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<v Speaker 1>Doctor Van Skin.

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<v Speaker 2>He's an economist and a smart guy, and he's as

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<v Speaker 2>annoyed as I am that once again Congress has completely

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<v Speaker 2>abdicated their responsibility to pass budget bills and have just

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<v Speaker 2>passed another continuing resolution.

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<v Speaker 1>Vance, Welcome to the show. Hi many, it's a pleasure

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<v Speaker 1>with you.

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<v Speaker 3>Thank you for having me on, and I am just

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<v Speaker 3>as upset about the deficit spending as you.

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<v Speaker 2>Now, what is your background? Give my listeners a little

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<v Speaker 2>bit of window of who you are.

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<v Speaker 1>Vance.

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<v Speaker 3>Yeah, so I worked at the Trump White House. I

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<v Speaker 3>was the chief economist for the Office of Management and

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<v Speaker 3>Budget for about a year from June twenty nineteen and

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<v Speaker 3>May of twenty twenty. I've also worked with a lot

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<v Speaker 3>of state think tanks and national think tanks across the

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<v Speaker 3>country and.

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<v Speaker 1>Do a lot of other work.

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<v Speaker 3>I also have a podcast called Let Fuel Prosper where

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<v Speaker 3>I talk a lot about these key important issues about

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<v Speaker 3>fiscal budgeting and monetary policy and a whole bunch of

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<v Speaker 3>other issues.

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<v Speaker 2>So, Vance, if you were part of the Trump administration,

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<v Speaker 2>then I'm gonna ask you a pointed question, because for me,

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<v Speaker 2>that was a big area of disappointment, and COVID threw

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<v Speaker 2>everything into chaos, So we don't know what would have

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<v Speaker 2>happened had his economic policies been allowed to unfold in

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<v Speaker 2>a natural way. So I'm going to concede that point.

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<v Speaker 2>But spending in the Trump administration, even before COVID was

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<v Speaker 2>well beyond what I thought it should have been. Is

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<v Speaker 2>there any hope that in another Trump administration we're going

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<v Speaker 2>to see And I'm not asking to speak for the

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<v Speaker 2>Trump campaign, by the way, I'm not doing that, but

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<v Speaker 2>what are your thoughts about the level of seriousness that

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<v Speaker 2>debt and deficit spending are seen in that administration?

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<v Speaker 3>Well, I also share your concern about how much was

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<v Speaker 3>being spent during the Trump of years. Of course, it

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<v Speaker 3>was Congress that spent passes the budgets, but the president

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<v Speaker 3>could have vetoed them and done more to do that,

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<v Speaker 3>and we were trying to behind the scenes. We were

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<v Speaker 3>trying to push it to have lower spending at the

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<v Speaker 3>end of the day, and you're right, COVID blew that

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<v Speaker 3>out of the water even more with trillions of dollars,

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<v Speaker 3>and then Biden administration came in and put that spending

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<v Speaker 3>on steroids. So we've run up of another twelve trillion

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<v Speaker 3>dollars just so the last four plus years as massive,

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<v Speaker 3>and we're spending at trillion dollars just on that interest

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<v Speaker 3>payments on the debt alone.

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<v Speaker 1>It's just ridiculous.

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<v Speaker 3>And so one of the things that I'm still concerned about, though,

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<v Speaker 3>to your point, Mandy, is that the president hasn't taught

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<v Speaker 3>much about the budget. I mean, during that last presidential

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<v Speaker 3>debate or even the first one, I don't even think

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<v Speaker 3>spending was mentioned at all, or the deficits were mentioned

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<v Speaker 3>it at all. And this is a huge concern for

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<v Speaker 3>me that I talk a lot about and I know

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<v Speaker 3>you do too as well. So this is something we've

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<v Speaker 3>got to get control over. And it's both parties. I mean,

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<v Speaker 3>this is a bipartisan spending crisis, is the way I

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<v Speaker 3>like to put it. That's been happening for decades now,

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<v Speaker 3>and we've got to get under control. There are a few,

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<v Speaker 3>you know, that are out there that will talk a

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<v Speaker 3>good game, and I think are trying to do good things.

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<v Speaker 3>Senter Ran Paul had his six penny plan, which would

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<v Speaker 3>basically cut six percent over the next few years and

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<v Speaker 3>balance the budget, but that was rejected today. At the

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<v Speaker 3>same time, they're spending in the cr bill more and

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<v Speaker 3>more so, it's a massive spending problem.

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<v Speaker 1>Ran Paul.

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<v Speaker 2>I lived in Kentucky for three years and I'm a

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<v Speaker 2>huge and Paul fan, along with Congressman Thomas Massey, who

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<v Speaker 2>has been very vocally opposed to the continuing resolutions that

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<v Speaker 2>we're seeing.

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<v Speaker 1>Why what I mean, We're.

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<v Speaker 2>Just going to have to get to a debt crisis

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<v Speaker 2>situation before anybody in Congress takes so seriously. That's what

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<v Speaker 2>I'm afraid of. And what does that look look like

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<v Speaker 2>for the American people?

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<v Speaker 3>Well, unfortunately, I think we're seeing a lot of that now.

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<v Speaker 3>We saw higher interest rates, right, the interest rates sowar.

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<v Speaker 3>That's a big part of what you see during a

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<v Speaker 3>debt crisis. We saw inflation soar because the Federal Reserve

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<v Speaker 3>printed a lot of that money. I mean their boalance.

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<v Speaker 3>You went from four trillion to nine trillion. It's still

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<v Speaker 3>seven trillion. It's way too high.

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<v Speaker 1>You know.

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<v Speaker 3>The Federal Reserve cut interest rates by fifty basis points

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<v Speaker 3>last week.

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<v Speaker 1>And I think that was a mistake.

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<v Speaker 3>I think we're going to fall into the same traps

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<v Speaker 3>we did during the nineteen seventies whenever they cut interest

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<v Speaker 3>rates too fast and inflation shot up again. And now

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<v Speaker 3>we have even a worse situation because you know, Congress

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<v Speaker 3>is overspending more than they were back then, and so

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<v Speaker 3>this is going to lead more to increases and ammunition

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<v Speaker 3>for the Federal Reserve to print money, increase inflation in

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<v Speaker 3>the economy. And so I'm very concerned about a debt crisis.

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<v Speaker 3>And the spending crisis is happening now. A lot of

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<v Speaker 3>people will blame it on the Trump tax cuts and

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<v Speaker 3>other revenue issues, but it's not a revenue problem. This

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<v Speaker 3>is clearly a spending problem, and I think what we've

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<v Speaker 3>got to do is cut spending today and then restrain

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<v Speaker 3>the growth of spending over time. If we do that,

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<v Speaker 3>we could find a better path forward, not only for

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<v Speaker 3>the spending situation, but for the economy because all this

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<v Speaker 3>deficits and debt really matters also to main street and

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<v Speaker 3>on the economy because interest rates are soaring and people

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<v Speaker 3>can't afford homes and things of that nature. This is

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<v Speaker 3>a major problem that's driven by Washington DC.

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<v Speaker 2>I have the video on the blog today by Milton

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<v Speaker 2>Friedman from like the late seventies, maybe nineteen eighty. I'm

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<v Speaker 2>not sure exactly what the ear is, but he does

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<v Speaker 2>this kind of like walk through on inflation, and it's

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<v Speaker 2>really at a fifth grade level. I mean, that's why

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<v Speaker 2>I put it on the blog. I'm like, if you

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<v Speaker 2>have somebody who doesn't understand this, But what it comes

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<v Speaker 2>down to, what we're seeing right now and we've seen since,

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<v Speaker 2>especially since COVID, is that the Federal Reserve is enabling

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<v Speaker 2>the federal government spending by continuing to print money and

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<v Speaker 2>buying treasury bonds. So they are if the FED doesn't

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<v Speaker 2>keep printing money, then no one's gonna buy those treasury bonds,

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<v Speaker 2>and the federal government cannot continue spending, even though.

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<v Speaker 1>The Federal Reserve is supposed to be.

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<v Speaker 2>A non you know, it's supposed to be a non

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<v Speaker 2>political entity. So people need to understand that we flooded

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<v Speaker 2>the money supply, we flooded the country with money. We

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<v Speaker 2>flooded all the markets with money from the FED, and

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<v Speaker 2>that's why we are now paying the invisible tax that

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<v Speaker 2>is inflation. And too many people do not make that connection.

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<v Speaker 2>And it's super frustrating when I hear people say it's

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<v Speaker 2>corporate greed, it's you know, it's whatever. And Milton Friedman

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<v Speaker 2>actually uses the example of it's not union wages, you know,

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<v Speaker 2>because people will blame it on union wages driving those

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<v Speaker 2>are a lagging indicator instead of leaking and leading indicator.

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<v Speaker 2>So in your in your podcast, what are the kind

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<v Speaker 2>of things that you explain when it comes to because

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<v Speaker 2>my big thing is this, somebody texts me. We have

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<v Speaker 2>a text line and they say things like, you know,

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<v Speaker 2>back in the nineteen fifties, we had the highest tax

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<v Speaker 2>rates on the one percent and we had prosperity. But

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<v Speaker 2>what really happened in the nineteen fifties is the government

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<v Speaker 2>contracted all that spending from World War Two and the

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<v Speaker 2>economy roared. Why is that lesson lost?

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<v Speaker 1>Yeah? Yeah, it's a great point.

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<v Speaker 3>And Milton Freeman is my favorite economist, so I watch

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<v Speaker 3>a lot of his youtubes and I talk a lot

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<v Speaker 3>about these things on my podcast like you will prosper

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<v Speaker 3>show and try to break it down as simply as possible,

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<v Speaker 3>because you're right. I mean, the inflation is an inflation tax.

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<v Speaker 3>We all feel it that the crisis that's out there

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<v Speaker 3>on spending, we're all feeling it through higher interest rates

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<v Speaker 3>today and everything else. And so when people I think

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<v Speaker 3>we've lost sight of how good we have it, in

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<v Speaker 3>some sense, today, and some people want to go back

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<v Speaker 3>to the nineteen fifties or something else. But there's a

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<v Speaker 3>lot of things that I think America gets right today.

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<v Speaker 3>The problem is in Washington, DC, they don't understand that's

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<v Speaker 3>definit spending really matters, and it grows the eyes of government,

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<v Speaker 3>which which removes our liberty. The government has no money,

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<v Speaker 3>nothing is free, and so they take it from us,

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<v Speaker 3>out of the productive private sector, to redistribute it to

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<v Speaker 3>someone else. That's all the government spending is. It's not

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<v Speaker 3>some candy and sort of logic to where the government

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<v Speaker 3>can stimulate the economy and grow in certain areas. No,

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<v Speaker 3>what they do is they take it from person A

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<v Speaker 3>and give it to person B, and there's no growth

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<v Speaker 3>in the economy. In fact, it reduces the economy because

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<v Speaker 3>it reduces the productive purposes that are happening before they

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<v Speaker 3>tried to redistribute that money. So I think, you know,

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<v Speaker 3>Milton Freema is exactly right. Too much money chasing too

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<v Speaker 3>few goods is what inflation is. And what we see

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<v Speaker 3>in the last especially four years, is a lot of

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<v Speaker 3>increasing the money supply driving demand, and then high regulations

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<v Speaker 3>at high tax and high spending that have stifled the

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<v Speaker 3>supply side of the economy and contributed to massive amount

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<v Speaker 3>of inflation. And this is why I think we have

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<v Speaker 3>an issue to where whether it's Harris or Trump, right now,

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<v Speaker 3>there could be more inflationary pressures because neither one of

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<v Speaker 3>them were talking about spending.

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<v Speaker 2>And both of them, you know, I hesitate to call

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<v Speaker 2>them dumb ass ideas, but they've piged out some real

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<v Speaker 2>dumb ass ideas, both of them. I mean, the Trump

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<v Speaker 2>tariff situation is not good for consumers. Harris is trying

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<v Speaker 2>to give away more money, but only the people she chooses,

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<v Speaker 2>and she, I guess, announced another no interest small business

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<v Speaker 2>loan program that if you've never if you've ever dealt

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<v Speaker 2>with government loan programs like the SBA, you already.

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<v Speaker 1>Know how cumbersome they are.

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<v Speaker 2>Neither of these people are blazing a trail on economics.

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<v Speaker 2>So what does what does an average citizen do? What

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<v Speaker 2>do you do if you're worried about this, like I am.

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<v Speaker 3>Yeah, oh man, I've been kind of pulling my hair

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<v Speaker 3>out because you know, one day with Trump will talk about, well,

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<v Speaker 3>we're gonna exempt taxes on Social Security, then we're going

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<v Speaker 3>to exempt taxes on tips and the more that you

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<v Speaker 3>narrow the tax base, the higher that the rates are

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<v Speaker 3>otherwise going to be, or we're going going to run

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<v Speaker 3>massive deficits. Instead, we should have the broadest base possible

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<v Speaker 3>with the lowest rates, and hopefully a flat income tax

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<v Speaker 3>rate is ultimately what we need, and cut government spending

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<v Speaker 3>in the process. But until then, I think, you know,

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<v Speaker 3>there's going to be a lot more economic uncertainty. I've

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<v Speaker 3>been writing a lot about this at American's for Tax

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<v Speaker 3>Reform and American Institute for Economic Research, saying that the

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<v Speaker 3>economic concertainty that's being brought forth by both of these campaigns.

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<v Speaker 1>Even though I do think that the Trump campaign.

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<v Speaker 3>Is having a little bit more pro growth policies of

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<v Speaker 3>course than the Harris administration, they're both leading to more

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<v Speaker 3>economic uncertainty.

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<v Speaker 1>And I'm a free trade guy.

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<v Speaker 3>I debated this a lot with Peter Navarro and others

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<v Speaker 3>within the White House. They didn't see it my way,

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<v Speaker 3>The presidents didn't see.

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<v Speaker 1>It my way.

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<v Speaker 3>But I really think that free trade is the way

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<v Speaker 3>that we will pressure China to change their habits by

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<v Speaker 3>putting tariffs on them and everything else. It doesn't change

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<v Speaker 3>their ways because they're a communist country.

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<v Speaker 1>They don't care about their people.

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<v Speaker 3>But if you start, if you start changing the dynamics

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<v Speaker 3>of other trading partners, now that influences them because that

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<v Speaker 3>reduces their power. And I'm hopeful that would be the

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<v Speaker 3>way we go. But unfortunately we're talking about tariffs all

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<v Speaker 3>the time.

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<v Speaker 1>Well.

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<v Speaker 2>I do think that in some ways Trump has a

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<v Speaker 2>very sort of nineteen fifties view of American manufacturing, right,

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<v Speaker 2>and I genuinely think he believes we can be the

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<v Speaker 2>leader in the world in manufacturing. But the reality is

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<v Speaker 2>is that our standard of living is very high now, right,

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<v Speaker 2>And that's good, that's great that we have a high

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<v Speaker 2>standard of living. So it makes it very difficult, difficult

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<v Speaker 2>to compete with places that don't, like China, like Mexico,

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<v Speaker 2>like developing economies where they can make things much cheaper

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<v Speaker 2>than they can make them here because they pay people

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<v Speaker 2>forty bucks a month.

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<v Speaker 1>So I mean, how is there a way? Though?

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<v Speaker 2>I mean, this is something that I think is something

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<v Speaker 2>that needs to be addressed, and that is, how do

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<v Speaker 2>you ensure that the United States in an emergency situation

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<v Speaker 2>can get things done?

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<v Speaker 1>How do we build new aircraft carriers?

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<v Speaker 2>How do we make steal how do we protect those

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<v Speaker 2>things that protect our ability to defend ourselves.

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<v Speaker 1>This is totally off the beaten track.

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<v Speaker 2>I don't know if I'm asking you stuff outside your

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<v Speaker 2>wheelhouse here.

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<v Speaker 1>No, No, it's fine, it's fine.

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<v Speaker 3>These are all national security type threats, right, and that

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<v Speaker 3>I think are legitimate concerns that should be addressed.

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<v Speaker 1>And one of the things that I like to point out.

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<v Speaker 3>Is that when we point our fingers at someone else

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<v Speaker 3>like China, we've got three more fingers pointing back at ourselves.

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<v Speaker 1>There's more that we should be doing in America.

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<v Speaker 3>To reduce the cost of business instead of just blaming

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<v Speaker 3>other countries, like reducing the corporate income tax rate, which

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<v Speaker 3>Trump has talked about reducing it to fifteen percent. I

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<v Speaker 3>would like for it to be zero percent, because businesses

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<v Speaker 3>don't play pay taxes. People do through the form of

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<v Speaker 3>higher prices, lower wages, and fewer jobs. We also should

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<v Speaker 3>be reducing regulations. There's a lot of hoops that we've

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<v Speaker 3>got to jump jump through in order to get stilled

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<v Speaker 3>to the market. There's a lot of jump hoops that

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<v Speaker 3>we're going to jump through to get food to the market,

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<v Speaker 3>and so much more that if we remove those obstacles,

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<v Speaker 3>we ma to be much more competitive and wouldn't have

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<v Speaker 3>to blame other countries. And one thing I like to

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<v Speaker 3>note too about manufacturing is that where we're reaching manufacturing

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<v Speaker 3>highs and output, it's just that the employment has declined

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<v Speaker 3>over time. And that's not just because of China and

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<v Speaker 3>other countries through trade.

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<v Speaker 1>A lot of it was through.

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<v Speaker 3>Automation, yeah, which has made our lives better along the way.

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<v Speaker 3>Not to say that there wasn't a cost to those

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<v Speaker 3>people losing their jobs, but there were other jobs that

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<v Speaker 3>were created in the process, and we had cheaper products

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<v Speaker 3>that we should you consumers really liked as well. So

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<v Speaker 3>there's a lot of factors that go into this.

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<v Speaker 2>One of the things I think people forget is that trade,

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<v Speaker 2>free trade, it increases the buying power of people on

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<v Speaker 2>the lower ends of the socioeconomic spectrum a lot, not

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<v Speaker 2>a little, a lot.

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<v Speaker 1>So when you're.

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<v Speaker 2>Talking about the sad part, that is people are going

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<v Speaker 2>to lose jobs, right, but there are other people, a

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<v Speaker 2>larger group of people that are going to benefit quite

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<v Speaker 2>a bit by having that ability to buy something that

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<v Speaker 2>they want at a very low price.

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<v Speaker 1>I mean, it.

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<v Speaker 2>Sounds like we're not making progress, but it feel like

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<v Speaker 2>more people are talking about the debt and deficit, but honestly,

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<v Speaker 2>and I hate to say this, vance I don't trust

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<v Speaker 2>Republicans to care about it after the election anymore. I

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<v Speaker 2>feel like all the grown ups in the room have

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<v Speaker 2>left on this issue.

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<v Speaker 1>Am I two pass mystic?

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<v Speaker 3>I don't think so. I'm concerned about it as well.

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<v Speaker 3>You know, I'm hoping hopefully they will see the writing

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<v Speaker 3>on the wall and say, hey, you know what, we've

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<v Speaker 3>got to start doing something different. But we've seen we

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<v Speaker 3>I mean, this problem has been around for a long time.

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<v Speaker 3>We've had we've had Republicans in Congress where they had

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<v Speaker 3>the majority in the House and the Senate and Republican president,

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<v Speaker 3>and the deficit continue to go up or at least

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<v Speaker 3>running a deficit overall.

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<v Speaker 1>And you know, part of.

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<v Speaker 3>It is is that I you know, one of the

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<v Speaker 3>concerns I have with some Republicans is that they'll say, well,

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<v Speaker 3>the tax cuts will pay for themselves over.

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<v Speaker 1>Time, and and there's.

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<v Speaker 3>Some truth to that in the sense that I believe

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<v Speaker 3>in incentives and.

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<v Speaker 1>That people work more and will get more output and

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<v Speaker 1>everything else.

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<v Speaker 3>That's good, But in the short run, there will be

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<v Speaker 3>deficits if you continue to spend like drunken sailors, and

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<v Speaker 3>that's what they end up doing. And this populism is

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<v Speaker 3>really a problem from the new Right to where they

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<v Speaker 3>want to give a lot of handouts and spending and

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<v Speaker 3>tax cuts.

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<v Speaker 1>Some of them even want to raise taxes.

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<v Speaker 3>And the number one thing you don't want to do

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<v Speaker 3>to bring down a deficit is to raise taxes because

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<v Speaker 3>then you slow economic growth. Well, we really need is

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<v Speaker 3>more economic growth, about a full percentage point more than

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<v Speaker 3>what we're having now two and a half percent. Get

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<v Speaker 3>it up to three and a half percent, and let's

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<v Speaker 3>rain in government spending. If you did that and had

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<v Speaker 3>spending growth one percent, we could balance the budget in

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<v Speaker 3>eight years. That's too long in my view. I'd love

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<v Speaker 3>to see the budget cut.

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<v Speaker 1>We didn't have to cut anything, just slow the growth

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<v Speaker 1>and you can have it balanced with eight ears. The

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<v Speaker 1>sad thing is Viance.

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<v Speaker 2>You mentioned Rand Paul's sixpenny plan. It was the one

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<v Speaker 2>penny plan the first time he put it up. If

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<v Speaker 2>they had just passed it, then we would be having

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<v Speaker 2>balanced budgets and we'd be working our way through the

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<v Speaker 2>national debt, and now it's the sixpenny plan.

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<v Speaker 1>Amen.

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<v Speaker 2>Vance skin is my guest. You can find him advance

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<v Speaker 2>skin dot com. I put a link on the blog today.

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<v Speaker 2>He has a newsletter, he has a podcast. If you're

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<v Speaker 2>a free market type, you should check it out. Vince,

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<v Speaker 2>I really appreciate it. Hoping to talk again in the future.

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<v Speaker 1>That was good, Mandy, thank you so much.

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<v Speaker 2>All right, thank you, sir.

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<v Speaker 1>Her