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Aug. 13, 2025 - Ron Paul Liberty Report
20:13
Big Beautiful Bankruptcy Update Deficits Skyrocketing

Instead of Draining the Swamp, the Trump Administration has stepped on the accelerator to bankruptcy. Government spending continues to spiral, with a whopping $291 Billion deficit in July alone. This is up 20% year-over-year! It is not possible for the government to fix its spending problem by vastly spending more money (that it doesn't have). The American standard of living will continue to suffer and remain under stress.

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Seven Months, Rising Deficit 00:11:15
Hello, everybody, and thank you for tuning in to the Liberty Report.
With us today, we have Chris Rossini, our co-host.
Chris, welcome to the program.
Great to be with you, Dr. Paul.
Good.
I have a job for you today.
You're going to explain to our audience what went wrong.
The budget is not balanced.
And we're going to talk a little bit about that and find out just where the mistake was, because it's seven months.
Not that you can't expect in seven months for the new administration to do much, but they've done us a lot.
Actually, the deficit's gone up.
Not a nickel really cut for the budget.
So that's a problem.
And there's some statistics now and some headlines that came out.
Here's one from yesterday.
Receipts and outlays notch record over the 10th month period.
So that's a little bit more than the seven months, but it's mostly during that seven months.
The deficit grows to $291 billion in July, despite a surge in tariff revenue.
Chris, you know, we've talked about the tariff, and the more I look at that, the sillier it gets, because they should never call a tariff that people think we're going to, you know, charge China, and they're going to pay this tariff, and that's going to lower our deficit.
The bill, the tariff has to be paid by the American consumer by taxing the companies that import could.
So the tariff is placed on our companies, and then that prices go up and our people suffer.
And I don't think you could take that tariff money and think it's automatically going to lower the deficit.
And that was one of our concerns about it, you know, when it was proposed.
But now I think the evidence is in.
The numbers just aren't there to think that we're going to balance the budget under the tariff because some of this, I think, is going to weaken our economy because if the tariffs are high and the companies that are importing are taxed and they pass that on to the consumer and there's no cuts in spending, it seems to me like things would get worse.
And it looks like it has gotten worse.
But the appetite, Chris, is still there by a lot of people, a lot of special interests and a lot of philosophical objections to what they want to do.
Their object is to perpetual war and take care of the welfare state and take care of our empire.
So I think it's a dream.
And then when we watched them try to pass some of these budgets, they had a stalemate, so they went home.
So they knew they couldn't do it.
But they're coming back.
And they're thinking if they rest and stay out of Washington, maybe there will be a miracle happen.
And when the Congress comes back in, everybody will be happy and say, you know, we think that that group of people called libertarian and free market people, maybe they have something there and they're going to call us, Chris, and they're going to say, how do we do it?
Explain to us how to do it since we didn't do so well.
But Chris, you're sitting by the phone, but I would advise you, don't sit too tight because I don't think we're going to get that call.
Chris?
No, we're not.
We're not, unfortunately, but we will report on it, that's for sure.
Yes.
$291 billion deficit for July alone.
The government has spent nearly double what they took in.
I mean, these people are so bad.
And when you compare it to last year, Biden, 20% more than the deficit year over year.
Tariff revenue, the president's out there telling us we're taking in trillions.
No, we're not.
Not even $1 trillion, not even half a billion yet.
But he's out there.
We're taking in trillions.
Tariff revenue is just 10% of the monthly deficit.
You know, our politics in this country is such a team sport where you just, you be quiet when your guy's in there, no matter what he does, and both sides do it, you know, and they play gotcha with each other every day.
But nobody's winning.
We're all losing.
Your gotchas every day.
We're all losing.
Our standard of living is declining because the government is insane.
And nobody's willing to say it.
And if Democrats were in, the Republicans would say it.
You know, they'd be, oh, my goodness, this guy is destroying us, but Trump's in.
You've got to keep quiet.
He can take us into bankruptcy.
It's fine as long as it's him.
You know, because if you say something, you know, people might think you're a Democrat or something.
I mean, it's so childish, and we're all losing.
And the Trump administration has dropped the ball big time.
You know, I have a little article here trying to explain what's going on because the news, the detail on this budget came out yesterday.
But here was an explanation.
Essentially, it repeats what you just said.
It says, gross customs receipt in July grew to about $28 billion from about $8 billion.
Oh, well, that's pretty good.
$20 billion.
That ought to pay off some debt.
A year earlier due to higher tariff rates imposed by Trump, a Treasury official said.
Then he goes on to say, this data built on tariff-related momentum.
There was that, but I think there's going to be less.
Momentum in the past couple of months as companies importing goods paid those duties.
So that's important.
They don't always put that in there.
They're recognizing that now.
It's a tax on the American consumer, the American businessman.
It's not a tax on China.
China doesn't come up.
It interferes with trade.
And I think both sides suffer from that.
Interfere by trade by raising prices.
And it raises prices here the most.
So to think that the tariff has something to do with lowering the deficit, that requires a change in philosophy on how we spend.
But Trump had a statement to say yesterday, too, about this.
This is similar to that one I just read.
He said, trillions of dollars are being taken in tariff, which has been incredible for our country.
Its stock market, its general wealth, and just about everything else.
And this was said in a truth social post.
So it has to be true.
Nobody would say that.
You're not supposed to laugh.
Oh, I wish it's too sad.
But he knows it's not true.
He has, you know, it's only $1 trillion.
It is.
You express your disgust with this whole thing.
But I think it comes from momentum, the momentum of the system, the spending system.
I don't think, I think that maybe 80% of the people went to Washington with this idea, well, I got to work in there and get my position in Congress.
And I think some of those ideas are good.
We'll cut.
You know, some might say we should cut the military and we should cut the police force and we'll do this.
And others would say, okay, well, we want to cut over there.
But there's such a thing as momentum.
And there was an attempt, you know, with the new Congress to cut a little bit.
And Musk tried to help on that.
But it was sort of just visible because there were too many people who didn't want any cuts.
You know, it was big talk.
You know, I thought it was really pretty neat that he took on USAID because that's such a wasteful organization.
And yet, even that didn't get cut.
Nothing got cut.
So will the next seven months be any better?
I think it's the philosophy of government is supposed to take care of us from cradle to grave, that we're supposed to police the world, and we can't even think about the notion of changing the monetary system where the government can't monetize debt.
As long as the Federal Reserve can monetize it, that is, put up the money that the Congress spent, there's no incentive to cut spending.
But they should have an incentive.
But they say, can you imagine the chaos if they quit buying government debt?
And I can't.
And that's where the dilemma is.
It would not go smoothly.
So they offered taking another dose of the drug of inflation.
So we'll just print the money.
Something will work out.
Maybe we'll become more productive.
And maybe China will send us some money or whatever.
So that's the, I think it's that system that is on autopilot.
And I guess the one big figure that we see there, first we have to support the empire.
Nobody wants to have America look weak.
But the other thing they want is you have to worry about interest on the debt.
So if the debt went up in these last seven months and they're still going up and to address now the big arguing about the details of the interest rate and if they allowed market interest rates, it might help because interest rates would go up and people would have to adjust.
But no, we think it needs to be lower to half a point, you know, a half a percent.
And that's going to help solve the problem.
It may for a couple people, but believe me, that is not going to solve the spending problem.
Chris.
Right, Dr. Paul.
And I want to talk about the aspect that we can't run from, and that's the interest on the debt.
And I read that $92 billion in interest alone for just this one month, and that one out of every $4 taken by the government in revenue is going to interest.
We all know what it's like.
You've heard about bankruptcy, or unfortunately, if you experience it yourself, once you can't pay the interest, it's over.
And it won't wait that long.
The world won't wait for you to officially go bust.
They will move on well before that.
But if you think about what we've lived through, as long as I can remember, Dr. Paul, I'm sure, would say the same.
The experts, the economists, the Nobel Prize, they get those prizes.
That doesn't matter.
What are you worried about?
We owe this money to ourselves.
What are you so worried about?
Their job is to convince the American people that what the government is doing, the wrong thing, is what they should be doing.
And they have done a heck of a job.
A lot of Americans fall for it.
And it's not just on TV.
It's on X with the influencers.
Why We Owe Money To Ourselves 00:05:07
Same thing.
It's just a different venue.
These people are paid, whether on TV or on X, to be an influencer, to sell you on the idea that what Trump is doing is great.
And people work jobs.
They don't have time to learn about all this stuff.
So they look for information so they can form some kind of opinion.
I get it.
You don't have all day to learn.
But you've got to be so careful.
And we should have learned this from COVID.
The propagandists are everywhere.
And the more popular they are, the Nobel Prize, millions of followers, the more you have to be careful because their incentive is to keep you on the government line.
And that's what we have, you know.
So you've got to be careful.
You know, I have another solution for this.
I've said it a few times, like a few hundred times.
And in Washington, they don't pay much attention to it, but it would solve the whole problem.
You know, just looking at Article 1, Section 8 of the Constitution, you know, would solve the problem because it itemizes, and I think there's around 20 items that is permissible and has the authority for the Congress to assume that responsibility.
And if that were done, believe me, there would be no printing of money and all these things that go on.
But there's always this objection, and I think it's a dedication because I guess I get tired hearing about democracy because the democracy that people talk about is not just democratically electing some leaders.
They're talking about democracy letting the majority rule, the dictatorship of the majority.
I can't understand why these people who call themselves, you know, the champion of the poor and the minority groups, and they're the ones who want the dictatorship of the majority.
And guess what?
The middle class and the poor always lose.
All this spending going on, whether it's the war spending and military-industrial complex, it all drifts back to the ultimate victims will be those who can't get a defense up.
But you've put all the groups together and they're a political weapon.
And that's why the attempt, you know, there will be an expression of cutting down and cutting off some of this spending.
But it doesn't happen.
It is a tough one.
And I recognize that it would be tough.
That's why I think this thing is going to continue to progress, get worse.
The markets cannot be stopped.
If the markets say that you're printing too much money, eventually the money quits working.
And I think what they've discovered right now is the money is not working so well because I don't think the number of people being counted that have trouble living with their budget today, I think that number is huge.
And the people going, I don't pay much attention to people saying, you know, I think prices might be going up or something.
The people I talk to and want to know what they say, what do you think about when you go to the grocery store?
Does a bag of groceries cost you any more than before?
You know, that is what kinds of those are the housewives and others who have to go to the grocery store.
And that, I think, is eventually what's going to wake the people up, just like it was finally, it was the people woke up about what was going on with COVID, and their kids were being punished, and the parents said, enough is enough.
And then they find out it was all a hoax.
And we're still being punished by the falsehood of doing something about medicine that's not in Article 1, Section 8.
The government should be in the business of practicing medicine.
They do a lousy job and they say, oh, the people would never get health care.
Well, I have a suspicion that they still would.
And it wouldn't take a whole lot to improve the health care in this country.
Right, Dr. Paul.
I'll finish up.
And speaking of that, I want to finish by talking to the people that are dependent on the government for money.
You know, I have older family members that are in this camp.
You know, 50% of our country somehow, in some way, receives federal money from the government.
That's a lot.
That's a lot of dependence.
And what I want to say is help yourself.
Stop supporting wars.
Stop supporting government help fixes.
They're going to do this.
They're going to give us access to this.
They're going to give us free this.
You've got to stop this stuff because it's making the problem worse.
But here's the issue for those older generations of my family and everything.
The government found a way throughout their life to keep it going somehow.
They always are able to pull the rabbit out of their hat.
Yeah, things are gotten worse, especially, you know, I've heard about how it was before in America.
Government Fixes Making Problems Worse 00:02:25
It's not like today.
But, you know, we're able to still live a comfortable life.
And the easiest thing to do is to project what was into the future.
It was this way, so the future will be this way.
That's a very big mistake, especially when we're dealing with numbers, math.
You know, you can't get out of that.
It's impossible.
And think about COVID.
There was no precedent for that.
If we could have said it was never this way.
Look what they did.
The greatest tyranny in the world by far because it was so massive.
And it was all a scam.
So we can't go by, it's been fine up to this point.
I mean, you have to stop supporting wars, spending, and who knows, maybe we could turn it around.
Very good.
You know, the tariff has been talked about a long time before it just got started.
It's been around for a long time.
But there's always false promises with tariff.
And I try to keep it simple.
I keep thinking if there's going to be a tariff, there's inhibition to the marketplace.
And even though China doesn't have to pay the tariff, it interferes with the tariff, the way it's worked, is it's supposed to eventually punish the Chinese or other countries to import or to export goods to us.
And I think that is a total fallacy.
I think the tariff is something there that actually is a negative.
And that if you find a temporary benefit, it's just going to be temporary.
But I think that when they're interfering with trade, and that's what tariffs do, they interfere with trade and they're the balance of trade and they have to have the balance of payments and all this that the planners want, that somebody suffers.
And sometimes it's just an average person.
Maybe it's somebody that likes to buy tennis shoes from another country.
And he says, oh, you know, they just got rid of all imports of tennis, tennis shoes, in America.
It has to be made in America.
Well, what if we can't compete?
Well, that should be good.
We'll buy cheap kind of tennis shoes and use our money for something else.
Tariffs and Their Victims 00:01:17
But they continue to do it.
So who suffers?
It's that person that is struggling to find a good deal.
And they're interfering with choices.
Free market choices are so important because there is no free market if you don't have free choices.
And that's what the market is all about.
This idea that you can have economic planning centralized and deal with everything from the interest rate on the money and spending money at will and telling people exactly what they can do, taking care of their medical needs, educational needs, the whole works, and then take on the empire, have an empire, and think that we're going to get away with just printing money and they're going to love the dollar forever.
We were given that responsibility or we took that responsibility in 1945 and became the reserve currency of the world.
And believe me, it's not as strong as it used to be every day.
The dollar's getting a little weaker.
And that's a statistic that the bureaucrats in Washington can't solve unless they get around to accept the principles of liberty and the principles of free markets and the principles of sound money.
I want to thank everybody for tuning in today to the Liberty Report.
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