Deficits & “Stimulus” Checks = More Inflation & A Huge Bubble That Will Burst
President Trump is considering "stimulus" checks (again). We should all remember the last time that President Trump sent out "stimulus" checks. It was the "CARES Act," which ignited the massive inflation that we're still suffering from today. How can a government that has no money, because it racks up record deficits, be in a position to give out "rebates"? Tariffs (that Americans overwhelmingly pay) don't put the government books into the black. The government is way in the red. Why tax Americans with tariffs to begin with?
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.
Are all things okay, and we have nothing left to talk about?
And we're going to talk about baseball or something?
I think not.
I think that our goal in life is trying to introduce some ideas to people to explain why we're in such a mess, because I personally believe it shouldn't be that complicated.
And Chris, you've been doing this with us for a good many years, and we will continue this fight because this is where I'm optimistic that people will change their minds and listen, and young people respond.
And the situation looks horrible, but I don't consider it that bad because there are people that have awakened and are woke up in the good sense of the word, and they realize that the problems that we have, and maybe it has something to do with the Constitution.
And I think a few people was awakened the other day when a couple good members of Congress, especially Thomas Massey, was really behammered by the administration and the president.
And he was the worst person in the world.
I got to get rid of this guy.
His sin was he followed the Constitution better than anybody else in the House of Representatives.
And he has to be taken out.
And, of course, that's a softbook taken out, taken out of the Congress.
So that is so disappointing.
And yet, we have the same disappointment of the administration.
The foreign policy we're not happy with.
And the spending, especially, we're not happy with.
But we want to talk more specifically about some of the things going on because there was an announcement now, you know, that the administration, Trump, proposes, that means most likely he'll get it.
He's the boss, a new stimulus checks up to $2,000 for America.
Well, you know, one of his last things he did in his first administration was he passed an act which makes today's efforts, you know, sort of mediocre.
But he got passed at the end the CARES Act.
$2.2 trillion it went.
And the tragedy there was bailing out all the nonsense caused by COVID.
And they said, well, that was a pandemic and we had to.
We had no choices for that.
But nobody, but when people know and understand, they realize that that whole effort and the government's involvement in that was a cause of a great deal of harm and suffering.
And it spent a lot of money.
And it finally is getting out that the medical explanation by our government was completely wrong.
And there were the people, of course, that took the vaccine were in a worse category, a worse situation than those who said enough is enough.
So something has been learned there.
I saw an announcement the other day that there's a lot less young people taking the vaccine.
So the parents are acting out and doing something, as they did during COVID, because it was when they got disgusted with what the government was doing.
It finally dawned on, why do we have to wear a mask if we're walking on the beach?
The whole thing got crazy.
And then when you realize when the economy crashed, oh, that's no problem.
$2.2 trillion, we'll get that passed.
We'll bail them out of that in no time.
So we're up against that again right at the moment that there's so many problems going on, but I would say it's my opinion at least that the problems that we're facing, whether they're foreign policy, whether it's domestic policy or Federal Reserve, very, very serious.
But in some ways, I still worry a little bit more about our own government, how they handle it, and how they have contributed to these many problems, whether it's foreign policy, monetary policy, the debt, and on and on.
So there's no way of saying, well, the government has to respond and take care of it.
Where if you come to the conclusion, they are the participants.
They are the ones that have brought this about.
And right now, what are we getting?
Unfortunately, what's in the news is more of the same.
So I don't expect it to solve the problems.
And yet, the answers are available to us, Chris, and that's what we like to talk about.
But it is a mess.
And I know you've given us some serious thought to this.
So let me hear from you.
Yeah, Dr. Paul, that the fact that President Trump is bringing up stimulus checks again is really something else.
It's an eye-catcher, because as you point out, that CARES Act was such a disaster in the effects of it.
And that's what Thomas Massey was fighting.
He was alone, I remember.
And Trump's calling him a third-rate grandstander.
Massey is pointing out this is going to create massive inflation.
It's exactly what happened.
We are suffering from the same inflation today.
That's how long.
Now, Biden added fuel to the fire.
Let's not, we won't forget that.
But President Trump is the one that lit the inferno with the massive inflation.
And now here he comes again with more stimulus checks that he's proposing.
First of all, if everything is so great, what do we need stimulus for?
It's because we all know it's not great, you know, and President Trump says inflation is dead, and we all know inflation is not dead.
And how can you give rebates or checks when you don't have money yourself?
The federal government is running record deficits.
They don't have the money.
It's not like they have a pile of money.
Look at all these surpluses.
Let's give some back to the people.
No, they're borrowing and printing money.
And that means that they're going to have to borrow and print money to give us these stimulus checks, which means one thing: higher prices, more inflation.
It's more of a tax on us.
So the whole thing is terrible.
It's a continuation of his terrible policy from the first administration.
So I guess, in a sense, we shouldn't be too surprised.
No, and I think a lot of people are starting to realize and hear about the inflation that causes hard assets to go up in value.
And what do they do about it?
What can they do about it to protect themselves?
So that is a big deal.
I remember so clearly, and I've talked about this a lot, and that is August 15th, 1971, the Sunday evening when Nixon came out and we got off the gold standard by executive order.
We were on a mediocre gold standard then.
Americans weren't even allowed to own the gold.
But it meant that we were essentially on some type of a gold standard from the beginning of our country because the founders wanted us to have a sound currency after the disaster with the continental dollar.
So this is something that has happened.
And now we're starting to think about who a new currency is necessary.
And the world's preparing for it.
Nobody knows exactly what's going to happen, but they've sort of about given up on the dollar.
Yet if you read some statistic, it was just announced, I guess, to reassure Americans, we're still pretty rich, and we are, and that is that if you take the gold at Fort Knox and elsewhere, supposedly being there, and revalue it at market value, because they just left it theoretically at $42 an ounce.
But if you change it, it's worth more than a trillion dollars in gold.
So they have a nest egg.
And I remember in 1971, 72, when the gold started to explode upwards, it was 35.
And when it got to 70, 80, there were rumors going around.
The gold bugs would talk about it.
And they said, you know, there's a plan.
When gold gets up to $150, they're going to revalue the gold and go back on the gold standard.
And people sort of used that as a target.
But it didn't take long to know that was just talk.
Hardly anybody knows when gold was $150 because it went to $150 so easily.
It went to $1,000 easily.
And here we are, almost $4,000.
But the question is, is the gold there?
And why did it was it mentioned way back in 1971 that when governments go off the gold standard or do it, they always retain, you know, a residual of gold because they always know they have to go back to gold.
And so somebody will say, well, this is par for the course.
They're retaining an amount of gold that they can use as a way of going back to gold.
And it may work for some people, but I don't believe that's possible under our conditions today.
Because if you revalued and had a gold standard at $200 an ounce or something like that and guaranteed it, you know, you'd turn in all your Federal Reserve notes and take the gold like de Gaulle did.
That would help bring down the Bratton Woods Agreement.
So now they're saying, you know, well, we're at a point.
Now, is $4,000 gold going to reassure people that as long as the government has this gold and they can mark it up and get to $4,000 plus?
You know, it's not enough.
It's not enough.
Right now, there's a lot of people who are anticipating $6,000 gold with the amount of inflationary function we have of our currency.
So if they said, we're going to go on the gold standard at $4,000 an ounce, some people might turn in their Federal Reserve notes, but they won't believe it, you know, because they're going to say, not at $4,000, because it's going to be higher.
So even with it, this sort of bugs me and bothers me that we went from worrying about a gold, a new gold price of $150 and going back to a standard.
Now we're at $4,000 and they don't know what to do because BRICS have a head start on it.
And we have the most gold of all the countries.
But if you add up the gold of the various countries, you know, they could have more.
And it all depends on what the governments do.
4,000 could work.
That is, if we changed our form of government and that we quit spending the money and quit having these special stimulus checks and CARES packages, this sort of thing.
As long as we do that, these numbers mean nothing.
And that's why we talk about the general philosophy of limited government and non-tangling foreign policy.
Then you can start talking about a sound currency.
But you can't do all the stuff that we do, even with $4,000 gold or $5,000 gold.
We would have to change our habits of spending money and running up these huge deficits, Chris.
Yeah, and it doesn't look like that's anywhere on the horizon, unfortunately.
But that doesn't mean that we're not going to keep saying it.
President Trump is talking about, oh, we're making so much money from these tariffs.
Well, you're taxing us.
You know, 86%, according to Goldman Sachs, of the tariffs are paid by us, Americans.
That means only a measly 40, 14%, excuse me, are paid by the foreigners, which we were told this is going to get slapped on those foreigners.
Now, it was slapped on us.
So why tax us to begin with, only to give some of it back because you're making all of this money?
Cut out the middleman.
Get rid of the tariffs.
You want a stimulus?
Get rid of the tariffs.
Well, they say, oh, no, no, no.
We have to do this.
We get the argument for the tariffs.
We just don't agree with it.
And it's not working.
Manufacturing jobs, 78,000 have been lost this year alone.
The clock is ticking on President Trump's administration.
We're almost a year done, and we didn't even stay even with manufacturing jobs.
We lost many, many of them.
And we hear about all these trillions that are going to be invested here.
President Trump wants to make it look like what he did was right.
You know, and we take the opposite.
You have to lower the burden on the American people, not increase it.
It has been all increase, all across the board, the burden on the American people and giving us stimulus checks.
While on the surface, it looks good.
I would like a check for $1,000, but we're going to pay triple that when we go into the supermarket and everywhere else.
So it's a bad deal for us.
We're better off not having the inflation to begin with.
But we'll see what happens.
You know, one thing that I worry about, and it deserves some concern, is the attitude of the administration moving toward a militancy that makes me very uncomfortable.
Information Dictates Economic Credit00:09:23
You know, whether it's the many wars that we're involved in and the dictatorial position that we have taken and the coups that we have participated in, you'd think that if we take over and get involved, say, in Ukraine, there has to be an ending point.
We finally had back in the old days, there wasn't an end point in tragedy with Vietnam.
But they will do this.
But right now, it's not moving in that direction.
The militancy is used to dictate.
And we have more and more.
Daniel and I talked the other day about how many hotspots do we have?
And we got up to the big hotspots.
We sort of sort of ridiculed the idea.
How many other hotspots?
Well, you know, whoever imagined we would be at a point now where we practically have declared war in Venezuela.
I know there are no angels and I know they're not libertarians, but I know one thing that we're not that either.
And if we believed in sovereignty, we wouldn't be trying to run the world.
But the thing is that there's a limitation on it, self-limited by economic policies, because this is the danger that all big empires have gotten into.
They spread their wings too far, they stretch it too far, and they think they can get away with telling everybody else what to do, and they don't have to worry about paying the bills.
Well, you do, because the Roman Empire were inflationists.
How they finally came down.
It was an inflationary problem.
And it happens all the time, and yet we never learn any lesson.
But we've been indoctrinated and brainwashed through our educational system.
And also, that system has contributed, I think, in many ways the confusion over fascism.
Those terms are thrown around.
But I think any type of subsidy and help designed to help the people, like the 20,200, the bailout for COVID.
So help the people, save the people.
And it cost money and backfired.
It did solve the problem.
So we do that.
It's always a pretense of helping the people.
At the same time, corporations benefit.
And we've talked so much about corporatism and crony corporation and corporatism.
And that is one of our biggest faults.
And the misunderstanding, because where I think the real link to fascism is by the connection of big government and big companies.
Believe me, there's a lot of that going on.
And I consider it very dangerous, especially now a movement to own a partnership in these corporations.
And the American people say, well, if it'll help, I guess I'm for this and you know, this sort of thing.
So I think there's a lot of things going on that a better understanding is necessary.
And we have to counteract the nonsense that has passed out from our universities.
Of course, who runs the new university?
We send them the money and we can dictate to them.
And we can even dictate to them the meaning of freedom of speech and First Amendment rights.
So it's a mess.
But I also think that this mess is waking up a lot of people.
They woke up during the COVID crisis and mothers and parents have decided they were going to take care of their kids.
And right now, the parents of children are not getting the vaccines like they have before because they have been taught that they're not all automatically safe and you can just dump this stuff into all kids without much forethought.
Chris?
Yeah, that's true, Dr. Paul.
I'll finish with my closing thoughts.
The only way out of this mess is for President Trump to do the opposite of just about everything he's doing.
I mean, we'll give him some credit on the border, some credit, because that's the government's job.
If we don't ask much of you, they do everything else that they shouldn't do, but protect the border.
And the government didn't.
They let everybody in.
So now they're actually doing their job.
So we'll give President Trump credit there.
But barring that, you know, it looks bleak.
And barring a major reversal in his attitude and policies, we're going to have to accept that we have tough things coming our way, whether it be inflation, whether it be war or multiple wars, since he's multiple wars, not just one.
So we have to then do what?
Take care of our immediate surroundings like we did during COVID.
We only live in our immediate surroundings.
We don't live out there.
We can talk about out there like we do on the show, but it's the decisions that we make here.
Dr. Paul has to make his decisions where he is.
I have to make mine where I am.
And we'll try on our show to, you know, give good ideas to help others.
So that we have to do if President Trump takes us into the abyss.
And the other thing is speaking up.
You know, we all have to.
We can't just take care of our local situations.
We have to put good ideas out there.
You don't have an X account, create one.
Speak up.
If you watch this show, hopefully you have good ideas.
Don't let them stay within you.
Speak up because the government does.
When they have enough pressure, they back off.
But they know that if that pressure doesn't come, they're going full steam ahead.
And they know that most people will just shut up and won't say anything and just take their beatings.
So help resist that and get an X account.
You can still speak up freely on X and share the good ideas.
Very good, Chris.
And I want to follow up on something you said earlier about tariffs and to be cautious about the understanding of tariffs.
But we see it commonly referred to that the tariffs have generated tremendously beneficial revenues for our government.
And now they have to spend them.
They have these stimulus programs that they have to distribute this wealth.
Well, how is it that our government's getting any tariffs?
I thought if we put a tariff on China, that was that China would have to pay.
That would make us a little more equal and competitive with them if we utilize them.
But that's not what happens.
If we put tariffs on any country, it's not 100%.
But for the most part, we collect the tariff money.
So in order for somebody to bring it across our borders, you have to pay the tariff.
And you pay so much, whether it's on automobiles or what, it's a tax on the people.
And it's not been fully calculated yet.
And, you know, sometimes the people hurry up and buy things.
Like right now, it's been known that electric cars, because they're removing the benefit and the benefits and the subsidy for buying an electric car, they're doing this.
And more people bought those cars in the last month or so.
But does that mean they're going to do that?
No, it'll probably go up this month and die next month.
So the message just then, it takes a while.
It takes a lot of people, you know, responding to what the government has done.
And the more they get information, the more likely there is they'll move it in the right direction.
But the tariff, the founders endorsed tariffs, but it was supposed to be very, very limited.
It was nothing like the weaponry that's used currently and the way we can dictate to others.
But we are still king of the hill.
There's no doubt.
We're the wealthiest.
We have the strong currency still, which is getting weaker and weaker, and our budget is totally out of control.
So we have to anticipate the future and decide why this has happened.
Now, you know, over the years, I did look at a little bit of economic policy when I was at college, which was mediocre.
But the things that I learned as I came across Austrian economics and started reading this, I said, this is taking a job.
I have to unlearn the little bit I did learn about economic policy coming from our universities.
But I don't think there's many people in our universities that are unlearning the nonsense they themselves are preaching because we still have a lot.
But even there, I see inroads.
I see there are some private colleges and even the worst kind of state schools.
There's always one or two or three that's sympathetic to a more free market attitude.
So we have to contend with that.
But I think the most important thing is getting information out.
Government's Role in Information Flow00:00:52
That's why I place very highly on the First Amendment.
So once they crack down, and that's very confusing because it's very big and complicated, and AI is another thing.
And how that's going to work out, I don't know how it's going to work out, but I predict there's a lot of other people who think they know how it's going to work.
They don't know everything about it either.
But this is something that we need, that we need freedom of information, spreading information on all ideas, whether it's economic policy, foreign policy, or whatever.
The government is not supposed to be there to tell us how to live.
It's there to let us live our own lives and develop a system of understanding what self-sovereignty means.
I want to thank everybody for tuning in today to the Liberty Report.