1
00:00:00,200 --> 00:00:05,000
Speaker 1: Price controls never work and may end up causing more

2
00:00:05,080 --> 00:00:09,759
harm than good. So her policy if price controls is

3
00:00:09,960 --> 00:00:12,400
not going to work. On the other hand, what would

4
00:00:12,439 --> 00:00:15,679
President Trump do well, He said, look at the consumer

5
00:00:15,759 --> 00:00:19,280
price Index. About thirty percent of it in the aggregate

6
00:00:19,320 --> 00:00:22,920
in total is made up of energy prices. Not just

7
00:00:23,000 --> 00:00:26,160
that we buy gasoline and heating oil, but business has

8
00:00:26,199 --> 00:00:29,280
to buy energy to produce the products. So when energy

9
00:00:29,280 --> 00:00:33,359
cars go costs more to produce products. So President Trump said,

10
00:00:33,560 --> 00:00:37,840
there's no reason why energy is so high. The reason

11
00:00:37,880 --> 00:00:42,200
it is so expensive is when the Biden administration Biden

12
00:00:42,240 --> 00:00:45,079
and Harris came in in January of twenty twenty one,

13
00:00:45,719 --> 00:00:48,719
they wanted to restrict the use of fossil fuels.

14
00:00:49,039 --> 00:00:52,960
Speaker 2: You're listening to Carrie Let's's Financial Survival Network, where you

15
00:00:53,000 --> 00:00:56,960
get valuable information you just can't find anywhere else to

16
00:00:57,119 --> 00:01:00,479
thrive in today's trying times. You need the fin Financial

17
00:01:00,560 --> 00:01:05,640
Survival Network now more than ever. Go to Financial Survivalnetwork

18
00:01:05,680 --> 00:01:09,400
dot com and get your free newsletter and gift. Financial

19
00:01:09,519 --> 00:01:13,200
Survival Network now more than ever.

20
00:01:16,439 --> 00:01:17,159
Speaker 4: And welcome.

21
00:01:17,599 --> 00:01:21,760
Speaker 3: You are listening to and watching the Financial Survival Network.

22
00:01:21,799 --> 00:01:24,239
I'm your host Carry Let's Hey, We're almost at the

23
00:01:24,319 --> 00:01:26,159
end of August, we've got an.

24
00:01:26,079 --> 00:01:27,079
Speaker 4: Election going on.

25
00:01:27,400 --> 00:01:30,400
Speaker 3: We don't really talk much about elections because this is

26
00:01:30,480 --> 00:01:36,120
a family show and you know, the current political situation

27
00:01:36,359 --> 00:01:40,239
is obscene. But we do talk about economics, and there's

28
00:01:40,239 --> 00:01:44,200
a couple of policies. There's Kamaloomics and there's trump Anomics.

29
00:01:44,640 --> 00:01:46,920
We've already had a taste of both of them. I

30
00:01:46,920 --> 00:01:50,480
don't know which one you prefer, but we do know

31
00:01:50,680 --> 00:01:54,840
which one, Professor Bustler, Michael Butler, you prefer.

32
00:01:55,000 --> 00:01:56,560
Speaker 4: So tell us here, are.

33
00:01:56,439 --> 00:02:00,560
Speaker 3: There two distinct economic policies or is one just mimicking

34
00:02:00,599 --> 00:02:00,959
the other?

35
00:02:01,519 --> 00:02:03,400
Speaker 4: And why should we care?

36
00:02:03,640 --> 00:02:05,840
Speaker 1: So there are thanks for having me on your show, Carriage.

37
00:02:05,879 --> 00:02:10,919
So there are two distinct, distinctly different economic policies. So

38
00:02:11,240 --> 00:02:14,000
before we look at it, what is the goal of

39
00:02:14,039 --> 00:02:18,360
economic policy? That includes both monetary and fiscal policy. So

40
00:02:18,960 --> 00:02:21,719
what are the goals of economic policy? They should be

41
00:02:22,199 --> 00:02:28,280
to keep prices stable, rice stability, growth, and full employment.

42
00:02:28,479 --> 00:02:34,000
So let's start with price stability. We have had and

43
00:02:34,199 --> 00:02:38,319
almost continue to have a very severe inflation problem. Remember

44
00:02:38,360 --> 00:02:42,000
when at the end of twenty twenty, the last number

45
00:02:42,000 --> 00:02:44,800
we had for inflation, the inflation rate was running at

46
00:02:44,840 --> 00:02:48,919
about one point four percent starting in twenty twenty one.

47
00:02:49,000 --> 00:02:53,360
The inflation rate continued to go up steadily until June

48
00:02:53,400 --> 00:02:56,319
of twenty twenty two, when it peaked out at nine

49
00:02:56,360 --> 00:03:00,199
point one percent, and the Federal Reserve said, look, we're

50
00:03:00,240 --> 00:03:02,879
going to have to do something about it. So they

51
00:03:03,319 --> 00:03:06,479
started raising interest rates, and it appears to have brought

52
00:03:06,479 --> 00:03:10,800
the inflation rate down. I think it's still a little

53
00:03:10,919 --> 00:03:14,759
too high, and the Federal Reserve shouldn't cut interest rates.

54
00:03:14,759 --> 00:03:19,080
In September. Most people disagree with me and say that

55
00:03:19,159 --> 00:03:21,719
the inflation rate has come down and it's time to

56
00:03:21,800 --> 00:03:27,439
cut interest rates. So suppose inflation flares up again during

57
00:03:27,479 --> 00:03:34,360
the next administration. Kamala Harris's policy is, well, if corporations

58
00:03:34,400 --> 00:03:37,719
and business is going to continue to raise prices, let's

59
00:03:37,759 --> 00:03:40,240
just pass the law that says it's illegal for you

60
00:03:40,319 --> 00:03:43,680
to raise prices. That way, she says, we'll solve the

61
00:03:44,000 --> 00:03:48,599
inflation problem. That was tried in the US in nineteen

62
00:03:48,680 --> 00:03:53,080
seventy one by Richard Nixon. We had an inflation problem.

63
00:03:53,400 --> 00:03:55,000
He put on price controls.

64
00:03:55,039 --> 00:03:55,639
Speaker 4: He crow.

65
00:03:57,039 --> 00:04:00,000
Speaker 1: For about ninety days, so it was illegal or ready

66
00:04:00,159 --> 00:04:04,120
your price during that period, and then he lifted it

67
00:04:04,360 --> 00:04:08,680
and prices ended up soaring during the ninety days when

68
00:04:08,800 --> 00:04:12,719
the price controls were in effect. You ended up with

69
00:04:13,199 --> 00:04:16,600
what we knew was going to happen. Anytime you set

70
00:04:16,639 --> 00:04:20,680
a market price below the equilibrium, you end up with

71
00:04:20,759 --> 00:04:23,040
the shortage of the product. And for those of us

72
00:04:23,120 --> 00:04:26,079
that are old enough to remember, there were lines to

73
00:04:26,120 --> 00:04:29,600
get gasoline. Depending on our last number on your license plate,

74
00:04:29,720 --> 00:04:34,000
told you what day could buy Yes, Selene. So price

75
00:04:34,079 --> 00:04:38,920
controls never work and may end up causing more harm

76
00:04:39,439 --> 00:04:43,560
than good. So her policy of price controls is not

77
00:04:43,720 --> 00:04:46,279
going to work. On the other hand, what would President

78
00:04:46,399 --> 00:04:50,160
Trump do well, He said, look at the consumer price index.

79
00:04:50,600 --> 00:04:53,480
About thirty percent of it in the aggregate in total

80
00:04:54,319 --> 00:04:56,879
is made up of energy prices. Not just that we

81
00:04:56,920 --> 00:04:59,959
buy gasoline and heating oil, but business has to buy

82
00:05:00,399 --> 00:05:03,439
energy to produce the products. So when energy cars go on,

83
00:05:03,759 --> 00:05:07,439
costs more to produce products. So President Trump said, there's

84
00:05:07,480 --> 00:05:11,680
no reason why energy is so high. The reason it

85
00:05:11,759 --> 00:05:15,959
is so expensive is when the Biden administration Biden and

86
00:05:16,000 --> 00:05:19,560
Harris came in in January of twenty twenty one, they

87
00:05:19,600 --> 00:05:23,519
wanted to restrict the use of fossil fuels, so they

88
00:05:23,519 --> 00:05:27,800
canceled the Keystone Pipeline, which would have added another nine

89
00:05:27,879 --> 00:05:31,839
hundred thousand barrels of oil a day. They made the

90
00:05:32,000 --> 00:05:37,480
permitting process more difficult for oil companies, and they withdrew

91
00:05:38,000 --> 00:05:42,120
leases to drill on federal lands. Well, that restricted the

92
00:05:42,120 --> 00:05:46,720
supply of oil, and when you restrict the supply of anything,

93
00:05:47,160 --> 00:05:50,879
the price goes up. So President Trump said, look, let's

94
00:05:50,920 --> 00:05:53,000
just reverse all that, go back to what I was

95
00:05:53,120 --> 00:05:56,199
going to do and started to do back in twenty twenty.

96
00:05:56,680 --> 00:05:58,959
So we're going to start drilling more. We're going to

97
00:05:59,079 --> 00:06:03,240
prove the Keystone pipeline will bring energy prices down, and

98
00:06:03,279 --> 00:06:09,839
that should help significantly to control the inflation problem. So

99
00:06:10,560 --> 00:06:13,759
President Trump will look at the causes of inflation rather

100
00:06:13,800 --> 00:06:17,959
than just saying we're not going to allow anyone to

101
00:06:18,040 --> 00:06:22,839
raise prices. And those price controls, as I said, don't work. Now,

102
00:06:22,879 --> 00:06:27,399
how about the next goal, growth and full employment go together.

103
00:06:27,920 --> 00:06:32,360
Kamala Harris hasn't really given what her policies will be

104
00:06:32,639 --> 00:06:38,319
on economic growth, other than to say, look, I know

105
00:06:38,399 --> 00:06:42,519
in some areas in the housing market, but for instance,

106
00:06:42,759 --> 00:06:45,480
we would like to see more houses being built, and

107
00:06:45,519 --> 00:06:48,920
we'd like to see them less expensive so that more

108
00:06:48,959 --> 00:06:52,920
people will be able to afford new homes. To do that,

109
00:06:53,120 --> 00:06:57,160
she's going to give twenty five thousand dollars down payment

110
00:06:57,199 --> 00:07:00,600
as systems to every eligible I'm not sure how she

111
00:07:00,680 --> 00:07:06,160
defines eligible every eligible home buyer. Well, that'll actually make

112
00:07:06,160 --> 00:07:09,680
the problem worse. The reason housing prices are going up

113
00:07:09,720 --> 00:07:13,040
so fast is that just the same reason why any

114
00:07:13,800 --> 00:07:17,639
there's a far greater demand than there is supply. So

115
00:07:17,759 --> 00:07:21,439
she gives people money to help buy houses. That will

116
00:07:21,519 --> 00:07:24,680
increase the demand and make prices go up even further.

117
00:07:25,199 --> 00:07:28,240
She says, if we increase the demand, the supply will

118
00:07:28,319 --> 00:07:31,279
just catch up to that demand. They'll be able to

119
00:07:31,279 --> 00:07:35,600
build three million more houses. That's not likely to happen.

120
00:07:35,959 --> 00:07:38,920
So what does President Trump say? He says, Look, a

121
00:07:39,000 --> 00:07:41,680
major component when you're buying a house is the cost

122
00:07:41,720 --> 00:07:44,560
of land. He says, I really can't do anything about

123
00:07:44,600 --> 00:07:47,040
the costs of materials and labor is what it is.

124
00:07:47,519 --> 00:07:50,839
But the federal government owns a lot of land. If

125
00:07:50,879 --> 00:07:54,920
we release that land to homebuilders at a lower costs,

126
00:07:55,959 --> 00:07:59,600
that will give homebuilders an incentive to start producing more houses.

127
00:08:00,040 --> 00:08:03,360
That will increase the supply of houses and tend to

128
00:08:03,399 --> 00:08:08,040
bring the price down. The other thing that influences economic

129
00:08:08,079 --> 00:08:12,879
growth significantly is tax policy, and there's a vast difference

130
00:08:13,160 --> 00:08:18,519
in what the two candidates are offering. Kamala Harris says

131
00:08:19,319 --> 00:08:22,160
she wants to do a lot more social programs, give

132
00:08:22,639 --> 00:08:29,600
credits to moms for daycare and the down payment assistance.

133
00:08:30,920 --> 00:08:38,399
So her plan is to in order to pay for that,

134
00:08:38,759 --> 00:08:41,639
she's going to have to raise taxes. Now, she says, well,

135
00:08:41,679 --> 00:08:43,799
I don't want to raise taxes on the middle class

136
00:08:43,840 --> 00:08:47,320
because I'm for the middle class and working people. Let's

137
00:08:47,399 --> 00:08:51,320
have the wealthy pay their fair share. Let's finally have

138
00:08:51,399 --> 00:08:53,960
the wealthy pay their fair share. We're going to raise

139
00:08:54,039 --> 00:08:58,000
those taxes. So I looked at the i R S

140
00:08:59,200 --> 00:09:01,519
in twenty two twenty three. They didn't have twenty twenty

141
00:09:01,519 --> 00:09:05,360
four data, but in twenty twenty three, the top one

142
00:09:05,440 --> 00:09:10,519
percent of income earners earned twenty six percent of all income.

143
00:09:10,639 --> 00:09:15,120
That's a lot. They paid forty six percent of all

144
00:09:15,120 --> 00:09:19,559
income taxes paid. The top twenty percent ended up paying

145
00:09:19,960 --> 00:09:23,600
eighty percent of all the taxes paid. I don't know

146
00:09:23,639 --> 00:09:27,279
how she defines fair share, but I would say the

147
00:09:27,320 --> 00:09:30,960
top income earners are paying way more than their fair share.

148
00:09:31,080 --> 00:09:35,919
In fact, the lowest forty seven percent of income earners,

149
00:09:36,000 --> 00:09:39,480
nearly half don't pay any federal tax at all. Now

150
00:09:39,559 --> 00:09:42,200
they say, well, they pay social Security and Medicare, and

151
00:09:42,240 --> 00:09:45,360
that's true, but the people that pay the high income

152
00:09:45,440 --> 00:09:50,960
taxes also pay Social Security and Medicare. Raising taxes will

153
00:09:51,000 --> 00:09:55,000
stagnate the economy. She wants to raise the corporate tax

154
00:09:55,120 --> 00:09:57,799
rate from twenty one up to twenty eight percent, in

155
00:09:57,840 --> 00:10:01,200
addition to raising taxes on the wealth feet And the

156
00:10:01,279 --> 00:10:04,240
last thing I heard her say was she wants to

157
00:10:04,440 --> 00:10:08,559
tax unrealized capital gains. So what does that mean? So

158
00:10:08,720 --> 00:10:13,000
if you have an asset, house, or land, or something

159
00:10:13,000 --> 00:10:15,320
that has a certain value, at the end of the year,

160
00:10:15,360 --> 00:10:17,440
the value is gone up. You haven't sold your house

161
00:10:17,519 --> 00:10:19,759
or living it, but the value has gone up. She

162
00:10:19,879 --> 00:10:23,759
wants people to pay taxes on how much the value

163
00:10:24,080 --> 00:10:29,919
has gone up. Also very disastrous. On the third things

164
00:10:30,039 --> 00:10:33,679
she said was in twenty seventeen, whanted to effect the

165
00:10:33,720 --> 00:10:38,799
twenty eighteen resident Trump convinced Congress to have a tax

166
00:10:38,879 --> 00:10:41,879
cut for all Americans. Its essentially what he said was,

167
00:10:42,240 --> 00:10:45,759
I'm going to cut everybody's taxes by ten percent. So

168
00:10:45,799 --> 00:10:49,399
it's nice and fair. Everybody gets a ten percent cut

169
00:10:49,919 --> 00:10:53,360
in order to get it through Congress. They could only

170
00:10:53,399 --> 00:10:57,600
get it approved for a ten year period, so these

171
00:10:57,679 --> 00:11:01,679
will expire at the end of twenty twenty six. Kamala

172
00:11:01,799 --> 00:11:05,159
says she wants to let that expire. That will raise

173
00:11:05,360 --> 00:11:09,120
everybody who pays taxes. That will raise their taxes by

174
00:11:09,600 --> 00:11:13,559
ten percent. That will get people less money to spend

175
00:11:13,879 --> 00:11:17,200
and businesses is less and that will tend to slow

176
00:11:17,279 --> 00:11:21,279
down economic activity. What does President Trump want to do?

177
00:11:21,879 --> 00:11:25,720
Make those Trump tax cuts permanent? To keep everybody's tax

178
00:11:25,799 --> 00:11:30,000
rates down, keep the corporate tax rate at twenty one percent,

179
00:11:30,559 --> 00:11:34,039
and only tax capital gain when it's realized when you've

180
00:11:34,080 --> 00:11:38,039
sold something, you have a capital gain, then tech backs it.

181
00:11:38,440 --> 00:11:42,679
So his policies will keep tax rates much lower. That

182
00:11:42,759 --> 00:11:47,679
will spur economic growth. So it's a vast difference between

183
00:11:47,759 --> 00:11:48,919
what the two candidates.

184
00:11:49,039 --> 00:11:49,200
Speaker 4: One.

185
00:11:49,679 --> 00:11:52,919
Speaker 3: So let's go to this wealth tax, because that is

186
00:11:52,919 --> 00:11:55,759
probably the most disturbing thing. Says, It's only going to

187
00:11:55,759 --> 00:11:58,919
be on people over one hundred million. But look, you know,

188
00:11:59,039 --> 00:12:02,440
we know how this works to trickle down economics. They're

189
00:12:02,480 --> 00:12:05,240
a big proponent of that, especially when it comes to

190
00:12:05,759 --> 00:12:09,720
tax policy. Actually, the only time they're a proponent of

191
00:12:10,080 --> 00:12:12,519
trickle down economics as they call it is when it

192
00:12:12,559 --> 00:12:17,120
comes to taxes, meaning that everybody gets taxed eventually. So

193
00:12:17,600 --> 00:12:20,639
my house right now, you know, maybe went up fifty percent,

194
00:12:20,720 --> 00:12:24,000
but I'm not selling it. So then you know, and

195
00:12:24,039 --> 00:12:27,559
this supplies and just say, hey, somebody's the value of

196
00:12:27,600 --> 00:12:32,080
somebody's shareholdings who's a billionaire went up three hundred million.

197
00:12:32,759 --> 00:12:35,720
All right, they can't spend that money, although I guess

198
00:12:35,799 --> 00:12:38,399
in theory they can borrow on the value of their portfolio,

199
00:12:38,519 --> 00:12:39,399
but that's risky.

200
00:12:39,799 --> 00:12:40,879
Speaker 1: Still haven't earned it.

201
00:12:41,360 --> 00:12:44,519
Speaker 3: Yeah, it's what I would call phantom income because it's

202
00:12:44,519 --> 00:12:47,600
income the government thinks you made, but it's income that

203
00:12:47,759 --> 00:12:49,159
never made it to your pocket.

204
00:12:50,080 --> 00:12:53,879
Speaker 1: What's the wisdom of that? There's very little wisdom. Who

205
00:12:53,960 --> 00:12:57,440
this is really going to copper is farmers because the

206
00:12:57,519 --> 00:13:01,080
value of land is going up considered. But you have

207
00:13:01,159 --> 00:13:04,639
a farm that has been in a family for two, three,

208
00:13:04,799 --> 00:13:08,000
four generations and they don't want to sell it. They

209
00:13:08,000 --> 00:13:11,120
want to continue to farm the land to provide food.

210
00:13:12,000 --> 00:13:16,120
If she starts taxing unrealized capital gain, farmers won't have

211
00:13:16,200 --> 00:13:18,320
money to pay the taxes. What are they going to

212
00:13:18,399 --> 00:13:19,720
have to do? They're going to have to sell off

213
00:13:19,759 --> 00:13:23,279
part of their land. To pay the taxes every year,

214
00:13:23,720 --> 00:13:27,559
and that will reduce the amount of farmland available and

215
00:13:27,639 --> 00:13:31,159
eventually reduce the amount of food being produced. And when

216
00:13:31,159 --> 00:13:34,039
you reduce the supply of anything, the price is going

217
00:13:34,080 --> 00:13:38,879
to skyrocket. So all of her plans, she thinks she's

218
00:13:39,000 --> 00:13:42,679
being good to the middle class, all of her plans

219
00:13:42,720 --> 00:13:45,679
will eventually clabber the middle class. You're going to end

220
00:13:45,759 --> 00:13:48,320
up with a stagnant economy, You're going to end up

221
00:13:48,320 --> 00:13:53,879
with a higher inflation number, and eventually then the unemployment

222
00:13:54,000 --> 00:13:56,360
rate is going to start to go up. And this

223
00:13:56,399 --> 00:13:59,360
is not just some theory. Look at all the countries

224
00:13:59,399 --> 00:14:01,960
that have done stuff like this and you can see

225
00:14:02,039 --> 00:14:04,240
what happens to those countries.

226
00:14:04,759 --> 00:14:08,440
Speaker 3: Hey, and I remember when Nixon imposed the wage in

227
00:14:08,559 --> 00:14:12,480
price controls and everybody thought, oh, this will really be good.

228
00:14:12,919 --> 00:14:17,720
But the fact is it didn't work. Even by his

229
00:14:17,759 --> 00:14:22,240
own admission, it didn't work. And it ignores the cause

230
00:14:22,879 --> 00:14:30,600
of the real cause of inflation, which is excessive government spending,

231
00:14:31,000 --> 00:14:37,519
right and printing money, deficit spending and all of this.

232
00:14:37,960 --> 00:14:39,360
Speaker 4: Now, the one.

233
00:14:39,679 --> 00:14:42,159
Speaker 3: Place where I kind of take a little issue is

234
00:14:42,960 --> 00:14:44,759
during Trump's.

235
00:14:46,039 --> 00:14:47,080
Speaker 4: Tenure in office.

236
00:14:47,679 --> 00:14:51,399
Speaker 3: Obviously we had the pandemic, but that became a money

237
00:14:51,559 --> 00:14:56,519
giveaway free for all that has contributed to the underlying inflation.

238
00:14:57,000 --> 00:14:59,360
Speaker 4: It's not just Biden.

239
00:14:59,440 --> 00:15:04,480
Speaker 3: Harris Trump is responsible to some extent for the inflation,

240
00:15:04,919 --> 00:15:07,840
maybe not the bulk of it, but he was just

241
00:15:07,960 --> 00:15:10,879
lucky he got out what price that we had increasing

242
00:15:10,919 --> 00:15:16,720
at one point four percent, largely because energy consumption plunged

243
00:15:17,200 --> 00:15:21,639
in that sent oil price is skidding. You know, there's

244
00:15:21,960 --> 00:15:27,159
some responsibility here, Michael four Trump's actions.

245
00:15:27,480 --> 00:15:31,679
Speaker 1: Okay, so why do we have this inflation? The real

246
00:15:31,720 --> 00:15:35,879
reasons we have inflation is the federal government deficit spent.

247
00:15:36,080 --> 00:15:38,919
That has spent more money than they took in nearly

248
00:15:38,960 --> 00:15:43,159
eleven trillion dollars from twenty twenty Trump's last year up

249
00:15:43,200 --> 00:15:45,600
through the end of twenty twenty four. The fiscal year

250
00:15:45,679 --> 00:15:49,879
ends at September eleven trillion dollars more than they brought

251
00:15:49,919 --> 00:15:53,320
in in tax revenue. On an economy of about twenty

252
00:15:53,360 --> 00:15:57,360
five trillion a year, that's going to add to pure inflation.

253
00:15:58,759 --> 00:16:02,559
The other reason we have inflation is that when inflation

254
00:16:02,720 --> 00:16:06,039
started to tick up in early twenty twenty one, the

255
00:16:06,039 --> 00:16:08,919
Federal Reserve said, well, don't worry about it, it's temporary.

256
00:16:09,000 --> 00:16:12,000
We'll use the term transitory. We don't have to do anything,

257
00:16:12,039 --> 00:16:14,840
it'll just go away. So they didn't do anything. They

258
00:16:14,919 --> 00:16:17,799
kept interest rates in your zero, which kept demand high,

259
00:16:17,879 --> 00:16:21,399
and they kept their bond buying program. Finally, in June

260
00:16:21,440 --> 00:16:26,159
of twenty twenty two, the Federal Reserve recognized the economic

261
00:16:26,200 --> 00:16:31,240
goals include price stability and they started to raise interase rates.

262
00:16:31,279 --> 00:16:31,840
Speaker 4: Imagine that.

263
00:16:32,679 --> 00:16:35,559
Speaker 1: Now. One last thing, he said, well, Trump had a

264
00:16:35,559 --> 00:16:38,759
three trillion dollar deficit in twenty twenty and that's really

265
00:16:38,759 --> 00:16:42,480
what started this. So here's the argument to the other

266
00:16:42,519 --> 00:16:47,799
side of that, for whatever reason, the pandemic, etc. They

267
00:16:47,840 --> 00:16:51,960
shut the economy down completely. So output one from whenever

268
00:16:52,000 --> 00:16:55,240
it was almost down to zero. Unemployment went up to

269
00:16:55,320 --> 00:16:59,960
fourteen fifteen percent. Trump said, we need to fix this quick.

270
00:17:00,919 --> 00:17:02,879
So what I want to see is what we call

271
00:17:03,039 --> 00:17:06,839
V shaped recovery. So we dipped very quickly. I want

272
00:17:06,880 --> 00:17:09,359
to see us come back very quickly. How do we

273
00:17:09,440 --> 00:17:13,319
do that. We have consumers and government, and consumers start

274
00:17:13,359 --> 00:17:16,720
spending a lot of money. So he passed a three

275
00:17:16,799 --> 00:17:20,960
trillion dollars stimulus package at work, and the economy came

276
00:17:21,839 --> 00:17:25,759
roaring back. You can argue whether it was necessary or not,

277
00:17:25,920 --> 00:17:29,039
but at least that was his thinking in twenty twenty one,

278
00:17:29,640 --> 00:17:33,519
when Biden took office, they keep saying inherited a terrible economy.

279
00:17:33,599 --> 00:17:37,440
That's not true. When Biden took office, the inflation rate

280
00:17:37,559 --> 00:17:41,440
was one point four percent. The economy was growing at

281
00:17:41,440 --> 00:17:46,119
a six percent annual rate. When Biden decided to pass

282
00:17:46,160 --> 00:17:49,880
the American Rescue Plan, the Inflation Reduction Act, another three

283
00:17:49,960 --> 00:17:53,960
trillion and stimulus, the economy was already growing. That led

284
00:17:54,039 --> 00:17:57,799
to just pure inflation, and then Biden just kept it

285
00:17:57,880 --> 00:18:00,759
up in the next two years. And this year he's

286
00:18:00,759 --> 00:18:03,759
still going to run another two trillion dollar deficit, and

287
00:18:03,759 --> 00:18:07,680
there's absolutely no reason for that. So you're right, the

288
00:18:07,720 --> 00:18:12,759
big deficit spending started with Trump. Obviously I support his policies,

289
00:18:12,839 --> 00:18:16,480
but you could debate whether and argue whether he should

290
00:18:16,519 --> 00:18:20,240
have had the stimulus or not. But after that stimulus,

291
00:18:20,279 --> 00:18:22,920
you didn't need any more at all. So you're right.

292
00:18:22,960 --> 00:18:26,079
Trump is partially to blame. You can justify it by

293
00:18:26,119 --> 00:18:28,880
saying we wanted to get that v shaped recovery. But

294
00:18:28,960 --> 00:18:34,039
you are accurate that Trump's stimulus contributed to the inflation problem.

295
00:18:34,119 --> 00:18:38,279
Speaker 3: Yeah, I mean, and looked like it started it. But

296
00:18:38,960 --> 00:18:43,000
we're also we also live in a world that's governed

297
00:18:43,039 --> 00:18:47,720
by cycles, and we'd have this low inflation rate over

298
00:18:47,720 --> 00:18:53,079
the past three decades, almost four decades, and lower interest

299
00:18:53,160 --> 00:18:57,240
rates all that. Now, you could argue that the inflation

300
00:18:57,400 --> 00:19:00,240
rate was understated during that time. I don't think there's

301
00:19:00,279 --> 00:19:04,440
any question about it. But you know, it was just

302
00:19:04,599 --> 00:19:08,519
natural that that lower interest rates were going to come

303
00:19:08,559 --> 00:19:12,599
to an end. Artificially lower interest rates they helped spur

304
00:19:12,759 --> 00:19:16,799
inflation as well. Right, So a lot of this is

305
00:19:17,039 --> 00:19:20,359
just hey, being in the wrong time at the wrong place.

306
00:19:20,440 --> 00:19:23,680
But that doesn't mean that just because there's a fire there,

307
00:19:24,119 --> 00:19:27,599
instead of taking the firehose and extinguishing it, you take

308
00:19:27,640 --> 00:19:32,559
the gasolene pump and you pulp more feed for the

309
00:19:32,599 --> 00:19:33,279
fire there.

310
00:19:33,599 --> 00:19:39,519
Speaker 1: Right, act exactly if you believe that the economy operates

311
00:19:39,519 --> 00:19:42,160
in cycles, which it does, and inflation, would it come

312
00:19:42,200 --> 00:19:45,680
back eventually? Anyway, once it starts to come back, you

313
00:19:45,799 --> 00:19:48,960
take action at that point. You don't wait. The Federal

314
00:19:49,000 --> 00:19:52,079
Asserve waited a year and a half later, the fiscal

315
00:19:52,119 --> 00:19:56,039
policy there's still deficit spending four years, three and a

316
00:19:56,079 --> 00:20:01,480
half years after the inflatation started. So what economists, especially

317
00:20:01,559 --> 00:20:05,119
the Federal Reserve, they're supposed to be ahead of this. Yeah,

318
00:20:05,200 --> 00:20:09,400
there's any side of inflation. Like in twenty eighteen, they

319
00:20:09,480 --> 00:20:12,039
passed these tax cuts, the economy was all set to

320
00:20:12,079 --> 00:20:15,880
take off, no signs of inflation. For some reason, the

321
00:20:15,920 --> 00:20:19,599
Federal Reserve starts pushing up interest rates. They're asked why.

322
00:20:19,759 --> 00:20:22,519
They said, well, inflation could be a problem in the future,

323
00:20:22,519 --> 00:20:25,519
and we want to stead stay ahead of this. Why

324
00:20:25,559 --> 00:20:27,920
they didn't take that view in twenty twenty one. I

325
00:20:27,920 --> 00:20:31,319
don't know the same people there, and they took a

326
00:20:31,480 --> 00:20:32,279
much different view.

327
00:20:33,079 --> 00:20:34,799
Speaker 4: Hey, could not agree with you more.

328
00:20:34,960 --> 00:20:38,720
Speaker 3: You know, I just want a place blame because inflation,

329
00:20:39,039 --> 00:20:41,720
deficit spending, that isn't one.

330
00:20:41,519 --> 00:20:42,400
Speaker 4: Party or the other.

331
00:20:42,920 --> 00:20:47,880
Speaker 3: There have been partners in it, absolutely, back to World

332
00:20:47,880 --> 00:20:52,839
War two, arguably before World you know, the Great Depression,

333
00:20:53,359 --> 00:20:57,799
all of this, and you know, it's kind of like

334
00:20:57,960 --> 00:21:00,039
when you got a candy bar and you take.

335
00:20:59,880 --> 00:21:01,359
Speaker 4: That first bite.

336
00:21:01,400 --> 00:21:04,559
Speaker 3: It's delicious, and then you like dobble the whole thing

337
00:21:04,640 --> 00:21:07,160
down and you feel sick afterwards.

338
00:21:07,880 --> 00:21:10,319
Speaker 1: So, as a result of everything you said, we now

339
00:21:10,359 --> 00:21:14,480
have a thirty five trillion dollars public debt. That's the

340
00:21:14,519 --> 00:21:17,440
total of all deficits over time. Where did all this

341
00:21:17,559 --> 00:21:21,000
problems start? It actually started other's deficits in the path.

342
00:21:21,039 --> 00:21:24,279
But really in the early sixties, what happened then John

343
00:21:24,319 --> 00:21:28,400
Kennedy was president. Women decided, look, we don't have to

344
00:21:28,400 --> 00:21:30,279
stay at home. We can enter the workforce too if

345
00:21:30,279 --> 00:21:34,440
we want. So women started entering the workforce. The unemployment

346
00:21:34,480 --> 00:21:37,119
rate started to go up. So Kenny said, look, how

347
00:21:37,119 --> 00:21:40,240
do I stimulate the economy? And as economists there were

348
00:21:40,319 --> 00:21:44,480
Chinesy economists, they said, look, just spend more money. And

349
00:21:44,960 --> 00:21:47,039
Kenny said, well, look we don't have any more money.

350
00:21:47,039 --> 00:21:49,240
I don't want to raise taxes. And they told them

351
00:21:49,319 --> 00:21:53,039
it's okay to run a deficit. Why look, we owe

352
00:21:53,039 --> 00:21:56,000
the money to ourselves and we can always raise taxes

353
00:21:56,039 --> 00:21:58,640
they get rid of a deficit. So they convinced Kennedy

354
00:21:58,720 --> 00:22:03,240
that deficit spending was okay. Since that time, nineteen sixty

355
00:22:03,279 --> 00:22:07,759
two to twenty twenty four, what is that sixty sixty

356
00:22:07,799 --> 00:22:11,759
two years. We only balance the budget four years out

357
00:22:11,799 --> 00:22:15,279
of those sixty two years, and the deficits in the

358
00:22:15,359 --> 00:22:19,440
last decade have gotten much much larger. We're going to

359
00:22:19,519 --> 00:22:24,400
have to confront this public debt problem sooner rather than later.

360
00:22:24,640 --> 00:22:27,720
What happened over the years is every president they said, well,

361
00:22:27,759 --> 00:22:30,119
the deficits run end. Let's try to keep go go.

362
00:22:30,440 --> 00:22:32,759
We'll kick the can down the road. Let the next

363
00:22:32,759 --> 00:22:35,799
president worry about it. Next president gets in says, Okay,

364
00:22:35,839 --> 00:22:37,880
we have a definite problem. I don't want to raise TAXID,

365
00:22:37,920 --> 00:22:39,519
don't want to cuts back, and we'll make the next

366
00:22:39,519 --> 00:22:42,119
guy worry about it. They kept kicking the can down

367
00:22:42,160 --> 00:22:44,079
the road. The point is we're at the end of

368
00:22:44,079 --> 00:22:46,920
the road. There is no more road. We have to

369
00:22:46,960 --> 00:22:49,839
deal with this problem as soon as possible. It takes

370
00:22:49,880 --> 00:22:54,559
a lot of political courage to do that. I'm hoping.

371
00:22:55,559 --> 00:22:59,079
I believe Trump's I hope President Trump windsy election and

372
00:22:59,119 --> 00:23:01,759
at some point he's going to have to confront that problem.

373
00:23:02,400 --> 00:23:08,160
Speaker 4: Well, you know one thing for sure. You know the.

374
00:23:09,680 --> 00:23:16,279
Speaker 3: Opposition here can't even spell inflation, let alone wanting to

375
00:23:16,319 --> 00:23:17,279
do something.

376
00:23:16,960 --> 00:23:19,960
Speaker 4: About it here, right, Yeah, yeah, they don't really.

377
00:23:21,039 --> 00:23:28,240
Speaker 1: The current administration is not really interested in reducing government spending.

378
00:23:28,240 --> 00:23:33,599
In fact, under Biden, government spending has skyrocketed. I think

379
00:23:33,640 --> 00:23:37,799
his next proposed budget for twenty twenty five was I

380
00:23:37,799 --> 00:23:40,839
think six point five trillion. When he got in in

381
00:23:41,400 --> 00:23:43,559
twenty twenty one, I think the budget was about four

382
00:23:43,599 --> 00:23:48,279
point eight trillion, So he ended up massively increasing government

383
00:23:48,319 --> 00:23:51,839
spending and that led to larger deficits. He's going to

384
00:23:51,920 --> 00:23:55,359
end up his four years having about seven point eight

385
00:23:55,440 --> 00:24:00,000
trillion dollars in debt, he added. He says Trump added more.

386
00:24:00,400 --> 00:24:05,960
That's not accurate. Trump added about five point six trillion dollars.

387
00:24:06,279 --> 00:24:08,920
The point is somebody's going to have to face this

388
00:24:09,400 --> 00:24:11,119
and do what we have to do to get the

389
00:24:12,240 --> 00:24:14,880
deficit down. And it's a very difficult thing to do.

390
00:24:15,240 --> 00:24:18,440
Speaker 3: Well, it's actually pretty easy because in the age of

391
00:24:18,599 --> 00:24:23,720
AI and chat GPT, I asked chat GPT to analyze

392
00:24:23,799 --> 00:24:29,039
the twenty twenty five federal budget and come up with

393
00:24:29,160 --> 00:24:32,480
two to three trillion dollars worth of cuts and.

394
00:24:34,119 --> 00:24:36,039
Speaker 4: To not raise taxes because.

395
00:24:35,759 --> 00:24:38,079
Speaker 3: The first time I said I want to balance the budget,

396
00:24:38,720 --> 00:24:42,720
something got into this chat GPT because it just wanted

397
00:24:42,759 --> 00:24:48,039
to raise taxes. And here we cut corporate welfare by

398
00:24:48,119 --> 00:24:53,519
six hundred billion, all right, We cut defense spending by

399
00:24:53,559 --> 00:24:58,880
about eight hundred billion, and still have plenty leftover. Healthcare

400
00:24:58,960 --> 00:25:05,240
spending seven hundred billion, discretionary of federal spending seven hundred billion,

401
00:25:05,880 --> 00:25:10,079
and social security and medicarey for four hundred billion. And

402
00:25:10,160 --> 00:25:13,039
I saved three point two trillion and I didn't even

403
00:25:13,039 --> 00:25:14,000
break a sweave here.

404
00:25:14,079 --> 00:25:14,440
Speaker 4: Michael.

405
00:25:14,799 --> 00:25:17,559
Speaker 1: Yeah, I'll tell you all those things you mentioned carry

406
00:25:17,559 --> 00:25:20,119
are going to be very difficult. It says, let's cut

407
00:25:20,119 --> 00:25:23,400
the military budget. You know, we're in the middle of

408
00:25:23,440 --> 00:25:29,119
a few wars here, and cutting the military that's going

409
00:25:29,160 --> 00:25:31,519
to be that's going to be difficult too. So I

410
00:25:31,720 --> 00:25:36,039
can do it healthcare spending politically, I don't know how

411
00:25:36,039 --> 00:25:39,079
you're going to do that. Yeah, so that's well, it's

412
00:25:39,079 --> 00:25:41,160
going to be very very difficult. So I think up

413
00:25:41,200 --> 00:25:43,720
with some numbers, but actually doing it politically it will

414
00:25:43,720 --> 00:25:47,440
be very difficult. What I think is if they just

415
00:25:47,960 --> 00:25:51,200
hold the line on spending for the next few years,

416
00:25:51,640 --> 00:25:55,240
let the economy grow and tax revenue come up, Eventually

417
00:25:55,279 --> 00:25:59,640
you'll come very close to balancing the budget. You're going

418
00:25:59,680 --> 00:26:03,319
to have to cut some things out, but still you

419
00:26:03,440 --> 00:26:05,400
need to do that because we have to face this

420
00:26:05,799 --> 00:26:09,279
deficit and debt problem sooner rather than later. Look, the

421
00:26:09,319 --> 00:26:12,839
interest on the public debt this year twenty twenty four

422
00:26:13,160 --> 00:26:16,519
was six hundred and sixty billion dollars at the rate

423
00:26:16,559 --> 00:26:21,039
we're going and the fact that when the government borrows money,

424
00:26:21,039 --> 00:26:23,799
there's no plan in place to ever pay the money back.

425
00:26:24,240 --> 00:26:27,160
We're in place to ever pay it back. They sell

426
00:26:27,160 --> 00:26:30,200
a ten or twenty year bond, the bond matures, they

427
00:26:30,200 --> 00:26:32,519
don't have money pay it back. They sell new bonds

428
00:26:32,519 --> 00:26:34,480
and pay off the old bonds or roll over the

429
00:26:34,519 --> 00:26:37,680
public debt. There's a lot of problems with that. One

430
00:26:37,759 --> 00:26:40,480
major is much of this old debt was taken out

431
00:26:40,480 --> 00:26:43,039
a one one and a half percent interest. Today they're

432
00:26:43,079 --> 00:26:45,640
going to be three four percent interest. So you're gonna

433
00:26:45,799 --> 00:26:48,200
double the triple the interest expense even if you don't

434
00:26:48,200 --> 00:26:53,920
take out anymore debt. So we've got to get a

435
00:26:53,960 --> 00:26:57,559
handle on this problem. And the first thing to do

436
00:26:57,720 --> 00:27:02,359
is stop deficits pending and at least news and then

437
00:27:02,400 --> 00:27:04,240
we'll work on getting debt down.

438
00:27:04,640 --> 00:27:05,960
Speaker 4: Okay, I guess we'll leave it at that.

439
00:27:06,119 --> 00:27:10,440
Speaker 3: Hey, we find your work over at newsmas Professor both Newsmax.

440
00:27:10,480 --> 00:27:12,880
Speaker 1: I write a column usually one or two a week

441
00:27:12,920 --> 00:27:16,319
Newsmax Finance. You can you can see me there. I

442
00:27:16,319 --> 00:27:19,799
do have a Facebook page where post all my columns

443
00:27:19,839 --> 00:27:25,599
to search for on Facebook funding democracy, funding democracy.

444
00:27:25,039 --> 00:27:25,880
Speaker 4: Funding democracy.

445
00:27:27,519 --> 00:27:29,319
Speaker 3: The links are in the show notes to this interview

446
00:27:29,400 --> 00:27:33,000
on Financial Survival Network dot com. When you go there,

447
00:27:33,319 --> 00:27:36,960
please sign up for a free newsletter Professor Butler, always

448
00:27:37,160 --> 00:27:38,240
interesting conversation.

449
00:27:38,599 --> 00:27:40,480
Speaker 4: We'll talk to you again real soon, I hope.

450
00:27:40,519 --> 00:27:44,799
Speaker 2: So thanks for listening to carry Letz's Financial Survival Network,

451
00:27:44,960 --> 00:27:48,880
your solution to today's trying times. For the latest, go

452
00:27:49,000 --> 00:27:53,640
to Financial Survivalnetwork dot com. Financial Survival Network

453
00:27:53,960 --> 00:27:55,480
Speaker 1: Now more than ever.