of places, could not have been nicer and more welcoming.
There was, like you said, this country we went to war with, there were people still alive, obviously, who fought.
There was, I sensed, no anti-American.
There were signs everywhere welcoming everyone.
So very interesting.
Again, shifting gears a little bit from trade and taxes and inflation to debt.
You know, I'm a debt and deficit hawk, always have been.
You know, we can't run from it.
We are in a massive debt apocalypse right now.
What did Mitch Daniels call it?
The red menace years ago.
And it hasn't gotten any better under this presidency.
I get it.
I know he's dealing with a Democratic Congress.
I'm not blaming it all on President Trump, of course.
I know he's made statements about doing something about it.
But my question is, When do we reach that breaking point?
I know there's some controversy over this with the Roganoff study, whatever it was, where there's never really an exact number, but they say roughly 90% of your GDP and you start reaching that breaking point.
Well, we're there.
I mean, when does that happen where interest rates just start to go through the roof and the economy really starts to hurt?
Well, my theory on the debt, I mean, I'm a debt hawk, too.
I mean, I've been involved in the federal budget policy since I was 24 years old in 1984 when I came to Washington and worked for the President Reagan.
So I hear what you're saying.
My own opinion is right now what you need to do is make sure the economy grows faster than the debt.
And under Trump, in his first three years, that was happening.
The economy was growing so fast, you know, that your income is going up faster than your debt, then you're okay.
The problem is when your income goes down, your debt goes up, then you got a problem, right?
And so we need to stop the spending.
I don't think there's need to spend another dime.
We've already spent well over three trillion dollars on this coronavirus crisis and the lockdown.
This is why I love the idea of the payroll tax.
Just let people keep their money for the rest of the year, just for the year.
And then when we get the economy up and running, we go back to the old system.
But we cannot continue to spend.
If we were to pass the Pelosi bill, Dan, Yeah.
Federal spending as a share of our GDP would go to 52%.
That has never happened before in the history of this country.
Not even at the peak of World War II, when we were fighting the Nazis and the Japanese, did we spend 52% of our GDP.
Think about this.
That would mean that our government sector in the United States would be larger than all of the private production of all our businesses and all our private sector workers.
There's something, I mean, even, you know, Bernie Sanders' wildest dreams never thought we'd get there.
So we have to stop spending and borrowing money right now.
You know, you make a critical point about government spending as a portion of our GDP, and I try to make simple analogies with my audience.
I love economics.
We don't do it as much as we used to, given Spygate and everything else that's going on, unfortunately.
The news cycle is just overwhelming.
But the point I try to make is, think about it.
50% of our national gross domestic product being consumed by the government.
And I always say to people, what are you getting for that?
I mean, your garbage is probably picked up twice a week.
Most of you never call the cops.
You may call once a month.
God forbid, I hope you don't.
I haven't called the cops, I think, forever.
The fire department, I hope they never come to your house.
I've had to deal with the fire department once.
We had a house fire.
So, you know, I'm alive 45 years.
My interactions with government, outside of some paved roads, Really, Steve, it's not that substantial, yet you're working, collectively, us, are working to produce, and 50% of the time, we're giving the money to government.
And what Arthur Raccoon called the leaky bucket, right?
They take the government, the money, they take a cut for themselves, and then they give it back to us.
It's absurd.
You're not getting anything for your money.
Wait, let me just take that away.
Our military's terrific, too.
I don't want to leave that out in our court system.
But really, is that worth 50% of our collective effort, you know?
Kind of a weird Maybe a couple of examples of what you're talking about.
First of all, let's just take one agency, the Center for Disease Control, the CDC.
We give that agency $10 billion, not $10 million, $10 billion a year.
We also spend, we spend about $2 trillion a year on health care in Washington.
Now, but let's think about CDC, $10 billion a year.
Why do we have a Center for Disease Control?
To protect us from pandemics, right?
That's why we have this agency.
Well, if you looked at their website over the last three or four years,
they're talking about climate change, transgender issues, all this crap that has nothing to do
with protecting us from a pandemic.
Now we have a pandemic.
And if you wanna look at an agency that totally screwed up everything
from the very start till today, it's been the Center for Disease Control.
Because they had so much money and they weren't prepared for a pandemic,
which is why we paid them all that money in the first place.
So government is highly inefficient.
We've got to get the government down to about half of its size right now.
I like the idea of, you know, there's two groups of people that you can't fire today.
You know who they are?
Well, government employees are definitely one of them.
Well, I'm speaking about two groups, okay, of government employees, because you're right.
You can't fire bad cops and you can't fire bad teachers.
Why?
Those are two of our most important professions, right?
And the reason you can't is because they are members of government unions.
It's just, it's sickening that we put our kids in front of incompetent teachers.
And Steve, ironically, having been a former police officer myself, I'd make the case to you that those two subsets of people, bad cops and bad teachers, do more societal damage than any other group of people out there.
Our cops are great.
I love them.
I'm on their side.
I've always backed them up.
Our teachers, teachers changed my life.
But the bad and awful ones are entirely destroying the intellectual possibilities and the achievement and aptitude of a generation of kids.
And you know, it's a darn shame, Steve.
Steve, hold that thought.
I'm going to take one quick break.
I'm going to come right back.
I want to expound on this a little bit.
We're going to take a quick break.
We'll be right back with Stephen Moore, author of the great book, Trumponomics.
Folks, please pick it up.
Support Steve's work.
He's really terrific.
We'll be right back.
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All right, we're back with Steve Moore, author of the great book, Trumponomics.
Please pick it up, check it out.
Economic advisor to President Trump and a member of his Economic Recovery Task Force.
So, Steve, before the break, you had mentioned Bad teachers and bad police officers are being a real problem, and I agree, and the bad teachers has bothered me forever.
You know, I get it.
School choice is not a great political issue for people.
It is.
I've run for office three times, almost, but, you know, almost in horseshoes and hand grenades, almost won.
It doesn't really matter.
But one of the things I found is it doesn't resonate.
I think the reason is this.
You have people in struggling communities where their politicians keep telling them it's going to get better tomorrow and it won't.
And then you have middle class families who have pretty good public schools who are like, well, I don't want to change it either.
But the real shame of it is you have a generation of black and Hispanic youth who live in a different America than you and I do.
We've been privy to educational opportunities.
I did my MBA.
I did my MA.
I'm not patting myself on the back.
I'm just saying, I had the opportunity to go to school.
And advance my life.
And these kids are never going to get that.
They come out of 8th grade with the reading skills of a 4th and 5th grader.
It's really grossly unfair.
And I see school choice as an economic issue, not in dollars and cents, but an economic fairness issue as much as anything else.
What are your thoughts on that?
I think that one of the tragedies of what's gone on in this country in the last several weeks with all these riots is that racism is not the problem for black America.
I mean, we have less racism in America today than any time in the history of this country.
The problem for black America is two things.
One is the absence of black fathers in the homes, and the second is the terrible schools that we force upon inner city blacks.
And you can solve both those problems.
I've urged Donald Trump, just give them a voucher, let them go to a good school.
Barack Obama He had his choice for his kids where they went to school.
Why not the poor kids?
And if you did those two things that we need to put an emphasis, and this is where I think Barack Obama really let us down.
I mean, because he is an outstanding father, and I wish he had really taken a stand for black.
He just wouldn't do it, you know, because he didn't want to.
But but, you know, having a black father in the home makes all the difference in the world.
Just as a white father, too.
I mean, we need intact households to the greatest extent possible.
So I couldn't be more in agreement with you that we should really provide every family in America with a great school, and we don't.
And the great irony is this is really, sadly, I say, a conservative issue.
Sadly, because it shouldn't be.
This should be bipartisan.
You know, it's interesting, too, because Arne Duncan is one of Obama's former education secretaries there, was actually a supporter of school choice and then seemed to just disappear on the issue completely once he had the influence to do something.
The reason, Dan, the reason for this is the Democrats care more about the teachers' unions than they do about the kids.
It's just that simple.
They care more about the unions than they do about the kids.
And it is changing as a political issue, though, too, which is rewarding for me.
I noticed down here in Florida, Ron DeSantis ran on school choice and got a historically high number of female black voters to go to the polls for him.
So good for Ron DeSantis.
Steve, you've been generous with your time.
Just a couple of quick questions and we'll wrap up, but I wanted to get your opinion on, you know, Hauser's Law.
It's one of these things where, you know, this Hauser's Law is out there that, you know, no matter what the tax rates are, if they're super high, people are going to avoid the taxes.
If they're fair, people will pay them.
It basically says whatever the tax rates are, you're going to roughly raise, in the United States at least, About the same amount of money through taxation.
You just keep raising them, people are just going to avoid them and pay tax accountants instead.
What do you think, roughly, the tax rate should be if we were to have, say, one national flat tax for everyone at the federal level?
Are you in the 20, low 20 range?
Well, that's a good question.
I mean, I'm a big advocate of the flat tax.
Steve Forbes is, you know, one of my best buddies in the world.
Remember when he ran for president?
Oh yeah, that's his thing, yeah.
That really caught fire with people.
So somewhere around, you know, 18, 19, 20 percent.
And what you do is get rid of all the loopholes.
And so everybody, you know, all the big, you know, corporations and all the wealthy people don't have places to hide their money.
It is fair.
It's popular, actually.
People love that idea.
And then you, let's say every dollar you earn less than, say, $30,000 or $40,000, you don't pay tax on it.
So, you know, you're not paying tax until, you know, you're We've reached some level.
That would be great.
You could fill out your tax forms in 15 minutes.
I mean, can you imagine what would happen in the United States if we had a flat tax?
How much money would come in?
We'd just suck capital from the rest of the world.
And this is a really important point, Dan, because look, that tax plan that Joe Biden has, he wants to raise every
tax he can get his fingers on.
He wants to raise the barrel tax, he wants to raise the gas tax, he wants to raise the
income tax, he wants a wealth tax, he wants, I mean, I can't even keep track of all the taxes
that he wants. And that will do severe damage to this country. We will.
Look, I'm not one for exaggeration, so I'm being very serious here.
I believe if you get Nancy Pelosi as Speaker and you have Joe Biden as President, we will have a Great Depression.
Yeah, no, I don't disagree.
I don't see that as hyperbolic at all.
I don't think you're exaggerating one bit.
You know, it's interesting you said that.
I know one of your great friends is Larry Kudlow, who's a messaging genius too.
It's not just the economics, but I've interviewed him quite a bit on the radio when I was doing a guest work over at MAL.
And he always has a way of just kind of putting things in people's pockets and nice messaging boxes.
And he always talks about take-home pay.
Take-home pay is a messaging point.
And it's interesting because one of the points we had, we discussed on the radio in regards to this, how the taxation levels are almost irrelevant.
You're just going to get tax avoidance.
By the way, tax evasion is a crime.
Tax avoidance is a national pastime.
You know, they're two different things, right?
People pay accountants to legally avoid taxes all the time.
So one of the points Larry and I, I think made in this interview a while ago, and I wish Republicans would talk about more in a messaging front here.
Is the fact that Reagan cut the tax rate from 71% the top margin rate to 28% and government revenue, Steve, went up dramatically.
Matter of fact, it doubled when he got out of office.
That's an irrefutable fact.
Yep, it sure is.
We talk about that in Trumponomics.
In our first meeting with Donald Trump, Dan, when Larry and I sat down with him in his office there on Fifth Avenue, I know you've been there, and we sat down with him for about an hour and we showed him a chart, that very chart you're talking about.
We said, here's the 70% tax rate and then it came down to 28% and the revenues went up.
And you're right.
Revenues were $500 billion when Reagan came into office.
They were a trillion dollars eight years later when he left office.
By the way, you know where Larry Kudlow got that line about real take-home pay?
From the Gipper, from Reagan.
Reagan used to always talk about people's real take-home pay.
Yeah, he just hammered that on the radio, and I never forgot that line when I ran for office.
And he actually mentioned some interesting points that, you know, the largest take-home pay measured tax cut in American history was, at the time, was JFK.
Now, it wasn't the largest percentage point cut, but JFK went from, what was it, 91 to 70, which, when you think about it, really tripled at the high end some of the people's take-home pay after a certain margin, which I found to be a fascinating point.
And JFK obviously being a Democrat, but some of the things he fought for on the economic front, he'd be considered a Republican right now.
I was going to say that.
JFK was for a strong military, he was pro-life, he was pro-tax cut, you know, he believed in American greatness.
They would laugh him out of the Democratic Party today.
JFK was a great president and he believed in conservatives.
I mean, can you imagine a Democrat running as a pro-life guy today?
Yeah, no, it's a shame.
I mean, I ran for Congress against John Delaney, who, uh, he's not a social conservative by any stretch, but he's, for the Democrats, he's definitely economically conservative for that party and got absolutely nowhere, despite the fact that on the debate stage, Steve, he was the only sensible one up there.
It was a, you know, it was a real shame.
I mean, I vote Republican down the line, but it would have been rewarding to get a diversity of ideas and that's all lost.
Steve, I won't take up any more of your time.
This was a fascinating discussion.
We covered inflation, taxes, education reform.
You were terrific.
Please pick up Steve's book, Trumponomics, available at bookstores everywhere.
It's really an eye opener, folks.
And Mr. Moore, thank you so much.
Like I said, I've read your stuff for years.
It's fascinating to finally talk to you.
You didn't disappoint me on one bid.
I'll leave you with this one thought.
Donald Trump is going to win in November.
I feel very strongly about that.
I knew he was going to win in 2016 and he's going to win again this time.
From your mouth to God's ears, brother Steve.
Thanks for those final thoughts.
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