Will Debt Sink The American Empire? - In The Tank #455
Download MP3Alright. We are live, ladies and gentlemen. The National Debt is currently closing in on a staggering $35,000,000,000,000. Even more alarming, the cost of maintaining that debt is, approaching a $1,000,000,000,000 annually, and this is just the interest payment on the debt. Is this sustainable?
Donald Kendal:Also, how long will the dollar remain the king currency when we pursue such reckless monetary and fiscal policy? We're talking about all of this and more on episode 455 of the in the tank podcast. Alright. Welcome to the In The Tank podcast. As always, I'm your host, Donald Kendall.
Donald Kendal:And joining me today, I've got Chris Talgo. He is the editorial director here at the Heartland Institute. Chris, we missed you last week. How are you doing good, sir?
Chris Talgo:Well, I'm doing good. You know, summer's, you know, really hitting its peak. It's prime. You know, Donnie last year was supposed to be my summer, but this year, I'm really making it, you know, summer, Chris. So just like, summer George, you know, I'm gonna be, probably, I don't know, maybe just, working on that big cheese, that big one.
Chris Talgo:What was he what was he working on? A big giant, like, just
Donald Kendal:A wheel of cheese? A wheel of cheese. Yeah. How many how many rounds of golf have you gotten into?
Chris Talgo:Oh, jeez. Dozens.
Donald Kendal:Dozens. Nice. Dozens. Awesome. Also joining us, we have Sam Karnick, publications director here at the Heartland Institute.
Donald Kendal:How are you doing today, good sir?
S.T. Karnick:Just great. Thanks for having me on the show. Fantastic. Fantastic. And for everyone that's where's Jim?
S.T. Karnick:Where's Jim?
Donald Kendal:Jim wasn't on last week. He's not on this week. What's going on? He is on vacation for the past several days. If you are craving the classic Jim Rantz, fret not.
Donald Kendal:He should be back in the saddle again next week, unless I have anything to do with it. But, yeah, you'll you'll likely see him next week, but
Chris Talgo:we gotta do Woah. Woah. Woah. Woah. No.
Chris Talgo:No. No. No. Next week is July 4th. I will be I will be celebrating the independence of this amazing country.
Chris Talgo:I will not be on this podcast. I don't know about you, Donnie.
Donald Kendal:You know what? Sorry. Remains to be seen. I think we still probably will do an episode, but I don't know. We'll see.
Donald Kendal:A special July 4th episode. Alright. But before we get going, audio only listeners, I put this message out there every week that you're probably catching the show on a Friday or later. If you are, leave a review for us on Itunes. That would be greatly appreciated.
Donald Kendal:Oh, and, also, consider joining us a day earlier on Thursdays at noon CST time where we are live streaming this on Facebook and YouTube and Rumble and x. You could join the conversation, throw your comments and questions in the in the chat. Maybe we'll show your comments on the screen. Maybe we'll address your questions on the fly. You could also support the show by just hitting the like button, sharing this content, subscribing if you haven't already, or just leaving a comment under the video.
Donald Kendal:All of those things help break through those big tech algorithms, prevent content like this from being shown to more people. And, also, we are on week 3 of being demonetized, by YouTube for just basically unknown reasons. They won't give you a straight answer even when you, appeal the decision. So we are unmonetized, so you can't help out the show by sending us a super chat, but you can help us out by going to heartland.org/inthetank, and you can support the show that way. And you know what?
Donald Kendal:It's a better way of supporting the show because that way YouTube doesn't take, like, a 30% cut of the super chats. So that money would be directly coming to support this show. So if anyone wants to do that, I encourage you do so.
Chris Talgo:Donnie Donnie, I have to I have to chime in here. I think the reason why we were demonetized is not a question. It's because, you know what? We actually say the truth. And unfortunately, in today's day and age, when you say the truth, bad things happen to
Donald Kendal:you. Mhmm.
Chris Talgo:So just wanna put that out there for everybody.
Donald Kendal:Yeah. The the truth telling the truth is a rebellious act in an empire of lies. Am I right, folks? So, yeah. Support the show heartland.org/inthetank.
Donald Kendal:But, we do have a lot of stuff to get to. This is a very, very interesting show. Just like last week, when I was doing the prep for the show, it it became more interesting to me as I was developing the notes. So, I wanna get I wanna get into it, but I can't get into it without making at least some mention of the fact that tonight is, basically round 1 of the political Super Bowl that is the presidential, upcoming presidential election. Joe Biden will be taking on challenger Donald Trump in a debate featured on CNN.
Donald Kendal:That's that's happening tonight. Right? So I wanna know, Chris, how excited are you for this? No live audience, multiple commercial breaks, the new quiet Trump rule, which, allows them to mute microphones unless CNN allows somebody to speak. So how excited are you, Chris?
Donald Kendal:Are you gonna be getting your popcorn ready? What's up?
Chris Talgo:Dude, I am so excited for this. Okay. In all seriousness, I mean, you know, this the build up to this has been pretty crazy, and here it is finally upon us. You know, the day of, you know, we're hours away from one of the most monumental debates I'll play ever watch in my lifetime. I've been watching, you know, a lot of coverage, pre coverage, you know, different networks, MSNBC, CNN, Fox News, you know, the usual suspects.
Chris Talgo:And, a lot of them, and I agree with them on this, are saying these next the 90 minutes of tonight's debate could be one of the most important 90 minute blocks in this country's history. I I I truly believe so. You know, so, yeah, there's gonna be 2 commercial breaks, which is, you know, kinda kinda weird, but I guess, you know, they need to give Biden some time to, you know, do whatever he does.
Donald Kendal:And inject some caffeine directly into his neck or something like
Chris Talgo:What what whatever whatever they they do for him. But here's an interesting thing that I just learned. So Jake Tapper, he will be one of the cohosts. The other one is gonna be Dana Bash. Did you know that Jake Tapper was once the spokesman for Hooters Restaurants?
Chris Talgo:And he, apparently, he does not like it when you bring that up. So I just wanna make sure all of our audience knows that Jake Tapper was once the spokesman for Hooters Restaurants. I mean, I actually think Hooters has great wings, you know, among other things. But, you know, in in all seriousness, Jake Tapper and Dana Bash are are completely, you know, political animals. They both are unabashed, you know, Trump haters.
Chris Talgo:So I'm gonna be really focusing on how they treat the 2 candidates. The past couple debates, going back to Candy Crowley when she interrupted Mitt Romney and, quote, fact checked him against Barack Obama even though her fact check was completely wrong. That opened up this new activist, you know, activist, like, mantra among these, supposedly neutral, nonbiased debate, hosts. And I have a feeling that tonight is gonna be really bad. I have a feeling that they're gonna frame questions in favor of Joe Biden, and they're going to fact check Donald Trump.
Chris Talgo:And I I should say fact check Donald Trump. And, I mean, I I just I hope it doesn't go off the rails, and I really hope that they they talk about the substantive issues that Americans care about. The economy, immigration, crime, those are the big three. Please do not spend an hour on January 6th or whatever else that they're probably going to spend the vast majority of time on.
Donald Kendal:Oh, no doubt.
Chris Talgo:We don't we don't care about that. The American people don't care about that. The American people care about the future, not the past. So I really hope that this is a good debate. I really hope that, both, you know, Trump and Biden have ample time to speak, and, I really hope that we come away more informed about what they plan to do.
Donald Kendal:Jake Jake Tapper. Right? Am I right? Mhmm. Alright, folks.
Donald Kendal:Boom. Boom. Boom. So I expect to see a very frustrating debate, where Biden is tossed softball questions, where it's just basically giving them opportunities to tee up his preplanned campaign rhetoric explaining why the economy is actually doing great. Don't believe your lying eyes when you go to the gross grocery store or anything like that.
Donald Kendal:It's actually doing great. Whereas Trump surely is gonna be forced to answer for his alleged crimes in January 6th. I I really that that's that's like anything beyond that, would be a surprise to me. But, Sam, what do you think? Chris mentioned that this, this might be the most important 90 minutes.
Donald Kendal:I think other people, maybe more cynically, might think that this isn't gonna move the political needle. People have made up their their minds already. What do you think?
S.T. Karnick:Yeah. I'm going to incline toward the more cynical side and and agree with you on this, Donnie. I think that it's going to turn out to be more like a Babylon b video where the, the the host the moderator is ridiculously biased toward one of the candidates. We'll we'll see which one it is tonight. But the chances are, as as you say, that there's not going to be much substantive discussion of anything.
S.T. Karnick:That, of course, is in great part on on, you can lay that on the actual candidates themselves. They're not very strong on substance either of them, typically in in these kinds of environments. But the problem is that this is a really important election, And this is a there's a lot at stake here, and we'll be getting into that today. If they if they just go up there and and talk about January 6th, as Chris said, and I fully agree with him on this, there's no there's no chance that Donald Trump wants to create an authoritarian government in this country. When you see the Democrats or anybody else on the left say that, the people on the right or the Republicans are doing something awful, There's one thing, you know, the Democrats and the people on the left are doing it and the Republicans are not.
S.T. Karnick:So it's clear that they that they've done everything they can to impose authoritarian rule on this country, the left and the Democrats under Joe Biden. And that is a real thing. How Trump could possibly turn, you know, turn the discussion toward that tonight is difficult to imagine. That's why I think it will end up being a sort of an absurdity.
Donald Kendal:Yeah. You know, I I don't know if I'm gonna go. I generally speaking, when it comes to, like, anything political, I do tend towards the more cynical side. This one, I do think that there is an opportunity for it to be, changing certain people's minds just because, like, ever since January 6th, Donald Trump has been kicked off virtually all social media. You know, CNN obviously never has him on or anything like that.
Donald Kendal:Nobody has him on anymore. Maybe he makes some Fox News appearances or something like that. But I think for, like, a lot of people, this is gonna make the first time seeing Donald Trump, like, in person again, like, since he was president. So as long as he actually, like, puts forward, like, kind of a clear message of, you know, the the economy under Biden is actually terrible, like, you can believe your eyes and inflation. All of this is is, due to reckless fiscal policy, you know, championed by the left and and Joe Biden.
Donald Kendal:And I, on the other hand, am gonna, like, lead us back into prosperity and do all the things that I did while I was president for 4 years times 2 or something like that. I could see people be like, you know what? He's not as crazy as they're making them out to be. But we'll see.
Chris Talgo:Yeah. But, Donnie, here's here here's one thing that I think is definitely gonna happen. What they're gonna do is they're going to pick and manipulate certain things that Donald Trump says can make it seem way worse. So, you know and this has been happening for for a very long time. If you watch the full debates between Mitt Romney and Barack Obama, I think almost anyone would have said, yeah, Mitt Romney just torched him in all those debates.
Chris Talgo:However, what did the, mainstream media do? They they put together little clips to make Mitt Romney look stupid and to make Barack Obama look great, and that's happening even more now with social media and this whole, you know, like, 10 second video, you know, revolution. So I'm pretty sure that what they're gonna do is they're gonna splice and dice all of the the, you know, the the comments that Trump makes to make it look as terrible as they can for him and make Biden look as great as they can for him. I just hope that the vast majority of American people who watch this debate, maybe they're gonna watch it in full. Maybe they'll, you know, watch 60% of it, half whatever, that they're gonna still be able to see through that.
Chris Talgo:Because the mainstream media is gonna do everything they can and the big tech, you know, platforms and such to make Trump look as terrible as possible, to make Biden look as good as possible. Sure. But if the Barrington people just watch the debate in full because it's gonna be simulcast on every single main channel, tonight o'clock at 8 PM EST, that guess what? They will see in real time what, you know, what these two candidates are actually proposing and what, you know, they are capable of doing.
Donald Kendal:Oh, man.
S.T. Karnick:That's a vital element. The the important thing is not so much to win the debate, but to win the debates about the debate. And that's been the case ever since television started, running these debates with with Richard Nixon. He won the debate, among people who listen to it on radio.
Chris Talgo:Yep. Sure.
S.T. Karnick:He lost it according to people who watched it on television. That is clearly not a rational answer on the part of the people who are watching in television. Mhmm. And it's it's always the case now.
Donald Kendal:Yeah. It'll be, it'll be interesting to watch.
Chris Talgo:I'll tell you one other
Donald Kendal:excited to see Trump kind of on that main stage again. So One one other
Chris Talgo:one other quick thing. I was watching a little bit of pre coverage on CNN yesterday, and they are going to be only 8 feet apart. That is a lot closer than they were in 2020 because of the COVID stuff. They were, like, 20, 30 feet apart. So they are gonna be very close to one another.
Chris Talgo:So you
Donald Kendal:think Biden's gonna take a swing at Trump at some point? I just
Chris Talgo:I mean, I I I just I think the fact that they're gonna be so close to one another is gonna make it, I think better better for for us watching to see how they actually interact because you don't have to do the, the the double screen. You can just have one camera right on both of them at all times and see how they're reacting in real time. So I think that should be, you know, pretty interesting. We wanted to do the the the split screen thing.
S.T. Karnick:Yep. Biden's approach in these debates has been to be very feisty and to prove himself as a fighter for the working class blue collar people. If Trump can present himself as a calm person tonight, I think he will he will make huge inroads. That's a big if.
Donald Kendal:Yeah. Yeah. I think, I think all all of these things are kinda big ifs because I don't even know if I know that, like, Biden likes to put on his aviator sunglasses and take on that dark Biden, you know, persona or something like that. But that's like when they have film cameras and perfect lighting, and they could edit it 50 times or something. I don't know if he's gonna be able to put forward that same sort of energy when he's, like, live on stage, maybe in, like, really short bursts or something like that.
Donald Kendal:So I would assume that he's gonna try to take the more regal, you know, like, I'm just professional over here and hope that that Donald Trump is just, like, shouting into a mic that's not on the whole time. I think that's probably their
Chris Talgo:greatest strength. And and the way that it's set up, each candidate is gonna be given 2 minutes uninterrupted to respond. Can you imagine Biden off the cuff for 2 minutes talking about, you know, like, issues? I mean, geez.
Donald Kendal:Gonna get, like, 8 words out.
Chris Talgo:I think I I mean, I think I I think he's gonna struggle mightily, and I think the fact that they are literally turning off the microphones for whoever's not speaking for that entire time. So you cannot hear a word they're saying. They they show what it's gonna be like. It's gonna I think it's actually gonna put Biden, you know, in front of everyone. He's gonna be he's I I think he's gonna have some major problems and stumbles and that people gonna
Donald Kendal:I wanna keep track I wanna keep track of how many times, like, the CNN host interrupts Trump. You know? Because if it's like this idea, you have 2 minutes uninterrupted, we're gonna mute the other person's mic. But that doesn't stop them from interrupting him. You know?
Donald Kendal:I wonder if those 2 minutes, they're gonna be like, nope. That's actually incorrect, sir. You know, like, that that sort of thing. So people will
S.T. Karnick:say all they want, but but people like us and, the the the social media and so forth and and people on Twitter will catch capture all that and and show what the what the bias was. So it's not like it was in 1960 or even in 2016 or 2020.
Donald Kendal:Come on, man. Alright. Let's let's get let's get into our main topic here. I I wanna this is this is kind of the larger implication of all of these things is is based around this. Whether we're talking about specific policies or specific political matchups or anything or even this upcoming presidential election.
Donald Kendal:This is the larger concept, and that is just like the sustainability of the United States and its economy. So I want to base this entire discussion, around, at least using it as a leaping off point. This article from the Wall Street Journal that I have in the show notes that is titled, will debt sink the American empire? So at first, I kind of balked at this topic because it's felt to me for a while that the national debt is kind of a tired topic that really hasn't resonated with the public for probably close to a decade now. During the George Bush administration, I remember this was like a big topic of discussion.
Donald Kendal:The national debt went from $5,000,000,000,000 to $10,000,000,000,000 under the Bush administration. And during his initial run for presidency, Barack Obama referred to the doubling of the national debt under George Bush's unpatriotic. But then when when when Obama got the reins and he served as president for 8 years, we saw the national debt double once again from $10,000,000,000,000 to $20,000,000,000,000. So I don't know what that makes that, if if, the, George Bush, doubling was unpatriotic. The, the pace of the debt accumulation really hasn't slowed down all that much.
Donald Kendal:Currently stands, like I said, around 35 $1,000,000,000,000. However, this is where it starts getting interesting to me again is when it comes to the interest paid on the debt. So like your debt, anyone listening to this podcast, whether it be credit card debt or any other type of financing you might have, car or house or something. You have to pay off the principal, of course, but you also accrue interest on that debt. This is the same same story for the national debt.
Donald Kendal:Generally speaking, as the debt goes up, the cost of servicing that debt goes up. However, additionally, on top of that, the cost of servicing the debt is also dependent on the baseline interest rates that's controlled by the Federal Reserve. So if there's a small interest rate, generally, the cost of servicing that, that debt is smaller than if there's a large interest rate. Right? So back in the George Bush years, the interest payments on the debt was roughly, $300,000,000,000, Pretty staggering amount of money in itself.
Donald Kendal:This equated to about 2 and a half to 3% of the GDP. But in terms of tax revenue, it was closer to 15%. So during the during the, George Bush years, 15% of all the money collected in taxes by the federal government went to servicing the national debt. Like, this is in the mid 2000. Right?
Donald Kendal:Fast forward to the middle of the Obama administration, we'll pick, 2012, as the year for this. Interest payments on the debt was roughly $420,000,000,000. This equated to 2.5% of the GDP or 17 percent of all tax money collected by the federal government. And remember, this is post 2008 crash where the Fed brought interest rates way down. So the cost of servicing that national debt was also decreased, but it still went up to $420,000,000,000 So now let's look at today's numbers.
Donald Kendal:National Debt, $35,000,000,000,000. The interest rates are much higher than they've been basically since the late George Bush years. And today, the cost of servicing the national debt is $1,000,000,000,000. This equates to 3.5% of the GDP or 23%. Basically, a quarter of all taxes collected go to just paying the interest on the debt.
Donald Kendal:So unless I'm mistaken, the this expense is now the single largest expense for the federal government is paying the interest on the national debt. This is larger than national defense. This is larger than what they spend on Social Security, larger than Medicare, whatever. It's the single largest slice of the pie when it comes to federal spending. So, Chris, just baseline before we get into anything else, what are your thoughts on on this whole situation we find ourselves in?
Chris Talgo:Very, very precarious situation we are in. Donnie, you know and you laid out a paper that we just, put out a couple months ago, talking about CPAP minus SACs, how to, rein in this out of control spending. I mean, we are in a very, very dangerous place with, our national debt, surpassing, GDP. I mean, this is this is unprecedented. This is, you know, this is only supposed to happen in times of, like, world wars where you spend tons of money, you know, to fight a war knowing that, hey.
Chris Talgo:Once the war is over, you're gonna drastically reduce that spending. I mean, I I I I cannot believe that we have let it get to this point. Because I remember back in the Barack Obama days when, Paul Ryan was talking about this and saying, guys, we're on the verge of a debt, you know, debt bomb here. Like, you know, we're in really, really, you know, like like, bad bad place right now. We have not done a thing about it.
Chris Talgo:We have added so much more to it. And I'll be fair here. This is a Republican and Democrat thing. This is not just the Democrats overspending when they're in, you know, control of congress. This is Republicans doing the exact same thing.
Donald Kendal:Sure.
Chris Talgo:I mean, this is a this but one of the only bipartisan issues that is alive and well in our nation's capital these days is just runaway spending. And, you know, it's it's just so frustrating that, the American people, we know that this is unsustainable. We know that, people in our generation, Donnie, you and I, are not gonna see all the money that we're pouring into Social Security because what have they done? They have they've taken that that trust fund, that the 1,000,000,000,000 of dollars that were supposed to be stuck there for people like us when we retire, and they have spent it on other things. So we are just we we are so not even close to balancing the budget.
Chris Talgo:And whenever whenever we talk about, you know, cutting spending, it's always at the margins. It's like we're talking like, oh, well, we can cut a couple 1,000,000,000 here and a couple
Donald Kendal:of Oh, yeah.
Chris Talgo:No. No. No. No. We need to cut a couple of 1,000,000,000,000 here, a couple of 1,000,000,000,000 there.
Chris Talgo:We need to do that for years years years. We need to pay down this debt. You know, this this is part of the reason why the American people are struggling so much because our our our our economy is just is is stagnant. Our our our our economy is stagnant. It's it's not growing, you know, robustly.
Chris Talgo:There's so much there's so much unnecessary federal spending that's gumming up what could be a very, very healthy economy, and it's gonna take it's it's gonna take a a lot of courage for a congress to come in and say, wow. Enough is enough. We need to actually do something about this. I guess the only thing that that that we can use as, you know, a a way to be optimistic about this is, hey. Back in the, you know, mid 19 nineties when the Republicans came up with a contract for America, they actually did do this.
Chris Talgo:But that was such a different time period. That was way before their health care spending was going through the roof. That was, you know, back back when our our federal spending was was much more in line with what it should be. That was back when Bill Clinton of all people said, the Arabic government's over. We were cutting welfare.
Chris Talgo:We were cutting all this unnecessary spending.
Donald Kendal:Mhmm.
Chris Talgo:We have just gone so far from that. And it's not just the politicians who are responsible for this. It's the people too. Because the people keep voting for these same people who go in and say, I'm gonna cut spending. They don't do anything.
Chris Talgo:Throw them out. So
Donald Kendal:Yeah. I remember it was like sequestration. Right. What was, like, the sequestration thing over, like, the the government shutdowns? It was, like, 2010, 2011, something like that.
Donald Kendal:And I remember I'll never forget this. Like, Nancy Pelosi, like, after these, like, proposals to not increase spending in any, like, future fiscal year or something, She was like, the the cupboard is bare. Like, there's nothing left to cut. It's just like, if that if that's like your idea of what cutting spending is like, then there's no hope.
Chris Talgo:But that's Just just just to give our viewers a a a a a a very, like, simple, look into how chaotic the federal apparatus has become. The federal government does not even know how many departments it has. Oh, shit. When we were putting together that, that policy study about the national debt and how to, bring it back down, we were focused on spending because, really, it's the spending. It's not it's it's not the revenue.
Chris Talgo:It's the spending. We we we spent months researching this, and the federal government does not even know how many departments it has. Think about that for one second just how insane that is.
Donald Kendal:Right. Right. Yeah. Sam, another way to look at this, in the 19 eighties, the national debt was the equivalent of 31% of the GDP. By 2000, national debt was the equivalent of 54% of the GDP.
Donald Kendal:During Obama's 10 year, it went from 65% of GDP to a 100% of the GDP. And now currently, the national debt represents a 120% of the GDP. So what are your thoughts? How how sustainable is this?
S.T. Karnick:Well, first of all, it's of course, it's not sustainable. But the the point is then what we have to keep in mind is it is entirely 100% a spending problem. It is not a tax problem. It is not that tax rates are too low. Now here's the problem that we have.
S.T. Karnick:No matter what you do in terms of tax rates and how many taxes you put on the American people, you get approximately 17.4 percent of GDP year after year. It goes up and down a little bit, but that's what you get. That's your bottom line. 17.4 percent of GDP is all you can raise. That's all you can squeeze out of the American people now.
S.T. Karnick:So you can say, well, we're going to get more out of those rich people. Doesn't matter. You're going to get 17.4%. You'll get 18 some years and 16 others. But the reason that is, is because when you tax something, you get less of it.
S.T. Karnick:So if you are taxing harder, you are getting less of what you tax. So you're going to get less tax revenue than you expect. Now we are now spending 25% of GDP per year. So what's 25 -17.4? Okay.
S.T. Karnick:That's what almost 9% of GDP difference. That's what we're borrowing because the only way you can get it is to borrow it. So what happens is you create all these pressures throughout the economy by overspending. The problem is strictly overspending. We can solve the problem immediately in 2 ways, which will which would arrive from a single means, which is reduce spending to the 2019 level.
S.T. Karnick:It's it's absolutely 100 percent doable. Reduce spending to that level and your revenues will actually increase to the point that you will actually be paying off your debt within a few years. And that is absolutely necessary if we are going to, prevent some of the catastrophic things that will happen to our economy in the coming years.
Donald Kendal:What level did you say? What year? Reduce it to what year's level?
S.T. Karnick:2019. Before 2020.
Chris Talgo:Yeah. Pre COVID.
Donald Kendal:Isn't isn't that isn't that absurd that, like, what you're proposing there is, like, probably thought of as, like, a radical proposal or something? When, like, 2019 was, like, what, 3 and a half years ago, 4 years ago? Like, you're not like, well, re re revert it back to 19 sixties level of spending or something. Like, we're just talking about, like, 4 or 5 years ago, folks.
S.T. Karnick:I have written, Donnie, that in remember 2019? Remember all the people starving in the streets and the the the dogs eating human corpses and the like? Right. How bad was it? I I remember that that, you know, unemployment for certain ethnic groups and it was the lowest ever.
Donald Kendal:Sure.
S.T. Karnick:And and things were the economy was fantastic in 2019. So we were spending too little. I would I've actually said that I would be willing to even go with an inflation adjusted 20, 90. Sure. Spending spending number.
S.T. Karnick:I don't approve of it, but I could see
Donald Kendal:that. Right.
S.T. Karnick:But the problem is that this overspending is what creates the inflation in the first place. So there are many there are just so many bad things that come out of this overspending.
Chris Talgo:You know, you know, Donnie, it's it's not just the debt that we have now. It's the unfunded liabilities.
Donald Kendal:Oh, sure.
Chris Talgo:If you could bring up the the US debt clock, go to usdebtclock.org. And if you look at the unfunded future liabilities, it is so mind boggling that it is just like like, is there any point to this? And that's what's really, really scary. So if you look at the if you could just key in a little bit on the where is it?
Donald Kendal:Yeah. I think it's, it's below that blue section there. Right? It's it's in a
Chris Talgo:it's in
Donald Kendal:here. Bottom right there. Yeah. Yeah. Just on funded liability.
Donald Kendal:Liability. 216,000,000,000,000.
Chris Talgo:That is just such an astronomical number. $642,000 per US citizen. Right. Look at that. Social Security, unfunded liability, 26,000,000,000,000.
Chris Talgo:Medicare, $41,000,000,000,000.
Donald Kendal:Right. Right. Yeah. That's just that's just gonna be funneling slowly into the national debt. Now
Chris Talgo:yeah. Now now
Donald Kendal:any 60 plus years.
Chris Talgo:Scroll back up for for a little bit all the way to the top, and then you can click on one other thing. You can click on the future one if you scroll a little bit to the left. You can click on yeah. So the time machine, just just click on maybe, like, 10 years from now or something, and let's
Donald Kendal:do the I didn't even know that this is
Chris Talgo:a thing. I I Go all
Donald Kendal:the way at the top there, Andy.
Chris Talgo:All the way at the top. Go to the time machine. Yeah. So I don't know. You can just, like, check one of those, but just just just see see what is how bad it's gonna get in, I don't know, 2028.
Chris Talgo:Sure.
Donald Kendal:Yeah. Click 2028. I've never seen
Chris Talgo:this before. A couple years down the road. 46 trillion. Another ten $1,000,000,000,000,000, and that's with no new spending.
Donald Kendal:Oh, yeah. That's that's that's just following the curve. You know? That's that's any other get that. Wars or other catastrophes or anything like that.
Chris Talgo:We would be at a 147% of GDP. That is oh, I mean, just look at that number. Look at 1980 even in the you know, when Reagan first came in. And the 9 the late 19 seventies were not good, you know, by any means. But, I mean, jeez, we go from 34% of a debt to GDP ratio to a 150%.
Donald Kendal:Right. In 4
S.T. Karnick:hours, I don't know. Reagan that the increase in debt under Reagan was entirely caused by increases in spending. Revenues went up when you put taxes. Mhmm.
Chris Talgo:And the debt the debt to GDP ratio went down, and that matters a lot because here's the thing. Under under Biden, we've had very, very slow growth, like 1%, you know, if we're lucky most of the time. If we had robust growth at 3, 4, 5, 6, or 7%, something like that, Oh my god. The the the the the the national debt would dwindle because there would be so much more revenue coming in. Like Sam said, there's something called the laugher curve, and and this is this is just, like, common sense.
Chris Talgo:If you tax a 100% of all revenue, are you gonna get, like, 80,000,000,000,000? No. Of course not. You're gonna get a close to to 0. At the same token, if you if you tax 0, are you gonna get any revenue?
Chris Talgo:No. Of course not. There's a sweet spot, and I I I can't remember the exact number. But like Sam said, it's it's less than 17%. You find that that sweet spot like Reagan did, and you get the tax revenue just pouring in.
Chris Talgo:But but it's fine because you're you're having economic growth, occur so much greater than that. That's how people get ahead. That's how the nation gets ahead. We have not been doing that for a very long time. And every single time they say more taxes is the solution, no.
Chris Talgo:More taxes are gonna put us into a, even greater, amount of debt. Sure.
S.T. Karnick:This happens in cities and states that they get into this debt spiral. You know, that's because there's a big difference between raising tax rates and raising tax revenues. Yeah. And you see all these graphs and numbers showing the deficits and debts, and those are useful. But it's only if they're in company by the figures on the spending because the spending is what drives the deficits always.
S.T. Karnick:It's always that tax rate cuts lead to tax revenue increases. This is especially the case when we are so far along the Laffer curve as we are today, where taxes are so high, the and regulation, which is a tax, is monumentally it has increased monumentally under Biden much faster than it did under Barack Obama, which was pretty much unprecedented. The only one I can think of who, added regulation on that level was probably Richard Nixon. So what's going on here is that you're putting so much weight on the people who pay taxes that they can't get out from under it. They can't they can't you can't raise more money from them.
S.T. Karnick:The only thing you can do when we're so far along the lever curve, as you see here, is lower the tax rate and that will increase the revenue rapidly.
Donald Kendal:Yeah. The go ahead. No. No. Go ahead, sir.
Chris Talgo:Yeah. Yeah. There's another aspect of this, Sam. You know, years ago, most people in this country worked, meaning that they were net makers. They were they they created wealth.
Chris Talgo:As Mitt Romney said famously in 2012, 46% of this country now is a net taker. It's gotten worse because of COVID and the the fact that so many millions of people have dropped out of the labor force and just said, I can figure out a way to live off government benefits without working. The more you're doing that, the more pressure you're putting on those of us who are actually paying our taxes. So that's a whole another aspect of this, and that's why I go back to the Bill Clinton thing. Because Bill Clinton said, you know what?
Chris Talgo:We're gonna do welfare reform, and we're gonna get people back in the workplace. By getting people back in the workplace and off of welfare, it's a it's like a like a double good. Not only are they not sucking up welfare benefits, whether it's SNAP or any of the other welfare benefits, but they're also producing tax revenues. That's what we want. Right now, in the United States of America, half the people, they don't pay 1 cent of income taxes.
Chris Talgo:And guess what? They get money from the government. They just get money. They don't pay a cent because they don't work. But they but they get all these all these taxes back, and on top of that, they get all the federal and, state benefits.
Chris Talgo:So that's just another huge portion of this that, you know, during Donald Trump's presidency, one of the greatest things is that the liberal participation rate went up. It went up among all groups. Under Joe Biden, we've had the exact opposite occur. We've had the liberal participant participation rate go down among all groups. And, Donnie, I think, you and I talked about this once.
Chris Talgo:In the 19 fifties, 90% of all men in, like, working age years, I guess it's, like, you know, 18 to 60 or something like that, 90% worked. Nowadays, it's like it's like 50. So, like, how is that possible? You know, it's just another aspect.
S.T. Karnick:The labor force participation rate after the Great Recession went down by about 2 percentage points, And it only very slowly worked its way back up, really beginning with the Trump administration. And then in 2019, it's it's almost back up to its peak. And then what happens? You get 2020 drops down. Now it's it's it's going back up.
S.T. Karnick:And I think that the problem that we have is that we are suppressing economic growth in so many ways that although you're getting more labor force participation, you're not getting as much as much out of them. You're not getting the productivity increases that you used to get. And in fact, productivity increases usually track with participation growth, labor force participation growth. They usually track with that. So I think what we're what we're seeing here is that there's too much suppression of the supply side by government.
S.T. Karnick:And I always I tend not to like the term the economy. It's the production of goods and services, the supply of things. And that's what really counts. And our government, especially the federal government, but all levels, have been suppressing the production of goods and services so badly that you cannot you cannot sustain any kind of growth. And certainly you can't you can't sustain an empire in that way.
S.T. Karnick:Now that Wall Street Journal article, boy, I I I love that.
Donald Kendal:That's a perfect segue because I'm gonna read off some of these, like, historical cases because a lot of the article is based around just pointing out, you know, some of these other empires throughout history and them kind of running headlong into this problem. So I I I this is like the meat of the article, so I do want to just kind of read through, some selected pieces of this, and then I'll get your take on it. But, Rome, it says after establishing their empire as the world's most powerful, Rome's leaders began spending lavishly on imperial administration and on the army in the 3rd century. Empire, emperors financed the resulting debt by debasing the currency, which generated high inflation. The weakened, this weakened the empire's ability, stable oh my goodness.
Donald Kendal:I can't read. Stability and defenses leading to its demise in the 5th century. It goes on to talk about Spain. Spain financed its military adventures and globe spanning empire with extensive borrowing from abroad and high taxation, eventually losing its status as Europe's greatest power. France.
Donald Kendal:France traveled much to the same path and defaulted frequently on its debt. Ultimately, profligates borrowing and spending by the court at Versailles caught up with the royals producing deindustrialization and fiscal crisis that led to a revolution in 17/89. I think that went really well for them, by the way. Yeah. Yeah.
Donald Kendal:China, China's, Qing dynasty went through a similar cycle and encountered a similar fate. It was the leading world economic power in its time, but spending and foreign borrowing in the 19th century led to damaging underinvestment in the infrastructure needed, to keep advancing. Great Britain. Great, Great Britain may offer the most compelling parallels. It oversaw the world's most far flung empire through the 18th 19th centuries before war spending, including the fight against the American revolution, produced high debt.
Donald Kendal:It recovered, but by the 20th century found that it could no longer afford, the spending required to maintain an army and navy to police the empire and to finance rapidly growing social programs. So debt began crowding out other investments, and economic weakness sapped the strength of the British pound. The pound ceased being the world's leading reserve currency, and the British empire soon declined. So, Sam, I'll go back to you because you were gonna reference all of this stuff. It seems like this is just a pattern that occurs throughout time.
Donald Kendal:I I don't know if it's just, like, baked into the cake, and these people have a level of hubris where they can't see that, that their their their spending based on just their their current status is going to lead them toward down a path of demise. But I don't know. What do you think? Are we are we destined for this? Could this be seen as a wake up call?
Donald Kendal:We can turn this boat around. What are your thoughts?
S.T. Karnick:Well, it's baked into the cake if that's the cake you want. Go back up just above the picture of Bill Clinton there. And the paragraph starts historian Neil Ferguson, who's everybody loves Neil Ferguson lately, and he's a doggone good historian. Look at this word down here. Line 3.
S.T. Karnick:Any great power that spends more on debt service than on defense will not stay great for very long. I have that word defense highlighted because we're not spending on defense. We're spending on empire. Defense, we can defend our country very easily. We have the Second Amendment.
S.T. Karnick:We've probably got the best defense of all of all human history. What we do, though, is we have built an enormous empire. It is incredibly wasteful. That's why all those other empires fell, because empires fall because they are wasteful. Full.
S.T. Karnick:And one of the reasons empires fall is that you have to protect those far flung interests. So what do you do? You you buy people and weapons. All right. How do you get that money?
S.T. Karnick:You get it from your taxpayers. But there is the iron law that you can only squeeze so much out of the taxpayers. So what happens is somehow it's too costly to hold on to your empire. Well, yes, it is. It is too costly to hold on to any empire.
S.T. Karnick:And the United States was never designed to have an empire. In fact, if you want to go back and blame somebody, blame Thomas Jefferson because he made the Louisiana Purchase, which really was the first step in us becoming an empire. And of course, I love Jefferson in principle, but as a president, he did some pretty dubious things. And don't forget that he sent, he sent troops to the Barbary Coast to rescue Americans from pirates, which was a good thing to do. But when you come down to it, we have had an empire almost from the beginning, and it becomes increasingly expensive, increasingly wasteful.
S.T. Karnick:If the United States were in fact to dial back on its international obligations, we would have a huge step towards solving all these problems because the key is it's all about spending. Taxes don't have anything to do with it. Tax rates, if you if you don't have anything to do with causing the deficit, except insofar as tax rates being too high, makes it impossible for you to grow the pie from which you are taking your your government spending. So we do have to choose as a nation. This would be a great question to hear the candidates, address tonight.
S.T. Karnick:Unfortunately, would probably ruin any chance of Donald Trump getting any, Nikki Haley voters on his side. But we do have to we have to confront this. We do have to confront this that that this empire that we built is what's costing is a big part of what's costing us. And and you know what? Maybe some of that domestic spending is being caused by the big drain that the empire puts on us.
Donald Kendal:Alright. I'm gonna go to Chris. I'm gonna go to Chris next. But just to defend Thomas Jefferson, Louisiana Purchase, at least that was an expansion of, like, the continuous contiguous, United States as opposed to, like, setting up shops in different parts of the, of the world to try to, like, harvest resources and stuff. But, but, Chris, we were briefly talking about this before, and you thought, like, well, you know, it's kind of hard to compare, you know, 3rd century Rome to, like, modern day United States.
Donald Kendal:So after Sam was talking and I read through all of that stuff, what what are your what are your current thoughts on this comparison?
Chris Talgo:To be honest, I I slightly disagree with Sam. Sam, I don't think that we have a modern empire. I think we've never had a modern empire. I think that, you know, when we have gone overseas, we've liberated countries, whether it be Puerto Rico or the Philippines. We did not take over those countries and plunder them for their resources.
Chris Talgo:That's just not true. So we've we've not had to do that. We've not had to, unlike the British and the French and, the Spanish did, where they went into these giant territories and said, we're gonna control all of you. And if you don't listen to us, well, then we're gonna kill you, and we're gonna do all this, like, terrible stuff. United States, we just haven't done that.
Chris Talgo:The most most of our spending is at the is on the domestic level, not at the international level. I think the spending on Ukraine is kinda stupid. I think some of that, but that's that's drops in the bucket. That is not what's really driving this. And I wish that we would actually defend our country, like, you know, actually defend our border.
Chris Talgo:So I I I I just think that the the parallels to a modern day empire with the United States is just not I mean, they're they're they're not factual.
S.T. Karnick:Actually, it would be more profitable to Americans if our government had plundered those places rather than just spending money.
Chris Talgo:We didn't do that. We went into Iraq to free the people. We didn't we didn't steal one drop of the oil. Now you can say the reason that we went in there was maybe for, you know, different reasons, but we did not go in there to plunder those countries.
S.T. Karnick:And But it was incredibly wasteful.
Chris Talgo:We went there under we went there under these I under what I consider to be, the naive auspices of we can we can go there and make them like us. When I think that culturally, they're not like us, so they are not going to instantly overnight become like us. But to say that that what we are doing now is the same as what happened in the, you know, 16th century, you know, France and Spain when they went to these far flung places and literally just took them over and plundered them, dry of all their resources, and treated those people terribly. I mean, that is just not what the United States has ever done.
Donald Kendal:I I I don't wanna get I don't wanna get
S.T. Karnick:a lot
Chris Talgo:of money.
S.T. Karnick:Dollars. 13 $13,000,000,000,000 on just Iraq. That's a lot of money.
Donald Kendal:Yeah. I mean, that's that's a lot.
Chris Talgo:We did not spend $13,000,000,000,000 in Iraq.
S.T. Karnick:When you consider all the costs and the opportunity costs. Yeah. That's what it comes to.
Donald Kendal:Yeah. I mean, the amount of I've
Chris Talgo:seen I've I mean, I'm not going to defend a war in Iraq and Afghanistan. So I disagree with, the war in Iraq.
Donald Kendal:Spending and and, you know, we could debate the amount of spending and the role in policing the world and whether or not that constitutes an empire or whatever. I still think the the idea that, like, you know, that's overextending what the original vision for, like, the United States was is pretty much without question. But I don't want to get too bogged down on this because I want to get
Chris Talgo:to just also real quick, if you just look at the amount of money we spend on on the military, we spend less than a trillion per year. Our federal budget's upwards of 6,000,000,000,000. So that means that we're spending less than 20%. So the the the whole notion that the that the main reason why we are in the place that we are in is due to overexpansion and, you know, unnecessary military spending is simply not true. I mean, the facts just do not, you know, support that.
S.T. Karnick:Oh, well, you're certainly right that the that it it's not the only reason, But I think it is emblematic of the problem, which is that we are we are by we have become by nature an empire, and and people just sort of look at that as as just a good thing to do.
Chris Talgo:Not accurate. That graph is not accurate.
Donald Kendal:I mean, yeah, like I said, we're getting we're getting bogged down. I wanna keep
Chris Talgo:I mean, but this. It's it's it's important to make sure that we get our facts straight and that we, you know, are, you know, being truthful to our viewers. I mean, just just to say to say overall that the reason why we're in this position is because we have gone on all these crazy military ventures. That's just not true.
Donald Kendal:Yeah. That's
S.T. Karnick:Well, no. No. That is not true. That isn't true that that's the only reason. No.
S.T. Karnick:We're we're spending incredibly wastefully on At home. Entitlements. Yes.
Chris Talgo:Exactly. Exactly. That's where the giant portion of the budget is going. Social Security, Medicare, Medicaid make up what, like, 2 thirds of the of the annual budget. That's where the money is going.
Chris Talgo:But what the was but the what the Wall Street Journal article percent. Exactly. What the Wall
S.T. Karnick:Street Journal article was positing is to me wrong that that we're we're going to go down because we are because our needed spending is so high. That's not it. We're making these choices. And that was my point is, is that I was using that as a as a representative of the whole problem, which is we make the choice to spend however many $1,000,000,000,000 in places like Iraq and Syria and Africa. We've been spending tons of money in Africa.
S.T. Karnick:We don't even talk about it. And
Chris Talgo:what that is, bucket compared to
S.T. Karnick:Yeah. Afghanistan. But but spending all that money and that's part of the whole problem is that we're spending all that money on domestic things as well, snap and so forth. And these things are totally unmanaged just like those wars were totally unmanaged. And we are we are these are choices.
S.T. Karnick:Whereas we're we're the writer of the Washington Wall Street Journal piece, I think is wrong. Saeb is that these are not necessary things. They're choices. We could choose to cut spending at the very least to the 2019 level. We could choose that.
S.T. Karnick:We choose not to.
Chris Talgo:I agree. But but if we were to repeal Obamacare and if we were to get rid of the Medicaid, Medicaid expansion that went along with it, I mean, that that in and of itself would be one of the biggest cuts of all time. I mean, that in and of itself would would be a greater cut than if they were to cut the entire military to 0. Think about that.
Donald Kendal:Right. But I think it's also kind of disingenuous on the other side to just completely dismiss any of the foreign battles throwing money at. I mean, like, how much how much conservative outrage has there been over sending 1,000,000,000 of dollars to Ukraine? You know? Like, that's that's also part of this equation too.
Donald Kendal:Right?
S.T. Karnick:Of course.
Chris Talgo:Of course.
Donald Kendal:But, so, yeah, what whatever makes up, you know, like, I I can go through all of those examples that I read off, through the Wall Street Journal, and it just basically boils down to overleveraging the spending, debasing the currency, all of those sorts of things. What they're spending on historically, you know, in the past, it's it's, you know, driving these, these kind of empires or whatever, might not resemble exactly what we have today, and what we're spending on. The the composition of what the spending on is different, but the spending is the thing that I wanted to focus on, not getting bogged down on exactly what it was. Right? And in that Great Britain, example, it said, the the pound ceased being the world's leading reserve currency, and the British empire soon declined, which is a transition to the other topic that I wanted to talk about, which is the US dollar's role as the global reserve currency.
Donald Kendal:So one of the major macroeconomic factors that have helped secure the United States at the top of the economic food chain is that the United States dollar, being the major world reserve currency. So this arrangement goes back to, like, the 19 forties with the Bretton Woods agreement where delegates of 40 plus state, nations agreed to peg their currencies to the US dollar. The system made the US dollar the central currency for international trade and finance. And then in the seventies, the dollar status of world reserve currency was further cemented when the, petrodollar system was established that essentially required all oil purchasing and oil selling to be done using the dollar. But over the past several years, maybe even more than that, there has begun fears that this global arrangement might be coming to an end.
Donald Kendal:So there's been there's always stories here and there. They just pop up, and they always have this kind of subtext of, like, oh, is this is this signaling something bad for the world reserve currency status of the US dollar? Some of these stories include, like, like, China selling dollars off their balance sheet, buying gold, other countries diversifying their portfolios. More recently, western sanctions on Russia accelerated efforts from Russia and other BRIC countries to develop dollar when it comes to international transactions. And the most recent story, as far as I'm aware, is in regards to Saudi Arabia.
Donald Kendal:Over the past 50 years, the US relationship with Saudi Arabia has been changing. US represents a decreasing percentage of global GDP. The US has also pursued more domestic oil production, and perhaps most importantly, China has become Saudi Arabia's biggest oil customer. So because of these things and more, I'm sure Saudi Arabia has a growing appetite to foster a system that does not require the US dollar, for its other international transactions. So one of the biggest problems with this is the threats that if the dollar loses this global reserve status and countries no longer need to hold gobs of dollars for international transactions, then those dollars would likely and naturally flow back into the US monetary system, leading to potentially massive levels of inflation.
Donald Kendal:So, this this is kind of one of the more major threats that, could kind of upend the the American empire, and I use that kind of colloquially. You know? Like, I'm not I'm not going by, like, the definition of the term, just like the the hegemony of the United States when it comes to, like, global economic affairs. But, what what are your thoughts on that, Sam?
S.T. Karnick:Well, I think you make an important point here, and I'd like to touch on the the issue of if the if those dollars were to flow back into the United States. I think what is more likely is that these these dollars would, become nonexistent, as as banks would, as you create a a decrease in the production of goods and services in your country and you lend banks lend less because that's what you do. You you borrow money to build things and buy things. And that's both on the consumer level, of course, and the, the business level, not to mention the the government level. So what happens is that is is banks withdraw this money from the economy.
S.T. Karnick:Then what you actually get is it is a decrease in in what's called GDP, gross domestic incredible distortions that the US incredible distortions that the US government has made in the economy is is a retrenchment, overall. And so the the flow of those dollars, I think they would actually kind of disappear. Mhmm. It's so it's worse than I think that's worse than what you're describing.
Chris Talgo:I think it's worse too. And here's here's another reason why. Because as we have just been printing all this money for the past few years, I mean, we're talking trillions. If you go and look at, like, m two money supply and stuff like that, I mean, it is just crazy. Guess what happens to the ballot beach and every dollar?
Chris Talgo:It goes down. So these countries are, I think, are starting to say, wait a second. You're printing funny money so that you can just pay off that that crazy debt that you guys have grown, and you want us to also do that? And they're saying, no. No.
Chris Talgo:No. No. No. No. No.
Chris Talgo:No. That's why an alternative currency or even a, you know, global currency, I think is more than ever possible because I think what they're saying is, sorry, United States. You guys did a terrible job, you know, maintaining the the, value of the dollar, and therefore, we don't want to we don't wanna let be dragged down with you, and that is what we are doing. And that is a really dangerous game to start playing.
S.T. Karnick:Yeah. So A quick a quick observation about the amount of dollars out there. There's a there's a good argument to be made that China actually has too few dollars. China does not tell us how many dollars they actually have in their accounts. So there's a good case to be made that China doesn't have enough dollars, And that's why China and and other BRICS countries as well.
S.T. Karnick:In fact, countries around the world have been buying a lot of gold.
Chris Talgo:The
S.T. Karnick:problem is you have to get those dollars regardless of whether you have gold. All that will do is that will increase the price of gold more and more. And it will push down the value of the renminbi even farther. The Chinese the Chinese currency, it'll push down the value of that or push down the value of the ruble or push down all the values of all those currencies. And guess which currency wins?
S.T. Karnick:The dollar. Sure. So the funny thing is I think there's not necessarily enough dollars in the world right now.
Donald Kendal:Yeah. Yeah. Okay. So one one last thing that I wanna bring up on this topic is the, the Atlantic Council, they just launched a dollar dominance monitor. So this is a new tracker that analyzes why the dollar is currently the world's dominant reserve currency, presents indicators for tracking China's progress and creating an alternative financial infrastructure and creates a novel framework and dataset for evaluating strengths and weaknesses of the world's major currencies.
Donald Kendal:And according to the Atlantic Council, despite the efforts of Russia and China and Saudi Arabia, that the dollar's role as the primary global reserve currency remains strong and is secure for the near and medium term. And, the tracker does show a decline in the dollar over the past, I don't know, couple of decades in terms of world reserve status, or at least, like, the way that it comprises people's portfolios of these other countries. It also shows BRIC countries loading up on gold. So I don't think
S.T. Karnick:on gold.
Donald Kendal:The yeah. So I don't think the intention of the Atlantic Council's tracker is just to say, like, oh, there's nothing to worry about, folks. I think that they just are trying to, like, counter, like, unwarranted panic. And to Sam's point about China, to me, you know, like, increasingly so, like, at least since, like, the nineties, you know, people have been trying to take, like, China into account with its role in kind of the global economic or just, like, foreign policy realms. But the the the biggest difficulty with that is that, like, China is such like an x factor because they're so not transparent with anything that they do.
Donald Kendal:I mean, we saw that in spades when it was, during the COVID times. So, like, there is a, like, a, like, a 5050 shot. Like, if you're at the craps table of whether or not, like, China is gonna be, like, a superpower in the future or it's just gonna, like, crumble into dust under their ghost cities. You know, like, we don't we don't really know. But, but, yeah, I don't know if it's, like, sound the alarms, like, you know, the dollar's crashing right now or anything or if we've got a few decades.
Chris Talgo:China China one
S.T. Karnick:thing we do know oh, go ahead, Chris.
Chris Talgo:Oh, yeah. So China just erased $7,000,000,000,000 in value from their big zombie corporations. But guess what, Donnie? This is a very important, aspect of this. The fact that China has access to our financial markets and the fact that you can and and I I hate to say this, but that, financial managers, asset managing companies like BlackRock, like Vanguard, like State Street are pouring 100 of 1,000,000,000 into China.
Chris Talgo:That is just keeping China, you know, propped up for the time being. If we were to just say once and for all China, you guys don't play by the rules. You steal intellectual property. You commit human rights abuses, all this terrible stuff. We are going to to to not let you, have access to, US financial markets.
Chris Talgo:China would crumble in in in literally instantly. So, you know, but but then at the same time, you know, we and our companies want to have access to that market. So we are in a we're in a, like, a slippery position right now because, you know, China is definitely an adversary. They're definitely a threat. They're definitely, you know, probably going to invade Taiwan at some point.
Chris Talgo:But so many American companies out of sheer greed and short term, you know, wanting to, you know, increase the, you know, the the the flow of of of money, they look the other way and allow China to do all this. I don't think that's gonna keep going on for years, especially if Donald Trump comes back into the White House in 2024 or 2025. So given all that, I think that, you know, when you look at the the the the long term trends, you know, there's still hope, but the short term trend shows that we need to get our house in order, and that goes back to the to the very beginning of this thing. We need to get our fiscal house in order. Mhmm.
Donald Kendal:We certainly do need to final words on this.
S.T. Karnick:Okay. Thank you. We certainly do need to get our fiscal house in order, and China is a great example of why. China is swamped in debt right now. China is in very, very bad condition.
S.T. Karnick:They're in no position to to tell anybody anything. And one of the things that's happening, like Chris pointed out, that they that they're marking down, debts to 0. They're zeroing them up. That's what what I talked about, the the the idea of the money coming out of your economy. So what's happening there, though, is why is all this happening?
S.T. Karnick:Because the US in particular is importing so much less from China than we were just a few years ago. And so China can't get those dollars. That's why they're stuck and they're trying to buy gold. But this again, it's just going to push up the value of the dollar. I think if anything, the the future is in the other direction.
S.T. Karnick:Strength of the United States, provided we make the choice to stop spending so much money through our government.
Chris Talgo:And it reshoring some manufacturing back here because for a long time in the eighties, nineties, and early 2000, China was the the the the cheapest source of labor. It's not that way anymore. China's, you know, they they they wanna be a developing country, but they're not. They are definitely a developed country, and they are they are having trouble, transitioning from the developed, you know, country into this modern, country with a thriving middle class. Yeah.
Chris Talgo:So China's got its whole I mean, China's economy is a basket case.
S.T. Karnick:Right.
Chris Talgo:We can solve this. This is all self induced, and that's the best. That to me is the most optimistic part about this, but it's going to take some courage.
Donald Kendal:Yeah. I was just gonna say, like, it's just amazing how much, like, could change if we just, like, just made, like, some simple changes. You know? Like, let's stop in November. Let's stop putting our our our foot on the throat of reliable energy.
Donald Kendal:Let's like Right. Right. Enhance that, energy production in the United States. Let's like, you know, if we're going to reshare the regulation
S.T. Karnick:Our government has to get out of the way of production in this country if we're going to be insured.
Chris Talgo:Yeah,
S.T. Karnick:we're going to have jobs here. That's what's going to have to happen.
Donald Kendal:Sam, I was I was intending to have a little bit more time left for this, so you're going to have to be a little more brief. But for all of those that are interested, that have appreciated Sam's comments and kind of the the points and are just these topics in general. Sam, you are in charge of the life, liberty, property newsletter from the Heartland Institute. You wanna, like, tell tell folks about that, maybe briefly discuss what's on the latest issue and where they can go to subscribe to that?
S.T. Karnick:Thanks, Donnie. I really appreciate it. At the beginning of every week, we issue this newsletter. It goes out to many, many people. And what it covers is what is exactly is going on in the United States in economic terms and in terms of what is the role of government, which is to protect our life, liberty, property, not so much to extract them.
S.T. Karnick:And taking that perspective, we go through the news and look at the big big trends. So it's all the things that you've heard about today are things that we've actually covered within the last few weeks at Life Liberty Property. And I'm I'm very, pleased that we can can get some of this information out there. The things we've been talking about about China, for example, that's an issue that we've been covering for quite some time. And, it's certainly plausible to say that China is can be a great danger to the United States economically.
S.T. Karnick:But there are subtleties to these things and complexities. The our economy and our our country is are composed of wheels within wheels within wheels. It's all very complicated. And what I try to do in life, liberty, property is give you a through line so that you can see all the data. You can kind of figure out, and I'll guide you through it, that some of this data is clearly false.
S.T. Karnick:Some of this data is just dubious. Some of this data is actually pretty good. And so guiding you through all that to get you to get to the basic principles, looking at things from a free market perspective. And this free market perspective, in my view, is based on our rights, not based on, oh, we'll get more money. I care about that.
S.T. Karnick:But the fact is that if we are allowed to follow our our desires to to make, to make things and build things and serve one another, If we're if government gets out of the way of that, good things happen. But government doesn't have the right. Nobody has the right to tell you that you can't that you can't braid someone else's hair and take and accept money from them for it. No one has the right to tell you that That is tyranny. And we're we're enduring this throughout all of our society.
S.T. Karnick:And that's really where life, liberty, property goes. We go into those issues and look at them from the fundamental level. These are your rights. How are they being fostered and how are they being stepped on by government, and what would make a better way?
Donald Kendal:Right. Right. So you can go and subscribe to this, heartland.org/ subscribe. There's a, there's a whole actual listing of different, newsletters and different stuff that you can sign up to, but one of those listed there is Life Liberty Property, and I was encouraged to do so. There's a very interesting, very interesting, one this week about, you know, just this kind of a state of the spending power and what that how that translates into housing and all of that.
Donald Kendal:That was that was very interesting. I was planning on doing more of that in this episode, but we are short of time. But, Thank
S.T. Karnick:you, Donnie. It'll it'll stay an issue.
Donald Kendal:No doubt. Yeah.
Chris Talgo:He hasn't been going away anytime soon. No.
Donald Kendal:It's not. It's not. Gentlemen, any last words? Any, funny stories? Anything you wanna get off
Chris Talgo:your chest before we wrap it up for this week?
S.T. Karnick:Hearing I'd just like to say that that the the key thing is choice. These are choices that we make as a people, and we have a chance in November to make choices. Let's let's, do the right thing.
Donald Kendal:You know, and and it just reminds me, you know, because we started off the joke, like, talking about Trump and Biden, and then we were, like, talking about these, like, very heady macro issues. And it just further just, like, if I ever had any doubt, this just, like, solidified it, that I am just so much more interested in talking about these policy discussions than politics. And, like, you know, whether or not you hate Donald Trump because of the mean things he says or whatever, it's like all of that is just background noise for these, like, much larger, much more important things that are going on, and that's what we try to give when we're when we do these episodes on in the tank. But I do wanna thank you all for tuning in for this episode of the in the tank podcast. Join us every week for a new episode.
Donald Kendal:If you are listening to us on iTunes, the audio only version of this, please leave a review for us. That would be greatly appreciated, or you can join us. And I should say, you could join us a day earlier, Thursdays at noon CST, where we are live streaming this on Facebook and YouTube and Rumble and X. And you can join the conversation for your comments and questions in the chat. Maybe we'll show your comment on the screen.
Donald Kendal:Maybe we'll address your questions on the fly. Help out our show just by hitting that like button, sharing this content, to more to more people. Also, we're demonetized. So if you wanna support the show financially, you can still do so by going to heartland.org slash in the tank and, and specifically support this show. It is greatly appreciated when you do so.
Donald Kendal:If you'd like, you would follow us on x at in the tank pod. And if you have any comments, questions, or suggestions for the show, feel free to email us at in the tank podcast atgmail.com. Sam Carnic, thank you for being on. Where where can the find people find, more of your work?
S.T. Karnick:Thank you, Donald. You can check out my, socials at atstkarnick. And, of course, subscribe to Life Liberty Property. And, also, you'll find me in all kinds of, newspapers and and other websites where I write plenty of op eds. So check us out at the Heartland Institute, and you'll find plenty to, stimulate your anger or happiness.
Donald Kendal:Fantastic. And, Chris Talgo, what do you have to pitch today?
Chris Talgo:I have a product by you to pitch. It's called the Heartland 40th anniversary benefit dinner. You put together this amazing postcard. It's coming up soon, September 13th, Chicago. Be there.
Chris Talgo:You gotta be there. That's all I can do.
Donald Kendal:That's good. Way to way to pitch that. That's team player right there. Alright. Thank you all for tuning into this episode.
Donald Kendal:We will talk to you next
S.T. Karnick:week. He's a lying dog faced pony soldier.
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