Speaker 1: We have lots of debt because we have too much revenue.
Any entity, whether it's an individual business or a government,
known to be taking in a lot of money and
expected to take in a lot more in the future.
We'll always be able to borrow and will borrow, and
so we have a revenue problem. But people keep calling
it a spending problem or an under taxation problem, and
that's dangerous and it's mistake.
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Speaker 3: And welcome you are listening to and watching the Financial
Survival Network. I'm your host, Carrie Leutz with us Retreat.
One of my first guests, John Tamney, you were with
me when I literally had three people watching the channel.
Two of them were related to me and the third
one was me and you stuck with me for fifteen years.
Speaker 4: Here.
Speaker 3: I can't express my gratitude enough, but what we were
talking about fifteen years ago is true now obviously you
know it as president of Parkview Institute, editor of Real
Clear Markets, and your latest book is The Deficit Delusion,
And that's just one of the many delusions that are
taking place here. The deficit, if I could sum it up,
would be a non issue if the government didn't spend
so much money, right.
Speaker 1: No, I think that presumes that Haites politicians, that they're
just classical liberals, or Russia's politicians are classical liberals. They
just choose not to spend, and that's why they aren't
a debt. No, we have lots of debt because we
have too much revenue. Any entity, whether it's an individual
business or a government known to be taking in a
lot of money and expected to take in a lot
more in the future. We'll always be able to borrow
and will borrow, and so we have a revenue problem.
But people keep calling it a spending problem or an
under taxation problem, and that's dangerous and it's mistake.
Speaker 3: Well, we're spending one thing Doge has shown us. It's
kind of lifted the veil off of the ridiculous things
that the government finds to basically piss our money away
on don't you think yes?
Speaker 1: And thank God, I'm happy for things like DOGE, although
I say in the book that it's not going to work,
and I knew it wouldn't work, because, for one, it's
just hard to get government to give up what's already
being spent on. Ronald Reagan knew that. When he got
into office in the nineteen eighties, he found out that
every program had at least one Republican constituent. So there's
no way to cut anything. But there's the other problem.
Let's say Elon musk hats succeeded and got two trillion
in savings. Smaller government, Oh please, because suddenly Congress has
two trillion in fresh powder, fresh money to start spending
on new programs. And they all start small, but once
they start, they grow and grow. Medicare as I point
out in the book, began as a three billion dollar program.
It's on the verge of being a trillion dollar program,
assuming it's not already. And so I don't want spending cuts. Again,
it's not about spending. We have a revenue problem. Until
we address the fact that we've got too much revenue
now and exponentially more in the future, debt's going to
keep going up.
Speaker 3: And even if they don't have enough revenue, they just
print the difference.
Speaker 1: Right, I would reject that. If we were printing the difference,
if Treasury really had to print to pay off its
debt or to fund government, then we wouldn't have much
debt because who would buy income streams that are being printed.
Let's never forget that, no one, we don't. We don't
earn dollars, and we don't buy dollar income streams. We
buy what dollars can be exchanged for. And so if
Treasury we're printing this, no one would want to earn
Treasury own treasuries in the first place, and there wouldn't
be any debt.
Speaker 3: Well, some of it's being printed. If partial monetization has
to be taking place, it's got to be well, because
seven twenty percent of our debt that's out there now
is interest on prior to debt.
Speaker 4: Right.
Speaker 1: Okay, Well, but see I argue in the book, that's
a good thing. Wait, so you're going to tell me
we're libertarians. You're going to tell me that that is
a growing portion of total federal spending is just paying
off debt. Well, good, What I don't want to hear
is that a growing portion of federal spending is introducing
new programs.
Speaker 4: And so.
Speaker 1: I make a case in the book that, look, social
Security is a bad idea, Medicare is a really bad idea.
Keep them because they're a barrier to bigger government because
they consume more and more of the total budget along
with interest payments. Let those roll and that gives us
time to maybe actually have a real discussion about the debt.
That it's a problem of too much tax revenue. So
let's actually reduce taxes so substantially so as to not
have a laugher of effect. That's why we have so
much debt. Government revenue keeps going up, but let's actually
bring revenue down so substantially that people don't want to
lend to us in the first place.
Speaker 4: Well, we're on our way.
Speaker 3: What about you know, like Doge, it was successful in
certain aspects. Maybe it turned into more of a political
weapon than a economic savior. But now they're talking about
by January twentieth, eliminating one hundred thousand government regulations that
are obsolete, illegal, conflicting, or make no sense whatsoever. And
they've got the tools in place to do it. What
do you think will happen if we get to January
twentieth of twenty twenty six and they actually get rid
of all those rigs.
Speaker 1: John, I'll take it. I like it a regulations attacks
like anything else. The regulations. You're quite literally asking people
who could not get jobs in certain industries to oversee
those who could and basically tell them what to do.
What an awful idea. Get rid of them every which
way you can, and so thumbs up. I know you're right. Look,
not all of Doge was bad. Anything that shines a
light on what government does is I think a very
good thing. I just but when I'm so tired, and
I quote Musk in the book, I look, I venerate him.
He's a remarkable human being, Thank goodness he lives in
the United States. But it's just so exhausting to hear
about how well we're headed toward bankruptcy and this is
the end, and oh my gosh, no, we're not. If
we were headed toward bankruptcy, we wouldn't have any debt.
The real scandal is the fact that we've got thirty
seven trillion in debt and the markets keep bidding down
the yields on treasuries. What does that tell you? It
tells you that Americans are massively over taxed now and
in the future. Such the thirty having trillion is a yawn.
Of course, we can pay it off. It's nothing to us,
and it's nothing relative to where we're headed in terms
of revenue collection.
Speaker 4: Yeah.
Speaker 3: Well, one of the interesting things that people, the many
of you out there, failed to connect is that the
income tax and the Federal Reserve almost implemented simultaneously.
Speaker 4: Right, you can't have without the other.
Speaker 1: Yeah, well I don't. Yeah, the income tax was a disaster.
You know me, I have the last time I was
on I think we vastly overstate the impact of the FED.
I just don't think it's that important one way or
the other. This is not me defending the FED, but
I just when people say, well, yeah, look at the
value of the dollars since the FED was opened up,
Well no, Actually it was in nineteen thirty three that
FDR de valued the dollar and FED cheer and Eugene
Meyer was adamantly opposed to it, but had no power
to block FDR, so he resigned and bought The Washington
Post to use it as a vehicle to criticize this
inflationary president. In nineteen seventy one, FED Chairman Arthur Burns
beg Richard Nixon, do not sever the dollars link to gold.
He was once again powerless to control what Nixon did.
You know, presidents get the dollar they want, sadly, and
so I just think this focus on the FED is counterproductive.
Speaker 3: All right, I'm agreeing with you. I think that power
is less and less. But it appears that the world
is heading towards some type of economic crisis pre cal
We're talking about price of gold over four thousand and
ounce today. A price of silver broke fifty, which is
a generational, multi generational high. We haven't seen it go
that high since the Hunt Brothers debacle back in I
guess it was nineteen ninety if memory serves me correct,
a nineteen eighty eighty off by a decade. So it's multiperational.
It's a multi generational high. And silver was the only
the only commodity to not reach a new high in
the past forty five years. So that's a pretty noteworthy,
isn't it.
Speaker 1: It's hugely noteworthy, I'd think.
Speaker 4: So.
Speaker 1: I first came on your show fifteen years ago. If
you had asked me, or and I had asked you,
imagine gold at four thousand and fifteen years of silver
at fifty we'd say, oh my gosh, wow, and what
but to me and so it terrifies me. But to me,
it's not a future crisis. It's a now crisis. But see,
you don't see it. And what I mean by that,
and no one sees it. Imagine people buying up as
they're doing silver and gold, they are buying wealth that
already exists. They are buying two commodities that as the
dollar weekends, they go up, and so it's a natural
hedge against the dollar or any currencies decline. Oh what
a tragedy. We're talking about AI right now and all
the advances with it, and I'm loving every minute of it.
But think how much more advanced we would be right
here and right now if the dollar hadn't been so
persistently devalued all of the twenty first century. What have
we not done? What are we not doing? And so
the crisis is now, and the crisis is now because
people are buying inflation hedges rather than stock and bond
income streams representing the creation of future wealth. And it's
just It really saddens me. But let's not insult what's
really tragic by saying it's something in the future. It's
right now, and people are buying gold. That is a
really bad sign.
Speaker 3: Yeah, it's a loss of confidence in the system.
Speaker 1: Right, it's a loss of confidence in the future. It's
a loss of confidence that in putting wealth to the
David Bonce and the investor, I thought, put it well,
not about gold, but he said, I've never wanted to
buy buildings. I always wanted to buy the people inside
the buildings, and you know, and buying gold is just
buying something that does well when money's not doing well.
Good heavens again, it's not matching talent with capital, which
is the ways of progress. Economic growth is not consumption.
That's what economists think, and that's why the economics profession
is such an embarrassment and such a danger injerious, dangerously
deluded profession. Economic growth is investment, and there's as as
the four thousand gold price indicates, there's less investment than
there otherwise would be.
Speaker 3: Yeah, yeah, and so it takes away from investment. And
the whole system runs on confidence, right.
Speaker 1: It runs on confidence, but it runs let's elevate the speculation.
What does George Gilder call quote bubbles? I hate bubbles.
I think that's an absurdity. But he always says their
growth spasms. There's these big speculative Oh, what's something news
along the way. We're going to direct enormous amounts of
capital to them. Lots of failure will be left in
its way, and that's the good thing. Look at all
we've learned through all this investment. You learned nothing when
you buy gold. You learn nothing when you buy silver.
You just know that, Oh, well, well I've succeeded. Because
the dollar's worth less than it was. What a tragedy.
There's no progress going on here, and so that's the crisis.
Could there be a future crisis whereby government, in response
to its horrid oversight of the dollar, does even dumber things. Yes,
I think that's what happened in two thousand and eight.
I'll go to my grave saying that the crisis was
not financial. It was an effect of George W. Bush
and other Republicans and Ben Bernanke. This is not a
knock on Republicans, but Republicans always want to intervene, intervening
the natural workings of the markets. Of course, they created
a crisis, and so I worry that could happen again.
Speaker 3: Yeah, So if it does happen again, how do you
protect yourself against that type of thing?
Speaker 1: Oh, it's well, it's it's it's a gosh, it's a
great question. I don't know. It's hard to protect yourself.
Sometimes gold goes down in these scenarios. Sometimes a gold
goes up. But yeah, you probably want to have exposure
to wealth that already exists. If there's a quote crisis,
stocks are less attractive because stocks are a look ahead,
and a quote crisis signals that government is intervening in
ways it's basically substituting itself for the marketplace, and so
the future becomes more bleak as a result. And it's
just it's frustrating to see where is Larry Kudlow on this,
Where's Steve Moore? Where are all these Republicans? Why won't
they go to President Trump and say, you have got
a problem on your hands. You want economic growth, but
you want a week dollar, which is inimical to growth,
precisely because it's inimical to investment. Is Scott besn't just
going to keep being Treasury secretary while being utterly oblivious
to the declining dollar. Is this what we've come to
as Republicans? They can be better than.
Speaker 3: This, I would hope, But you know, we've just seen
this like so many times here. And the one thing
we learned from history, John, is we don't learn from history,
right yep.
Speaker 1: So yeah, it's hard to learn from history if we
don't understand history. And let's go travel back in time
to two thousand and eight to this day. The history
is that it was a financial crisis. No, it was
a crisis of intervention. Economies grow and gain strength from weakness,
as in when the bad ideas are allowed to die.
That's the sign of an economy growing because there bad
ideas are being relieved of precious resources. The crisis was
one of intervention. To this day, the vast majority of
people say, well, the economy crashed in twenty twenty because
of the coronavirus. No, the coronavirus didn't cause any business
to die. It didn't close any school, didn't close any
business it did. It didn't eviscerate supply chains. Panicky politicians
did that. And so how can we learn from history
when the historians keep stepping on the punchline and the truth.
Politicians cause crises because they intervene and substitute themselves for
the marketplace. And they and they rooted in well, if
we don't do something, the result is going to be
a crisis. Well that's a self fulfilling prophecy. They are
the crisis. They were in two thousand and eight, they
were in twenty twenty, and so my fear is that
there's going to be another hiccup related to this retile,
relentless rush into wealth that exists gold instead of wealth
that doesn't yet exist, stock and bond income streams, and
the result is going to be government intervening in ways
that really harmless.
Speaker 3: You again, all right, well, your breath of fresh air.
But at least if you get people talking about it,
maybe there's a chance. When we ignore these things then
they come back to bite us.
Speaker 4: And that you know where Well.
Speaker 1: You're right, and so thank goodness that people like you
are doing this, that you've stuck with it for all
this time, three watchers, fifteen years ago, and look at
where you are today. Let's keep having the discussion. Markets
do not cause crises. People do not cause crises simply
because when people fail, they're relieved with their ability to
continue failing. It's just pure logic, which that's not a crisis.
That's better. That's a sign we're improving. Politicians cause crises,
let's shout it from the mountaintop over and over again.
And they're causing a crisis right now. The dollar is
the world's currency, and we have a president who thinks
it's good for economic growth to devalue it, and we
have a Treasury secretary who's going along with this, not
not talking to the markets and saying we don't like
the direction of the week of the week dollar. It's
really sad and it's really frustrating the Republicans close to
President Trump won't make more noise.
Speaker 4: Yeah, and you know, like there's like another thing.
Speaker 3: When interest rates are heading lower, that's a sign of
bad economic activity. You know, in the old days before
the Great Depression, when interest rates went up, that was
bullish because there was demand for money, investment taking place.
Speaker 4: All of this.
Speaker 3: So we kind of need to get back to our basics,
don't we.
Speaker 4: Yeah.
Speaker 1: I mean that's very important too. People always say, well,
higher interest rates are sign of a credit crunt. Really, well,
it's probably a sign that those with title to money
are taking bigger risk with it. The scariest times are
when we're at one percent or zero. That's a sign
that those with access to capital aren't taking any risk,
that they're they're literally directing it to the surest of
sure things as opposed to new ideas. And so, yeah,
everything's upside down right now, and it just it becomes
more upside down when the netwits that the Fed say, well,
we're gonna we're gonna go to the zero because money's
tight right now. Well imagine that. And then these are economists.
These are economists who would say, if you impose rent
controls on mat Manhattan apartments, there will be fewer apartments
for rent. How is capital any different? And yet they
always go to zero and they say, I will see
we're doing our part. Well, no, you're not doing your part.
There's always going to be a price for capital, and
it's never going to be zero, and it's never going
to be one person.
Speaker 4: Yeah. Yeah, and that's the same thing.
Speaker 3: If we raise the minimum way we create more unemployment.
That's been proven time and time again, and yet we
never learned.
Speaker 1: Yeah, you don't mess with prices and politicians mess with prices.
Donald Trump loves messing with prices, and it's just sad.
Speaker 3: Again.
Speaker 1: I think there's a times good instincts from him, but
it just frustrates me that no one close to him
is willing to say, you know what, you don't talk
that way, and you're shrinking yourself. You're shrinking your economic program,
everything about it when you talk that way.
Speaker 4: Yeah.
Speaker 3: So all right, well, hey, tell us again where we
find you, how we connect with you on the web
and find out more about what you're doing and by
your book.
Speaker 1: Yes, yes, well, thank you as always Carrie for having
me on. You can find me at Real Clear Markets
every day. I'm on Twitter every day. I put out
at least one column every day, and of course you
can find all my books on Amazon. Is on everyone
watch and should buy several copies of each and pass
them around and read them and lovingly cress the page.
Speaker 4: Is all that?
Speaker 3: All right, hey, appreciate you coming on as always. I've
written a couple of books as well in the process,
and I've got this book here. The world, according to
Martin Armstrong, talks about a lot of the issues that
you've discussed as well. Appreciate you coming on and if
any questions or comments for John are myself, shoot me
at email kl at Carrie LUTs dot com.
Speaker 4: John, We'll talk to you again real soon.
Speaker 1: Thanks so much, Thank you so much, Cary appreciate it.
Speaker 2: Thanks for listening to Carrie Let's's Financial Survival Network, your
solution to today's trying times. For the latest, go to
Financial Survivalnetwork dot com. Financial Survival Network now more than ever,