Fiat Dollar Milestone: U.S. Government Interest Payments Hit $1 Trillion!
Debt literally takes down empires. The U.S. government was never meant to be a militarized empire, since freedom and empire are mutually exclusive. But alas, the decisions to become an empire were made before any of us were born. In typical fashion, the U.S. government has overextended itself militarily around the world, engaging in endless wars. Those wars come at a severe cost, as our standard of living at home deteriorates. Debts cannot be endless. Ultimately, the interest payments will overwhelm. The U.S. government is now paying $1 Trillion in interest payments alone.
Hello everybody and thank you for tuning in to the Liberty Report.
With us today is Chris Rossini, our co-host.
Chris, welcome to the program.
It's great to be with you again, Dr. Paul.
Good.
This is Friday.
This is the day generally we talk a lot about economic policy and talk about gold and talk about why we're partners with Birch Gold.
And it doesn't take much to find some interesting topics about gold.
And today there was something that came out.
I want to start off with a message headline just shortly within hours from University of Michigan survey.
And because it doesn't talk directly about gold, but it tells you a little bit about the difficulties of understanding gold.
This came off zero hedge.
University of Michigan inflation expectations unexpectedly soared again in November.
Oh, they didn't predict it, but that means that the people are anticipating higher prices.
Shouldn't surprise the Austrian economists and people who pay a little bit of attention to monetary policy.
And also the sentiment, the attitude of the people, what's coming, it's slumped.
So that's bad news.
And of course, it usually means that they should deal with the problem of inflation.
But the way they do this is the Fed interprets this as a too healthy economy, too much activity, too much productivity.
And therefore, when there's activity like this in a free market, they think the same thing.
Oh, you cut it back.
You've got to cut it back.
You've got to have a recession to calm the markets down.
And it may happen that way if you create a recession or depression, prices fall for economic reasons.
But the whole thing is, is the reaction to this, I could look at this and say, wow, we better buy some more gold because this is bad news.
This means they're going to raise the interest rates, more costs to the government.
And today, our special issue that we're going to be talking about today is the interest on the national debt.
And it's totally out of control.
So what are they going to do?
They'll raise the interest rates.
Of course, the market's going to raise interest rates too.
And being concerned about the interest on the national debt is going to get much, much worse.
But the University of Michigan expectations has prompted the sentiment in the market, the immediate people who, what is their immediate reaction?
The Fed's going to raise interest rates.
Well, if you've decided that you would have some bonds and other things that you benefit by rising interest rates because most people that know about the market knew interest rates would come whether the Fed decides or not.
But because the anticipation that the Fed will do this, they say, well, this will give strength to the dollar.
Well, maybe they ought to look at the spending and a few other things.
But on an hour-to-hour basis, the reaction is people, even the ones who know better, but they say, well, the people are going to react and the Fed is going to do this.
So we have to react.
So what do they do?
They're satisfied and they say, sell gold.
Sell gold.
Golds are not going to go up under these circumstances.
Even though what we're listening to here, it's the problem we have, and it's the attitude.
And it's the system that the Fed's running is the reason gold started off at $20 an ounce and now it's $2,000 an ounce and it's going to go a whole lot higher.
But there's a fallacy in the Fed thinking, and the investors have to go along with it because there will be a reaction.
But the immediate reaction, matter of fact, even by the end of the day, this sentiment might change again.
Say, hey, maybe two and two equals four instead of two and two equals three or something.
They might change their mind.
So this is one thing going on.
And I wanted to, as our program moves along, I want to go over and do a little bit of a summary on the dollar, you know, and where we started and the gold prices and what was the big event.
And of course, the big event that we're going to be talking about, a lot bigger than most people have started to recognize, it was two days ago that payments on the national debt went to over a trillion dollars.
And nobody cares.
You know, they're still, you know, even this week, Republicans and Democrats were spending more money, sending more money overseas, looking for another fight someplace.
You know, it has no effect on the warmongering and the militarism that we have, and no effect on the welfare state because we have to be humanitarians.
We don't want to be accused of not liking people.
But, you know, if you had freedom, that would be the real, you know, generous offer to the people because that's where people prosper.
And people generally prosper with their civil liberties when they don't have war to worry about.
But anyway, that's a big event.
It's a seminal event.
And there's been several of those throughout the history, starting with the Federal Reserve Board.
And systematically, we undermined the gold standard.
It took over 100 years to totally destroy it.
And it's been getting weaker and weaker.
And there's accurate predictions.
And that's why people are buying gold and trying to sort this out.
And it's also one of the reasons people go to people who understand gold and actually give advice on gold.
And that's why I'm a partner with the Birch Gold Group.
And if you want to get some information, if you haven't already asked them for the information, they offer information about this very problem that we have, interpreting things, you know, by minute to minute, and why they, like I, we have the agreement, we agree on the issue that you don't do it in and out every 10 minutes like they do on Wall Street and like the Federal Reserve does.
That we know that if you print a lot of money and spend too much, the value of the dollar goes down and you have price inflation.
And it's true, even though you do have a lot of ups and downs in the middle.
So if you'd like to follow up from this little conversation and get a little more information, and you haven't done it yet, text Ron at 989898, and that will connect you with Birch Gold, and they will send you some materials to get you started if you're just starting.
But also to try to keep up with the markets and interpret what is happening and how you can make your investments related to gold.
So if you're interested in that, what you do is you text Ron, 98989A, and they'll send you materials.
There will be no charge for those materials, but it will give you some information that you need.
Information is very, very important.
Just like I emphasized, education is very important when you're thinking about a system and putting it together.
But it's also information when you're trying to survive with it.
And the efforts to survive now is probably greater than ever.
I went through the 1960s and I stored food and all these things in the 70s and I thought things were very bad.
But the foundations are much worse today than ever before.
Even though you might say, well, the numbers of people that were poor back then were more from technical thing.
In there, things were bad.
But I think the foundation, the moral foundation, the financial situation is worse.
And that's why this trillion-dollar bill every year just to pay the interest is just a start.
It's accelerating at a rapid rate.
And I would like to go ahead and put up a chart just to leave this thought with you about how rapidly this interest on the national debt is growing.
Now, there it is.
That's pretty clear.
That picture is worth a thousand of my words that I'm putting out here right now.
Interest payments on the U.S. debt, exponentially growing.
Nothing has changed.
They're still spending money.
We elect new people, and they talk differently, and they seem to be a little friendlier and maybe a little more sincere.
But it marches on because politically, it's not possible that people won't allow people who think the members of Congress and others who think you need to cut some of these things, cut the military-industrial complex, cut the welfare system, and people will be better off with more liberty.
That's the thing that we have to compete, you know, get people to understand.
So we'll keep working on that issue, and now we'll hear from Chris.
Yes, Dr. Paul, that chart is very telling and pretty scary because interest payments can bury you.
That's when the end game shows up.
And our financial situation, it's very similar to the medical debacle that we went through.
It was paved by experts.
And this financial disaster is paved by experts.
The job of an economist, a real economist, is to tell politicians what they cannot do.
Because politicians, they're driven by what the public wants.
And a lot of times, what the public wants is just not viable.
So the economist, his job, is to tell the politician the truth.
You can't give something away for free.
It's not free.
You can't fix the price of that.
Who do you think you are?
You can't fix prices.
Prices are not arrived by dictate.
You're going to create a disaster.
But unfortunately, that's not what an economist today does.
If you want to be a successful economist, you have to tell the politician that's a great idea.
And then you go to the public and explain that, yes, free health care is a great idea.
Free this, free that, and you'll become somebody in the economic world publicly.
Now, it's all a lie, but people don't really care about that.
If they can live a good life materially, they'll go on TV and say debt doesn't matter and deficits don't matter.
Just print more money.
There's always somebody that's willing to do that.
So that's what an economist has become today.
And that's why we have this financial debacle that is just waiting to hit us hard.
But again, there was nobody telling the truth.
So the Americans don't know the truth.
And down this bad road, we continue to go.
You know, the banking system prior to 1913 still had difficulties.
It was not perfect.
They suspended it during the Civil War.
And yet, there was still a lot of respect for the gold standard.
So when they would wander off and cause a recession, they always went back to the gold.
But in 1913, it was decided the bankers got together and they had the Federal Reserve Act passed.
And this was the purpose of it was to stabilize the banking system.
And just think in our short period of time in the last 20 years, how many unstable banks have we dealt with?
But it wasn't permanent.
It was bad and horrible, but it's going to get a lot worse because they were always bailed up because there was still some trust in the fiat.
Oh, but we have this pretty pressed money, so we can bail banks out and stabilize.
And as long as the banks are stable, people don't have to worry about their deposit.
Used to be even the average depositor would lose their money, you know, no insurance, no government insurance.
I don't think people are going to lose that anymore.
That shouldn't give you reassurance.
It just means that the government is going to paper everything over, and that is what the fiat is all about.
These are the warning signs: this payment on the interest on the debt is a warning sign.
But you know, they were doing this in 1913 when they were trying to pass the Federal Reserve Act.
You know, Hamilton had an argument with Jefferson over this whole thing.
It's been around for a long time.
It's been that way throughout history.
So many countries have gone down the drain when they give up and they say, oh, no, let's not live within our means.
Let's have money of real value.
And yet they always drift away because it gives the government more power until the value of the currency runs out.
And ours, I think one of the amazing things is how long it's lasted because that's more than 100 years now that we've had them attacking it.
So they had 1913, and we had our ups and downs ever since.
And then we had the depression hit us, and FDR is elected to save the day.
So first thing he does is steal the gold from the people and not allow people to own the gold.
So that's a definite attack on it.
But they were able to survive because people had to worry more about bread than they did about the gold standard, and there wasn't inflation.
So it went by and there was a lack of understanding.
But then by 1945, everybody knew there were still problems.
As the war was ending, 1944, they drew up the Bretton Woods Agreement, have a pseudo-gold standard, back it by the trust in the fiat dollar.
And they did that.
And that tided things over, and things worked.
And even though the predictions were always there, it won't work.
It won't work.
And the people who argued that case were right.
People like Henry Hazlitt, a famous Austrian economist, that said, this can't work.
This can't work.
It doesn't make any sense.
And that was ushered in a new age.
So we had the Bretton Woods until we snuck around.
Our government's did it.
We have to have big government.
We have to be the world policeman.
We have a moral obligation to keep the world safe.
It's our duty because we're a powerful nation and we have the control of the reserve currency of the world.
So, but that was doomed to fail.
And this was that day was when it was declared a failure.
It was August 15th, 1971.
And this is when Nixon said, No more gold's going on.
We are not paying you out.
Nixon's Mad Break00:11:36
We're broke.
We don't have the real money, but we'll keep sending you paper money and this will just be temporary.
So that went on, and that was a big date because it had a big impact on me.
And it actually gave me a lot of motivation to want to speak out about money and end up running for Congress.
But since then, we've been limping along, but we had a recent financial crisis in 2008, and it was still getting worse and worse.
But then we invented a new thing by the Fed, QE.
We'll not only pump in some money, we're going to buy up all the junk, all the junk bonds, because they overinvest in the government programs, put it in the housing bubble.
Everybody should have known there was a bubble, and the bubble collapsed.
But that was in 08.
And now We're in a position now where they can't stop spending.
There's too many powerful political forces.
We have a foreign policy that's doomed to fail.
And the big question is, what's going to happen next?
And that is a big question.
The one thing is, I have no confidence that we're going to get enough help in Washington that they will devise a system that will be smart and deliberate, and the people will understand why you have to start living within your own means.
No, they want money to solve the problem.
And that's what they do.
They come in and they print more money.
And yet it doesn't work.
So that's where we are.
And Chris, I'll tell you what.
I think people will remember.
People will be talking about this announcement that we went over this landmark-ish date of $1 trillion a year.
It may turn out to be a bigger one-day event than what I thought was happening in 1971.
I think so too, Dr. Paul.
And, you know, unfortunately, this is going to catch a lot of people by surprise.
And by this, I don't mean today or tomorrow, whenever.
You know, the numbers, you can't beat this.
So, and we can't expect, you know, to go to the television and to be soothed that they're going to tell you the truth.
You know, hopefully, we have a lot of precedents that we're going through of just how much this propaganda machine lies.
I mean, obviously, COVID, and that I think had a major effect on people.
However, people still go back to the TV.
I don't understand it.
Even after COVID, they'll go back.
And, you know, we went through the Ukraine thing.
And look how long that lasted.
And people were told over and over, Ukraine is winning.
They're going to win.
We have to keep sending them money, sending them weapons.
And Zelensky's meeting with actors and this and that.
It's all big show.
He's globetrotting.
And then all of a sudden, gone.
Putin, I guess, is not going to take over Europe and not going to be the next Hitler, but everybody's moved on.
So once you see this, it's like getting yourself out of a cult with this media.
So, because when you turn on that television, you're going to hear all the lies.
You'll have the Fed go, oh, we need to get up to 2%.
And now they're saying, oh, no, we need to get down to 2%.
And this week, somebody went on an advisor.
I talked about advisors my first thing.
An advisor to Biden went on television and said, I don't think there's a leader out there who wouldn't rather have the economic record that President Biden has today.
And she said it with a straight face right on television, and people watch it.
And I guess some of them believe it.
So it's important to turn away from the propaganda machine because it is not your friend.
It's your enemy.
You know, if there's one thing that Trump got right, it's that the media is the enemy.
And that's the only way.
The more people that get out and rip themselves away from it, the better off we'll be.
Very good.
You know, there was a book written back in the 1840s, 1841, by Charles McKay.
It was a fascinating book, and I still reference it because it is based, it's called Extraordinary Popular Delusions and the Madness of Crowd.
It's really a study of mass psychology and how people will march lockstep when it doesn't make any sense.
And that's been known.
You know, the one example that they use so often is the Tulip Mania that went many years ago.
And it was just a mob psychology.
But McKay points out, and the book has about six or seven of these episodes of this crazy stuff going on.
And I would think that our fiat currency history is one of these delusional things.
And right now, it's delusional to believe that we can continue to do what we're doing, continue spending, running up the debt.
And as interest rates go up, see, eventually the markets overwhelm.
And even though the government might say, well, we better make interest rates lower and they will regulate the interest rates and you can't charge any more than this.
Well, it'll just be a black market.
It's a price control.
One of the most important prices in a free market is the interest rates.
It tells us a lot.
It tells us a lot about productivity, savings, plans to invest, and all these things.
So it gives a lot of indication.
But now they'll resort to forcing it on people.
And that will not work.
And I think we are experiencing delusional attitudes about what is happening with the fiat money.
But that book was written, McKay's book was written back in the 1840s.
And he said that the total title of that is Extraordinary Popular Delusions and the madness of crowds.
And I think everybody can tell a story.
What about COVID?
It turns out it was junk, that whole argument.
And people died from bad medicine.
Good doctors went to prison and lost their jobs.
Now that's madness, but it's also very dangerous, too.
And so I think there's the madness of crowds when you think it is our moral responsibility to bring peace to the world.
If you look carefully where all these skirmishes and fighting and small wars and big wars break out, it's usually where we've been involved.
You think we haven't been involved in Ukraine for a long time?
You think we haven't been involved in the Middle East and in Israel and all these places for a long time?
So where are we going?
It's just total madness, but they will not open their minds and say, well, this is something that we have, have to deal with.
And right now, that has been my main effort is to try to work on the educational part of teaching people something about money.
It's not going to come from government schools.
It's sort of like medical schools started punishing people for talking about sound medicine.
And they're still doing this.
And so it's not going to come from the government schools.
And this is one reason why I'm involved in a lot of other people now, and it's growing.
And that is education outside the government system, which can be private schools, can be religious schools, it can be whatever schools.
It could be, you know, homeschooling, any sorts.
But there's lots of ways to escape.
But that doesn't mean it's always going to be there.
You'd think there would be no intrusion on the private practice of medicine and punishing people just because they wanted a discussion on the treatment for COVID.
That is criminal.
It's very dangerous.
And it is the madness of crowds.
McKay said people go mad in crowds like mob, mob rules.
But the sad part of his assessment was they only recover their senses one at a time.
So that makes me more content to have an approach of not pretending that I can talk to a large crowd and convert people.
Hopefully somebody did listen.
But it's one-on-one, it's education, and it has to be done with a tone that people will open their ears rather than opening their mouths and mouthing off and having all this political double talk and yelling and screaming at each other.
So the answers are out there.
I believe this world and this country is smarter on economic policy than has been for a long, has been for a long time.
But we're still in serious trouble because the people who believe in wokeism and gigantic government and all that authoritarianism, that they should rule everything, I think the cultural Marxists right now are in charge.
But I think the number of people who are starting to listen to the message of liberty, they're growing.
Chris?
That's true, Dr. Paul.
I'll finish up.
And the number of people are growing largely thanks to Dr. Paul, what he has done with his life.
You know, it's the role of government that is the key here.
When he ran for president, I remember I could hear it in my mind.
He said, you know, when he said, I don't want to run your life because I don't know how to run your life.
And I don't want to run the world because I don't know how to run the world.
What he was doing there was showing what the proper role of government is.
Because our government does think that they could run our lives and does think that they could run the world.
They can't.
They're going to go broke doing it, trying it, and we're going to have to pay the bills.
So government cannot be everything to everyone.
You cannot live at the expense of everyone else.
And everyone else cannot live at your expense.
Domestically, everything cannot be for free.
They want this for free, that for free, this for free, that for free.
And then internationally, they want to police the world.
They don't like what this guy's doing.
This guy's the next Hitler.
This guy's the next Hitler.
Over and over and over.
And they just were going broke.
So that's the philosophy that has landed us here.
And we can continue down this road.
And it looks like that's what's going to happen until the philosophy changes to where people say, you know what?
Leave the government over there.
They're nothing but a big problem.
We need to rebuild.
And this country was exceptional in that sense.
We're all human beings, everybody in this world.
But what was exceptional is the idea, the philosophy of government.
The government was supposed to be chained down.
And it broke those chains.
And now we're just like everybody else.
There's no exceptionality.
Tyranny is the story of mankind since the beginning.
So once again, if people want to be exceptional in the sense of having the proper role of government, it's in our hands.
It just, you know, it needs a lot of work and a lot of talking and a lot of speaking when everybody else just stands around and just watches everything fall apart.
Very good.
I'm going to close with a short clip from something that Powell said at a speech this week.
And it says, Powell urges Fed economists to be flexible on their forecast methods.
And I keep thinking, well, maybe he has a suspicion that they don't know what they're doing.
But they're usually very authoritarian.
Accelerate or Fall Apart00:01:17
This, this, and this.
But he was admitting, he was admitting that there were a lot of varieties and you have to be careful.
And for more people to say things, that puts him in a box.
And they have to know how many fears that they have.
But they keep thinking, well, we'll just change members, we'll change this idea, and we will adjust for this.
And we've been able to get away with it.
Excuse me.
They've been able to get away with it because we had a very wealthy country.
We had a maximum amount of freedom compared to the rest of the world.
And we had a lot of wealth and energy and a lot of freedom, which is now just sort of evaporated because the debt and the interest on the debt really tells us where we are.
And we're running out of steam.
And so this is going to accelerate.
Even though some knew in 1913 it wouldn't work.
And many more joined and made the point that this can't work.
But I think we're getting to the point where the people say, be careful.
This can't work and it's going to be serious.
So, you better start planning what it should be like when you live in a free society with sound money.