Jeff Berwick, the Dollar Vigilante, joins Stefan Molyneux, host of Freedomain Radio, for a rousing discussion of the recent deficit reduction "solution" put forward by Congress, plus the worst comic book Hero ever, the Super Congress!
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| Hi, everybody. It's Stefan Molyneux from Freedomain Radio. | |
| I have Jeff Berwick on the line, author of The Dollar Vigilante. | |
| How's it going, Jeff? It's going excellent, Stefan. | |
| How are you? I'm very well. | |
| So, we have what is being touted as a debt solution, as an end to fiscal indiscipline and an avoidance of a downgrade in the debt or a default. | |
| What are your thoughts on this slate of hand? | |
| It's exactly what you said, sleight of hand. | |
| There's nothing real about this at all. | |
| Everything that they've been saying is complete hocus-pocus or smoke and mirrors. | |
| Even from the thought that this would have actually caused a debt default, that was a complete lie because the total amount that they actually owe for interest, because interest rates are so low, It's not that much, so they could easily have paid interest for a long period of time. | |
| So that was just a... | |
| Everything they've been saying is just propaganda. | |
| It's a typical U.S. government propaganda machine. | |
| There was no chance of a debt default, and they Basically everything they've been doing has just been one big show. | |
| They've just been trying to make it appear as though they actually care about all this stuff. | |
| But the deal that they've actually come to is just typical. | |
| It actually means nothing. | |
| There's no cuts at all for this coming year and there's just some small cuts in 2013 and 2014 because as always they say, well, You know, the economy's too weak right now to cut, but they have no idea. | |
| This economy's going to get much, much worse. | |
| So in actual fact, they'll never end up doing any cuts at all. | |
| Even, you know, as usual, as politicians, they put it off for ten years into the future. | |
| The actual, anything that even looks like a real cut doesn't happen for five or ten years after all of these guys. | |
| They're all long gone on their pensions. | |
| And taken all the money they stole, and they're all gone. | |
| So this was a complete sham thing. | |
| There was nothing real about it. | |
| And if anyone thinks that anything was resolved here at all, there was absolutely nothing resolved. | |
| It was the exact same two weeks ago as it is today, as it will be two weeks from now. | |
| There was nothing changed with this so-called deal. | |
| Well, of course, what's changed and what's dangerous is the perception that something has been done. | |
| Always a risky thing. | |
| The only thing worse than a disaster is the illusion that the disaster has been solved. | |
| So, yeah, because let's look at some of the facts. | |
| I mean, under these supposed draconian cuts, federal spending is going to rise. | |
| And so is the federal debt, not by a little, but a lot. | |
| So John Boner's blueprint looks at savings of $3 trillion over 10 years. | |
| Now, anyone with any math past grade three knows that that's ridiculous. | |
| $3 trillion. Over 10 years, when you're looking at a multi-trillion dollar deficit, let alone debt, is crazy. | |
| And the biggest chunk of savings comes from a cap on discretionary outlays, letting them grow only as fast as inflation. | |
| So when the government slows down the growth of its spending, it causes that massive savings. | |
| And of course, there's no identification of any specific program that is going to be cut. | |
| These are just magic fairy dust savings. | |
| It's like they're going to put a vacuum cleaner in the air and hope that they're going to clean the couch. | |
| Because, of course, nobody wants to reveal to any constituent where they might be yanking the pig's nose back from the trough. | |
| So it's completely mad. | |
| I mean, there's no... | |
| They say you're going to try and trim $111 billion next year, which means nothing. | |
| Nothing's itemized. It's just a number. | |
| We're going to try and cut $111 billion. | |
| Well, what are you actually going to cut? Well, we're not going to talk about that. | |
| And this balance, this constitutional amendment to balance spending, if that... | |
| Would it even pass, which would be, I think, not possible at all. | |
| All it does is commit Congress and the President to approve cuts in spending or increases in revenue that eliminates the fiscal gap. | |
| It doesn't require them to actually manage their finances. | |
| It just requires them to make up numbers to pretend to manage their finances. | |
| So it's dangerous not for the, I think, investors and people in the know who are going to get it, but it's dangerous for the people in the street who think that some sort of solution has been arrived at. | |
| Yeah, exactly. And as you said, everything in this deal is hilarious. | |
| If anyone actually even looks into it, it's almost like they're laughing at people for even believing any of this stuff. | |
| Some of their so-called savings, one of the savings, they actually said they saved hundreds of billions of dollars just by doing this deal because they say in the future interest rates will be lower because of all these cuts that they said they made. | |
| So that was a big part of the cuts, was that they said they're going to make cuts. | |
| It just goes on and on like this. | |
| I did an analogy on our website on dollarvigilante.com. | |
| We have a free blog if anyone wants to sign up on our front page there. | |
| An analogy where Uncle Sam was just an alcoholic and he went to the doctor. | |
| And basically the doctor would have said, listen, you've been drinking every single day since 1960 without stop. | |
| And that was the last year that the U.S. government actually had a fiscal surplus. | |
| So they've been actually going more into debt every single year since 1960, which is beyond unbelievable as it is. | |
| And so the doctor says to him, you're going to have to stop. | |
| And Uncle Sam says, well, you know, I think I will start to slow down. | |
| And the doctor says, well, listen, you've been drinking pretty heavily since 1975. | |
| After that, you started to increase. | |
| By 1980s, you were drinking five or six beers a day. | |
| And by the 90s, you were drinking 10 beers a day. | |
| And Uncle Sam, you know, that old Bill Clinton, he had a surplus for two years, hocus-pocus propaganda. | |
| Uncle Sam replied to him, well, you know, in 1999, in 2000, I cut down to only five or six beers a day again. | |
| And the doctor says, yeah, but ever since then, by 2008, you're up to 30 beers per day, and now you're up to 40 beers per day. | |
| So Uncle Sam says to the doctor, well, I'm really going to go cold turkey now. | |
| So what I'm going to do is next year I'm also going to drink 40 beers per day. | |
| And in 2013 I'm going to drink 39.6 beers per day. | |
| 2014, 39.2 beers per day. | |
| And by 2021 I'll only drink 38 beers per day. | |
| And that's exactly what the percentage is that they're saying they're going to cut. | |
| It's 5% total of cuts. | |
| Very far in the future, that all these politicians will be long gone by the time that this comes around. | |
| It will all be long forgotten. | |
| This was complete propaganda, and you're right. | |
| That is the big problem, is that some people think that something was resolved here, and it was the exact opposite of that. | |
| There was nothing resolved. If anything, this just starts to escalate now. | |
| Well, and they could actually balance the budget if they returned federal spending to 2003 levels. | |
| I don't remember there being a tiny government and people starving in the streets in 2003, but that's unthinkable for people. | |
| But what I think is really interesting, Jeff, tell me what you think of this. | |
| There's so many great Meta narratives or larger stories to get out of this whole crisis or process. | |
| The first is that they can come up with a credible deficit reduction plan in six hours. | |
| I mean, that's just completely insane. | |
| It's like trying to come up with a business plan for a multi-trillion dollar corporation in six hours. | |
| Anything you come up with is going to be complete nonsense. | |
| So the idea that this can be solved in a day or two, Is quite mad. | |
| That's ridiculous, of course. The idea of creating a super congress. | |
| Super congress! The worst superhero in the world. | |
| The regular congress is bad enough. | |
| We don't need a super congress. | |
| Yeah, and it's like how many layers are there of government, you know, from the municipal to the federal already between the taxpayer and the treasury. | |
| Is one more layer of government really what we need to solve the problem? | |
| Is the problem is we just don't have enough layers of government and just granting one more layer of government massive powers is going to be solving the problem? | |
| No, it's just a way to sell seats on the super congress to people who are politically connected or who've donated a lot or who have risen and served this way well in the party. | |
| But I think what's really interesting about this is seeing that the growth in government goes entirely unopposed. | |
| And yet any attempt to restrain any kind of spending by the government causes mass hysteria, mostly in the media. | |
| I think the average person on the street would give up a lot to ensure their children aren't sold into debt slavery. | |
| But this should be the big lesson that when you are growing government, you are sailing with the wind. | |
| And any time you try and turn that ship around, everybody screams, oh, we're going to capsize, oh, we're going to eat our prisoners, oh, you know, we're going to have prisoners, it's a disaster. | |
| And that should tell everybody how expansionistic government is. | |
| Even this kind of curtailment, which is almost non-existent and largely illusory, is creating mass hysteria, that should tell people where the government is going to go in the long run. | |
| Yeah. This event really proves that, yet again, there is no political solution to this problem. | |
| This government's been doing these things for decades, and even you could go back even further than centuries, really. | |
| This has been going on. There's no political solution to this, and that's something that a lot of those Tea Party types really should pay attention to. | |
| They elected a lot of their so-called Tea Party people in, and look what happened. | |
| It's the exact same thing. | |
| There's no political solution to this. | |
| And even those who support Ron Paul, unfortunately, even if Ron Paul got in, which is highly unlikely, he'd be taken out, I think, before he even got anywhere near there. | |
| And you can already see the way the media responds to Ron Paul, that they're going to do everything to make sure he doesn't get in. | |
| And like I said, if he does get in, I don't think he'll be around very long. | |
| He'll immediately have some sort of affliction, and he'll be gone, just like JFK and others in the past who have tried to change this system. | |
| So there is no political solution to this, and it's really, I don't know how long people need to see this go on before they come to that realization. | |
| You know, what is the answer? | |
| There is no real great answer, but one of the things is to pull away from the system, to not be involved in it in any way as far as you can do without coming to physical harm. | |
| So definitely don't vote, don't, you know, participate in anything along these lines, and try to even reduce as much the payments you make to the federal government. | |
| Gandhi said one of the surest ways to take down a government is to stop making payments to them. | |
| And that's a pretty good idea. | |
| But of course, you know, if you do that in the U.S., you'll be in Guantanamo Bay pretty quickly nowadays. | |
| So it's really a case of Americans being stuck right now. | |
| We recommend in our newsletter just to get out of there. | |
| And, you know, this is not looking good. | |
| Every day it's looking worse. | |
| And one day this whole debt thing, and it's going to happen quickly. | |
| It's not going to take a decade. | |
| This could happen in the next year or two. | |
| The U.S. government's credit card is going to be taken away, and people have no idea what will happen when that happens. | |
| Basically, the entire world, as the people in the U.S. have known it for the last 30, 50 years was a fallacy and they're going to see reality very quickly and it's a reality without living on debt and without living on inflation and it's going to hurt a lot of people very badly, unfortunately. Yeah, and I think that, I mean, the example that comes to my mind is the fall of the Soviet Union. | |
| I mean, you didn't end up with, it didn't go from sort of communism to fascism. | |
| It went to a sort of vaguely criminal oligarchy where most of the former people in power simply switched over to the remnants of, or generated some aspects of the free market in order to continue preying on the population. | |
| But the dependent classes took a real hit. | |
| There were lots of old people, lots of sick people who saw large cuts, if not permanent cuts and 100% cuts in their payments from the government. | |
| And since 1970, federal government payments to the population, direct payments to the population have gone from 30% to 65% of the budget. | |
| That is, you know, it's more than doubling. | |
| And that means that there's a lot of people who are dependent on the government who are not going to be paid. | |
| At least certainly not. Either going to be paid reduced dollars or they're going to be paid dollars that are reduced through inflation. | |
| So I think there is going to be this sense of... | |
| We need to have sacrifice and the people who are going to be asked to sacrifice or to whom sacrifice is going to be the most inflicted I think are going to be those at the bottom of the pyramid and those who have the least power, the poor, the sick, the old and so on. | |
| That's the great tragedy is that all these programs were set up supposedly to benefit those at the outskirts and the dregs of society and unfortunately in the long run it's going to do them much more harm than good. | |
| Yeah, well, Obama put the shot across the bow for seniors just a few weeks ago when he was saying that they might be on the verge of default. | |
| What was the very first thing he said that he's going to stop payments going out to? | |
| He didn't say he was going to stop payments going to himself. | |
| He wasn't going to cut off his paycheck or Congress or anything like that. | |
| The very first one that he said that was not going to get their checks were Social Security people, seniors. | |
| And that should say a lot to a lot of people. | |
| And really, that's exactly right. | |
| What you just said is that they'll go after all those sort of the weaker people and take theirs away. | |
| They've been taking it away from them for years through inflation, but it will get much, much worse. | |
| And you look at the reaction from seniors. | |
| I read so many stories and they were in shock. | |
| First of all, they were in shock that Well, I thought there was trillions of dollars sitting in the social security fund, and of course that's all a lie. | |
| There's nothing there. There's absolutely nothing. | |
| It's all been long spent and long gone, and there's absolutely nothing sitting there. | |
| And secondly, they're in shock because they assume this would go on for a long period of time for the rest of their lives. | |
| And so many of them wrote in, and it's funny to hear them, well, not funny, it is sad, but I look at the whole thing a little bit. | |
| I try to take some positives, try to enjoy the show a little bit if I can, even though it is tragic to so many people, but all I can do is spread the word, and if people can't protect themselves or listen, it's really... | |
| You know, I have to make a choice between laughing or crying every day. | |
| I don't want to cry every day. So sometimes I do laugh at it, just because of the spectacle of it all. | |
| But of course, on an individual basis, it's terrible. | |
| And yeah, so many of the seniors wrote in or called in. | |
| They were so angry, and they actually wrote in. | |
| I saw so many of the letters, and they'd say, you know, this is what my expense is, and if you stop just one check, and that was what Obama said, we might miss one check, they were already panicking about one check. | |
| Get ready. There's going to be no more checks in the near future. | |
| You might get a check, but it's not going to be worth anything. | |
| You're not going to be able to buy anything with it. | |
| If there's anything you can do now, and that's the one thing that I keep trying to tell people, is get ready now. | |
| Protect yourself in any way. Save, save, save. | |
| Don't spend anything. | |
| Get prepared for a really horrible few years in the U.S. and a lot of the Western world as well, because when the U.S. collapses, it's going to take a lot of people with it. | |
| Yeah, I mean, I have mixed feelings about the people who are dependent upon the government. | |
| It is... | |
| I think, look, so for kids born into welfare ghettos and so on, I have huge sympathy. | |
| I mean, it's not their fault. They didn't invent the system that they've got terrible schools, terrible environment, often a terrible home life. | |
| I feel a lot of sympathy. For the old, though, it's a little tougher. | |
| I mean, they are the richest generation in human history, and they have been very politically involved, which is one of the reasons why politicians defer to them so often. | |
| And... So it's hard for me to say that the older generation is not culpable for what is going to happen to them in the future. | |
| The debt and the deficit and the dusty IOUs left in the locker of the Social Security Fund have been known for decades, and I have not seen the... | |
| The American Association for Retired Persons really lobbying to make sure that the money is there, not at the expense of everyone else. | |
| It seems like they're just kind of kept quiet and they're reaching their hands down into the younger generation's pockets who have much less money in real terms and much fewer opportunities than they did. | |
| And it's just this massive hoovering up the DNA chain intergenerational Ponzi scheme. | |
| It's kind of tough to have a lot of sympathy for the group as a whole. | |
| As you see, for individuals, yes, it's very, very tough. | |
| You know, when I was a kid, I was expected to live with the consequences of my actions. | |
| And if there was a test, I just had to take the test when the test was done. | |
| If I said, well, I never got around to studying, it's like, well, too bad, you get an F. And so the generation that taught me that there are consequences to my actions, I think, might have to look in the mirror at this point. | |
| Yes, that's one of the biggest problems with government is, and I feel the same way about the seniors as a whole in the U.S., is exactly what you said. | |
| They've been involved in the political process. | |
| They should have known what's been going on for decades, and if they didn't, you know, that's at least partly their fault. | |
| But part of the problem with government is that it enables people to do things like steal from their children and grandchildren and not I feel bad about it. | |
| There's not one grandma in the world who would actually go and take money out of her son's bank account every month, or her grandson's bank account, or impoverish her grandchildren. | |
| But when it's done through government, people get confused, and it's all this whole, you know, the government's sending me the check, but people don't see how the whole system is supposed to work. | |
| And basically, they're just taking money from the younger generations. | |
| And exactly as you said, these younger generations, because of all this debt piled on top of them, are going to have way less chance of having a prosperous life than they did. | |
| And there's no way they're going to be able to pay for grandma and grandpa. | |
| Or even mom and dad. | |
| Get ready for mom and dad moving back home with you. | |
| Or you moving in with them but paying for all the payments because they won't have their social security check. | |
| And that's where it's gotten to at this point. | |
| But my whole point is that without the government, and this government has been the biggest plague of humanity for centuries, And if it wasn't for this system, we wouldn't have any of this. | |
| It's just really unfortunate. | |
| So now, as governments are starting to collapse, we're going to go through a really terrible transitionary period. | |
| And hopefully, humanity as a whole starts to wake up and realize that the answer is not in violent, coercive government. | |
| And people realize that there should be 6.5 billion different governments in the world. | |
| Every single person should be their own government. | |
| If we can get anywhere near that, then we'll be able to go to a really prosperous time again, but until we get to that point, it could be an interesting few years ahead. | |
| Yeah, our addiction to the delusions of power, to the grandiosities of nationalism and patriotism, our delusions always lead us to a bad place. | |
| They lead to addiction, they lead to lust for power, they lead to denial, they lead to the subtle predation of taxation. | |
| And like I think all addicts, you're either going to listen to reason or you're going to have to listen to bitter, hard, ugly experience. | |
| And it doesn't seem like there's a lot of people out in the world willing to listen to reason And so where reason doesn't reach people, you know, hard experience does. | |
| And I think this is going to be a very hard experience. | |
| I think that some very hard-won wisdom will come out of this experience, this passage, as long as we remind people that it is not freedom but force that has failed. | |
| And then maybe people will say, okay, well now we know how bad it is to be addicted to this kind of stuff and to ignore the reality of political power for this long. | |
| We'll find a way of avoiding it in the future, but I think this is just going to have to be learned through experience, not No, if it was going to be one through argument, then we'd already be there, because we have all the best arguments against government, and there's no good arguments for government. | |
| Government has destroyed everything. | |
| Genocides are caused by government. | |
| Hundreds of millions, billions of people have probably been killed by government, famines caused by government, millions of people thrown in cages, called jail for no reason. | |
| They've never hurt anyone caused by government. | |
| It's funny when I talk to people who say, oh, you're an anarchist. | |
| That's terrible. It's the exact opposite. | |
| All anarchists really want, real anarchists, not those social communist anarchists, which is a whole different story, but real anarchists just want no government. | |
| And that's just a much better way to go. | |
| But it's exactly as you said, again, people aren't going to switch just by argument. | |
| If that was the case, we'd already have won. | |
| So they're going to have to learn the hard way. | |
| And unfortunately, we're involved in here with them. | |
| Even though we had no interest in this government process, we're going to be fighting along with them for survival in the next few years and trying to get through all this collapse of this artificial system. | |
| Yeah, there's a, you know, the sort of medieval model of the solar system with the Earth at the center and everything revolving around it was simply incorrect as we know now, right? | |
| So you put the Sun at the center of the solar system and then you don't need circles within circles managed by deities in order to have the solar system run. | |
| And so when you get the correct view of the universe, gods and celestial mechanics with ghostly fingertips knocking these things around like billiard balls becomes unnecessary and then false. | |
| In the same way, you move the non-aggression principle to the center of your moral or political or social thinking. | |
| None shall initiate the use of force against others. | |
| And in the same way that moving the Sun to the center of the solar system eliminates the fiction called a deity, moving the non-aggression principle to the center of your thinking eliminates the fiction called the state as a morally justified entity. | |
| It's a hard thing to do. | |
| I mean, I certainly struggled against it for many years and tried to find ways around it. | |
| In the same way, I'm sure, that people invested in the Earth-centered model of the solar system I think? | |
| There's lots of things you have to oppose, and government is just one of them. | |
| So I'm a sort of philosopher who accepts anarchism like a biologist accepts evolution, but I try not to put my stake in the conclusions like anarchism is a conclusion, but rather in the methodology, that the non-initiation of force renders the idea of a state invalid. | |
| Amen, brother. I don't have anything much more to add on top of that. | |
| You're dead on. Well, thanks, Jeff. | |
| Listen, I want to make sure that people can get... | |
| I read your newsletter every day, and I find it very, very inspiring and interesting, and I want to commend you for your writing skills again. | |
| If you could just let people know where to get a hold of your stuff, I'd really appreciate that. | |
| Absolutely. It's just dollarvigilante.com right on the front page, a little yellow box. | |
| Just put your email in there, and you'll hear all my rantings every day in form of writing, and I hope you enjoy it. | |
| Thanks so much, Jeff. It was a really enjoyable chat. | |
| Thank you very much, Stefan. |