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Zar. You're Zary. I'll tell you exactly what it is. I'll tell you what it is. You can tell me if it's right. Brioni.
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Yes, of course it's Brioni. Briion spread car. Look at that. How many years have I spent being rich? When a man
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turns 50, the only thing he should wear is broni. The stitching is Looks very luxurious. That's how Chimath knew,
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right, Jimoth? How'd you figure it out? The stitching? It's just how it lays with the collar. To be honest with you,
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it's the button catch. The Brion has a very specific style of button catches. If you don't know what that means, it's
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because you're [ __ ] ignorant, malcontent yourself. I'm looking it up right now. Right. Yeah.
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yada yada yada to join us at the summit. All right. It's a lot in the docket, but
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there's kind of a very unique thing going on in the world. David, everybody knows about AI doomerism. Basically,
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people who are concerned uh rightfully so that AI could have some, you know, significant impacts on the world. Dario
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Amod said he could see employment spike to 10 to 20% in the next couple years. They're 4% now as we've always talked
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about here. He told Axio that AI companies and government needs to stop sugar coating what's coming. He expects
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a mass elimination of jobs across tech, finance, legal, and consulting. Okay, that's a debate we've had here. And
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entrylevel workers will be hit the hardest. He wants law makers to take action and more CEOs to speak out. Poly
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market thinks regulatory capture via this AI safety bill is very unlikely. US enacts AI safety bill in 2025 currently
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stands at a 13% chance. But uh Sax, you wanted to discuss this because it seems like there is more at work than just a
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couple of technologists with I think we'd all agree there are legitimate concerns about job destruction or job
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and employment displacement that could occur with AI. We all agree on that where we're seeing robo taxis start to
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hit the streets and I don't think anybody believes that being a cab driver is going to exist as a job 10 years from
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now. So there seems to be something here about AI dumerism but it's being taken to a different level by a group of
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people maybe uh with a different agenda. Yeah. Well, first of all, let's just acknowledge that there are concerns and
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risks associated with AI. It is a profound and transformative technology and there are legitimate
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concerns about where it might lead. I mean the future is unknown and that can be kind of
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scary. Now, that being said, I think that when somebody makes a pronouncement that says something like 50% of white
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collar jobs are going to be lost within 2 years, that's a level of specificity that I think is just unknowable and is
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more associated with an attempt to grab headlines. And to be frank, if you go back and look at Anthropic's
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announcement or Daario's announcement, there is a pattern of trying to grab headlines by making the most
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sensationalist version of what could be a legitimate concern. If you go back three years ago, they created this
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concern that AI models could be used to create bioweapons. And they showed what was supposedly a
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sample I think of claw generating an output that can be used by a bioteterrorist or something like that.
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And on the basis of that it actually got a lot of play and in the UK Rishiun got
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very interested in this cause and that led to the first AI safety summit at Bletchley Park. So that sort of concern
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really drove some of the initial AI safety concerns. But it turns out that that particular output was discredited.
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It wasn't true. I'm not saying that AI couldn't be used or misused to maybe create a boweapon one day, but it was
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not an imminent threat in the way that it was portrayed. There have been other examples of this. You know, obviously
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people are concerned about could the AI develop into a super intelligence that grows beyond our control. Could it lead
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to widespread job loss? I mean, these are legitimate things to worry about, but I think these concerns are being
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hyped up to a level that there's simply no evidence for. And the question is why? And I think that there is an agenda
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here that people should be concerned about. So, let's start with maybe Freeberg things that we all agree on
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here. There are millions of people who drive trucks and Ubers and lifts and door dashes.
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You would, I think, agree the majority of that work in but 5 to 10 years, just to put a number on it, will be done by
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self-driving, robots, cars, etc., trucks. Yeah, Dave, I think it's that might be the wrong way to look at it or
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I wouldn't look at it that way. And maybe I'll just give frame it a different way, please. If I'm deploying
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capital, let's say I'm a CEO of a company and I can now have software that's written by AI. Does that
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mean that I'm going to fire 80% of my software engineers? Basically, it means one software engineer can output, call
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it 20, 50 times as much software as they previously could by using that software
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generation tool. So the return on the invested capital, the money I'm spending to pay the salary
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of that software engineer is now much much higher. I'm getting much more out of that person because of the unlocking
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of the productivity because of the AI tool than I previously could. So when you have a higher ROI on deployed
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capital, do you deploy more capital or less capital? Suddenly you have this opportunity to make 20 times on your
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money versus two times on your money. If you have a chance to make 20 times on your money, you're going to deploy a lot
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more capital. And this is the story of technology going back to the first invention of the first technology of the
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caveman. When we have this ability to create leverage, humans have a tendency to do more and invest more, not less.
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And I think that's what's about to happen. I think we see this across the spectrum. People assumed, "Oh my gosh,
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software can now be written with one person. You can create a whole startup. You don't need to have venture capital
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anymore. In fact, what I think we're going to see is much more venture capital flowing into new tech startups.
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Much more capital being deployed because the return on the invested capital is so
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so so much higher because of AI." So generally speaking, I think that the the premise that AI destroys jobs is wrong
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because it doesn't take into account the significantly higher return on invested
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capital, which means more capital is going to be deployed, which means actually far more jobs are going to be
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created, far more work is going to get done. And so I think that the counterbalancing effect is really hard
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to see without taking that zoomed out perspective. To to to respond to Sax's point, I do think anytime you see a
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major change socially, society, there's a vacuum. How's the system going to operate in the future? And anytime
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there's a vacuum in the system, a bunch of people will rush in and say, I know how to fill that vacuum. I know what to
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do because I am smarter, more educated, more experienced, more knowledgeable, more moral. I have some superiority over
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everyone else. And therefore, I should be in a position to define how the new system should operate. And so, there's a
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natural kind of power vacuum that emerges anytime there's a major transition like this. and there will be
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a scrambling and a fighting and a whole bunch of different representation. Typically fear is a great way of getting
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into power and people are going to try and create new control systems because of the transition that's underway. Okay.
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You're going to see this around the world. Yeah. I mean, uh, so Chimath, it's pretty clear, you know, Freeberg
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didn't answer this question specifically, so I'm going to give it to you again. You would agree jobs like
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driving things are going to go away. If we had to pick a number somewhere between 5 and 10 years, the majority of
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those would go away. he's positioning, hey, a lot more jobs will be created because there'll be all these extra
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venture capital and opportunities, etc. But job displacement will be very real and we're seeing, I think, job
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displacement. Now, you had a tweet recently, you know, you were talking about entry level jobs and how that
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seems to be going away in the white collar space. So, where do you land on job displacement? Freeberg's already
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kind of given the big picture here, but let's step back to for people who are listening who have relatives who drive
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Uber or a truck or are graduating from college and want to go work at a, you know, I don't know, the Magnificent 7 or
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in tech and they're not hiring and and we know the reason they're not hiring because they're leaning into AI. So,
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let's talk about the job displacement in the medium term. I'm going to ignore your question and I'm going to Why
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should you be any different than the other? So I now content on this podcast. There's two people not wanting to answer
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the question about job displacement. Interesting trend. No, no. We'll go back to that. Let me start by just saying
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that it seems that these safety warnings tend to be pretty coincidental with key fundraising moments in
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anthropic journey. So let's just start with that. And if you put that into an LLM and try to figure out if what I just
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said was true, it's interesting, but you find it's relatively accurate. I think that there is a very smart business
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strategy here. And I've said a version of this about the other companies at the foundational model layer that aren't
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Meta and Google because Meta and Google frankly sit on these money gushers where
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they just generate so much capital that they can fund these things to infinity. But if you're not them, so if you're
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OpenAI or if you're anthropic, you have to find an angle. And I think the angles
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are slightly different for both. But I think what this suggests is that there's a pattern that exists and I think that
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that explains some of the framing of what we see in the press, Jason, and why we get
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these exaggerated claims. Perfect. So there are people who are doing this for nefarious reasons is I I guess where
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you're sort of getting at here. It's a way to market. It's smart. It's smart. If you fall, it's up to you. Yeah. Okay.
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Well, there's also an industrial complex according to some folks that are backing this. If you've heard of
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effective altruism, that was like this uh movement of a bunch of I don't know, I guess they consider themselves
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intellectual sachs and they uh were kind of backing a large swath of organizations that I guess we would call
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in the industry astroturfing or what do they call it when you make so many of these organizations that they're not
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real in politics and flooding the zone perhaps. So if you were to look at this article here, Nick, I think you have the
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AI existential risk um industrial complex graphic there. It seems like a group of people according to this
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article have backed to the tune of 1.6 billion, a large number of organizations to scare the be Jesus out of everybody
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and make YouTube videos, Tik Toks, and they've they've made a map of it. There's some key takeaways here from
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that article where it says here that it's an inflated ecosystem. There's a great deal of redundancy. Same names,
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acronyms, logos with only minor changes. Same extreme talking points. Same group
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of people just with different titles. Same funding source. There's a funding source called Open Philanthropy which
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was funded by Dustin Moskovitz who is one of the Facebook billionaires. Jim, you worked with him, right? I mean he
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was wasn't he like Zuck's roommate at Harvard or something and one of the first engineers made a lot of money so
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he funded this he he's he's an EA and he funded this group called Open Philanthropy which then has become the
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feeder for essentially all these other organizations which are almost different fronts to basically the same underlying
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EA ideology and what's interesting is that the guy who set this up for Dustin Holden Karnovski who is a major
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effective altruist and was doing out all the money. He's married to Daario's sister and she she's I guess associated
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with EA and she was one of the co-founders of Anthropic. So these are not coincidences. I mean the reality is
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there's a very specific ideological and political agenda here. Now what is that agenda? It's basically global AI
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governance if you will. They want AI to be highly regulated but not just at the level of the nation state but let's say
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internationally supernationally to well if you just do a quick search on global compute governance it'll tell you
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what the key aspects are so number one they want regulation of computational resources this includes access to
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GPUs they want AI safety and security regulation they want international you call from globalist agreements and they
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want ethical and societal considerations or policy built into this. Now, what does that sound like? That sounds a lot
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to me like what the Biden administration was pursuing. Specifically, we had that
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Biden executive order on AI, which was 100 pages of Bernson regulation that was designed to promote AI safety, but had
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all these DEI requirements. So, you know, it led to woke AI. You remember when Google launched Black George
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Washington and so forth, they had the Biden diffusion rule which created this global licensing framework to sell GPUs
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all over the world. So extreme restrictions on proliferation of servers of computing power. They created what's
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called the AI safety institute and they again fostered these international AI summits. So if you actually look at what
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the Biden administration was tangibly doing in terms of policy and you look at what EA's agenda is with respect to
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global compute governance, they were pushing hard on these fronts. And now if you look at the level of personnel,
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there were very very powerful Biden staffers who now all work in anthropic. So probably the most
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powerful Biden staffer on AI over the past four years was a lawyer named Tun Chabra and he now works at Anthropic for
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Daario. Elizabeth Kelly who was the founding director of the AI safety institute in the government now works at
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Anthropic. Like I mentioned Daario's sister is married to Holden Karnnowski who dos out all the money to these EA
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organizations. So if you were to do something like create a network map, you would see very quickly that there's
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three key nodes here. There's the effective altruist movement of which Sam Bankman Freed's the most notable member
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but which I think Dustin Mos is now the main funer. There's the Biden administration and like the key staffers
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and then you've got anthropic and it's a very tightly wound network. Now why does
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this matter? Let's get Yeah. Also the goals I think is Yes. Well, the the goal, like I said, is is global compute
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governance. It's basically establishing national and then international regulations of AI. Now, but they would
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claim, let's just pause here for a minute. They would claim the reason they're doing it. And so, we we'll we'll
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save if we believe this or not, but they are concerned about job destruction in the short term. They're also concerned
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as science fiction as it is that the AI when we get to like a sort of generalized super intelligence is going
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to kill humanity. That this is a nonzero chance. Elon has said this before. They've sort of taken it to a almost
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like a certainty. Yes, we're going to have so many of these general intelligences. But they only believe
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that when they're raising money. Well, that's what I'm sort of getting at. Like, so I think they believe it all the
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time, but maybe maybe the press releases are time for for the fun building. But let me let me answer that. Right. Yeah.
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Yeah. Look, I mean, it is a great product. Claude kicks ass. I'm more interested in the political dimension of
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this. I'm not bashing a specific product or company. But look, I think that there
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is some nonzero risk of AI growing into a super intelligence that's beyond our control. They have a name for that. They
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call it X risk or existential risk. I think it's very hard to put a percentage on that. I'm willing to acknowledge that
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is a risk. You know, I think about that all the time and I do think we should be
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concerned about it. But there's two problems I think with this approach. Number one is X-Risk is not the only
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kind of risk. I would say that China winning the AI race is a huge risk. I don't really want to see a CCP AI
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running the world. And if you hobble our own innovation, our own AI efforts in the name of stomping out every
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possibility of X-risk, then you probably end up losing the AI race to China because they're not going to abide by
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those same regulations. So again, you can't optimize for solving only one risk while ignoring all the others. And I
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would say the risk of China winning the AI race is, you know, it might be like 30%. Whereas I think X risk is probably
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a much lower percentage. So there are there are other risks to to worry about. And I I do think that they are
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single-mindedly focused on scaring people with some of these headlines around first it was the bioweapons then
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it was the super intelligence now it's the job loss and I think it's a tried andrue tactic of people who want to give
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more power to the government to scare the population right because if you can scare the population and make them
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fearful then they will cry out for the government to solve the problem and that's what I see here is that you've
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got this elaborate network of front organizations which are all motivated by this EA ideology. They're funded by a
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hardcore leftist. And by the way, I became aware of Dustin's politics because of the Chase Bodin recall. I
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found out that he was a big funer of Chase Bodin. Remember this? Yeah. Dustin Mossmus and Carrie Tuna, his wife.
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Also, Reed Hastings just joined the board of of Anthropic. remember when he back in 2016 to tried to drive Peter
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Teal off of the board of Facebook for supporting Trump. So, you know, these are like committed leftists. They're
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Trump haters. But the point is that these are people who fundamentally believe in empowering government to the
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maximum more government and empowering government to the maximum extent. Now my problem with that is I actually think
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that probably the single greatest dystopian risk associated with AI is the risk that government uses it to control
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all of us. To me like you end up in some sort of Orwellian future where AI is controlled by the government and out of
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all the risks we've talked about that's the only one for which I've seen tangible evidence. So in other words, if
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you go back to last year when we had the whole woke AI, there was plenty of evidence that the people who were
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creating these products were infusing their left-wing or woke values into the product to the point where it was lying
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to all of us and it was rewriting history. And there was plenty of evidence that the Biden EO was trying to
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enshrine that idea. Was basically trying to require DEI be infused into AI models. and it wanted to anoint two or
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three winners in this AI race. So, I'm quite convinced that prior to Donald Trump winning the election, we were on a
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path of global compute governance where two or three big AI companies are going to be anointed as the winners. And the
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quid proquo is that they were going to infuse those AI models with woke values. And there was plenty of evidence for
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that. You look at the policies, you look at the models. This was not a theoretical concern. This was real. And
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I think the only reason why we've moved off of that trajectory is because of Trump's election. But we could very
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easily be moved back onto that trajectory. If you were to look at all three opinions here and and put them
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together, they could all be true at the same time. You've got a a number of people, some might call useful idiots,
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some might call just, you know, people with god complexes who believe they know how the world should operate. Effective
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altruism kind of falls into that. Oh, we can make a formula that that's their kind of idea where we can tell you where
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to put your money, rich people, in order to create the most good and you know, we're these enlightened individuals with
00:20:58
the best view of the world. They might be, who knows, maybe they're the smartest kids in the room, but they're
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kind of delusional. The second piece I'll do here is I think you're absolutely correct, Chimat, that there
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are people who have economic interests who are then using those useful idiots andor delusional people with god
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complexes to serve their need, which is to be one of the three winners. And then
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sack Inherent to all of that is they have a political ideology. So why not use these
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people with delusions of grandeur in order to secure the bag for their companies for their investments and
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secure their candidates into office so that they can block further people from getting H100s cuz they literally want
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to. By the way, that's the part that's very smart about what they're doing because you know it's not like they're
00:21:44
illquid. They're full of liquidity in the sense that you're bringing in people that are very technically capable and
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you're setting up these funding rounds where a large portion goes right back out the door via secondaries and so
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there's all these people that are making money having this worldview and so to your point Jason it's going to cement
00:22:02
that worldview and then they are going to propagate it even more aggressively into the world. So I think the threshold
00:22:08
question is should you fear government overregulation or should you fear autocomplete and I would say you should
00:22:16
not be so afraid of the autocomplete right now it may get so good that it's an AGI but right now it's an
00:22:23
exceptionally good autocomplete. Yeah. And I just think that again it's a tried and trueue tactic of people who want to
00:22:31
give immeasurably more power to the government to try and make people afraid and they stampede people into these
00:22:36
policies. Right. And it gives them power. Exactly. Now, why do I think this is important to talk about? On last
00:22:42
week's show, I talked about the trip to the Middle East and how we started doing
00:22:46
these AI acceleration partnerships with the Gulf States who have a lot of resources, a lot of money, and they're
00:22:51
intensely interested in AI. and the Biden administration was pushing them away. It basically said, "You can't have
00:22:56
the chips. You can't build data centers." And it was pushing them into the arms of China. The thing that I
00:23:00
thought was so bizarre is that the various groups and organizations and former Biden staffers who wrote this
00:23:07
policy have been agitating in Washington and they've been trying to portray themselves as China hawks. And I'm like,
00:23:13
wait, this doesn't make any sense because this policy again, there's there's basically two camps in this new
00:23:18
cold war. It's US versus China. you can pull the Gulf States into our orbit or you can drive them into China's orbit.
00:23:24
So, this to me just didn't make any sense. And what's happened is that frankly, you've got this EA ideology
00:23:30
that's really motivating things, which is a desire to lock down compute, right? They're afraid of proliferation. They're
00:23:38
afraid of diffusion. That's really their motivation. and they're trying to rebrand themselves as China hawks
00:23:44
because they know that in the Trump administration that idea is just not going to get much purchase. Right. And
00:23:50
your position as ZAR is a level playing field. People compete and the good guys,
00:23:58
you know, the West should be supported to hit artificial general intelligence as fast as possible. So the bad guys,
00:24:05
China, don't get it first. That that's a well open competition. I don't know if I
00:24:11
would frame it around AGI specifically, but what I would say is that look, I think our policy should be to win the AI
00:24:16
race because the alternative is that China wins it. And that would be very bad for our economy and our military.
00:24:22
How do you win the AI race? You got to out innovate. You got to have innovation. That means we can't have
00:24:26
overregulation and red tape. We got to build out the most AI infrastructure, data centers, energy, which includes our
00:24:32
partners. And then third, I think it means AI diplomacy because we want to build out the biggest ecosystem. We know
00:24:37
that biggest app store wins, biggest ecosystem wins, right? And the policies under the Biden administration were
00:24:43
doing the opposite of all those things. But again, you have to go back to what was driving that. And it was not driven
00:24:48
by this China hawk mentality. That is now a convenient rebranding. It was driven by this EA ideology, this
00:24:56
doomerism. And so this is why I'm talking about it is I want to expose it because I think a lot of people on the
00:25:02
Republican side don't realize where the ideology is really coming from and who's
00:25:06
funding it. They're obviously Trump haters and they need to be lumored quite frankly
00:25:14
when we look at they do they need to be lumored. I mean, you know, Freberg, I want I want to come back around again
00:25:20
cuz I respect your opinion on, you know, how close we are to turning certain corners, especially in science. So, I
00:25:29
understand big picture you believe that the opportunity will be there. Hey, we got people out of fields, you know, in
00:25:35
the agricultural revolution, we put them into factories, industrial revolution, then we went to this information
00:25:39
revolution. So, your position is we will have a similar transition and it'll be okay.
00:25:46
But do you not believe that the speed because we've talked about this privately and and publicly on the pod
00:25:53
that this speed the velocity at which these changes are occurring you would agree are faster than the industrial
00:25:59
revolution much faster than the information revolution. So let's one more time talk about job displacement
00:26:05
and I think the real concern here for a group of people who are buying into this
00:26:09
ideology is specifically unions job displacement. This is something the EU cares about. This is something the Biden
00:26:16
administration cares about. If truck drivers lose their jobs, just like we went to bat previously for coal miners,
00:26:23
and there were only 75,000 or 150,000 in the country at the time, but it became the national dialogue. Oh my god, the
00:26:28
the the coal miners. How fast is this going to happen? One more time on drivers specifically. Okay, coders, you think
00:26:36
there'll be more code to write, but driving, there's not going to be more driving to be done. So is this time
00:26:42
different in terms of the velocity of the change and the job displacement in your mind? Freedber the velocity is
00:26:49
greater but the benefit will be faster. So the benefit of the industrial revolution which ultimately drove lower
00:26:55
price products and broader availability of products through manufacturing was one of the key outputs of that
00:27:01
revolution. Meaning that we created a consumer market that largely didn't exist prior. Remember prior to the
00:27:07
industrial revolution, if you wanted to buy a table or some clothes, they were handmade. They were kind of artisal.
00:27:13
Suddenly, the industrial revolution unlocked the ability to massproduce things in factories. And that dropped
00:27:18
the cost and the availability and the abundance of things that everyone wanted to have access to, but they otherwise
00:27:24
wouldn't have been able to afford. So suddenly everyone could go and buy blankets and clothes and canned food and
00:27:31
all of these incredible things that started to come out of this industrial revolution that happened at the time.
00:27:36
And I think that folks are underestimating and underrealizing the benefits at this stage of what's going
00:27:41
to come out of the AI revolution and how it's ultimately going to benefit people's um availability of products,
00:27:48
cost of goods, access to things. So the counterbalancing force Jcal is deflationary which is um let's assume
00:27:55
that the cost of everything comes down by half. That's a huge relief on people's need to work 60 hours a week.
00:28:04
Suddenly you only need to work 30 hours a week and you can have the same lifestyle or perhaps even a better
00:28:10
lifestyle than you have today. So the counterargument to your point, and I'll talk about the pace of change in
00:28:16
specific jobs in a moment, but the counterargument to your point is that there's going to be this cost reduction
00:28:23
and abundance that doesn't exist today. Give an example. Let's give like some examples that we could see automation
00:28:30
and food prep. So we're seeing a lot of restaurants install robotic systems to make food and people are like, "Oh, job
00:28:36
loss, job loss." But let me just give you the counter side. The counter side is that the cost of your food drops in
00:28:41
half. So suddenly, you know, all the labor cost that's built into making the stuff you want to pick up, everyone's
00:28:46
freaking out right now about inflation. Oh my god, it's $8 for a cup of coffee. It's $8 for a latte. This is crazy,
00:28:51
crazy, crazy. What if that dropped down to two bucks? You're going to be like, man, this is pretty awesome with good
00:28:55
service and good experience. And don't make it all dystopian, but suddenly there's going to be this like incredible
00:29:01
reduction or deflationary effect in the cost of food. And we're already starting
00:29:04
to see automation play it way in the food system to bring inflation down. And that's going to be very powerful for
00:29:09
people. Shout out to uh ita cloud cushions and cafe X. We all took swings at the bat at that exact concept is that
00:29:15
it could be done better, cheaper, faster. One of the amazing things of these vision action models that are now
00:29:21
being employed is you can rapidly learn using vision systems and then deploy automation systems in those sorts of
00:29:28
environments where you have a lot of kind of repetitive tasks that the system can be trained and installed in a matter
00:29:34
of weeks. And historically that would have been a whole startup that it would have taken years to figure out how to
00:29:38
get all these things together and custom program it, custom code it. So the flip
00:29:41
side is like when Uber hit those people were not drivers. Think about the jobs that all those people had prior to Uber
00:29:47
coming to market. And then the reason they drove for Uber is they could make more money driving for Uber or now
00:29:52
driving or Door Dash and the flexibility. So their lifestyle got better. They had all of this more
00:29:57
control in their life. Their incomes went up. And so there's a series of things that you are correct won't make
00:30:04
sense in the future from a kind of standard of work perspective. But the right way to think about it is
00:30:10
opportunity gets created. New jobs emerge, new industry, new income, costs go down. And so I keep harping on this
00:30:17
that it's really hard today to be very prescriptive to Sax's point about what exactly is around the corner. But it is
00:30:24
an almost certainty that what is around the corner is more capital will be deployed. That means the economy grows.
00:30:30
That means there's a faster deployment of growth of new jobs, new opportunities for people to make more money, to be
00:30:35
happier in the work that they do. And the flip side being things are going to get cheaper. So, I mean, I know we're
00:30:40
waxing philosophical here, but I think it's really key because you can focus on the one side of the coin and miss the
00:30:46
whole other. And that's what a lot of journalist commentators and fearongerers do is they miss that other side. Got it.
00:30:53
Well said, Freeberg. Well said. I think I've heard Satcha turn this question around about job loss saying well do you
00:31:00
believe that GDP is going to grow by 10% a year because what are we talking about
00:31:05
here I in order to have the kind of disruption that you're talking about where I don't know 10 to 20% of
00:31:12
knowledge workers end up losing their jobs AI is going to have to be such a profound force that it's going to have
00:31:17
to create GDP growth like we've never seen before. That's right. So, it's easier for people to say, "Oh, well, 20%
00:31:23
of people are going to lose their jobs." But wait, are we we're talking about a world in where the economy is growing
00:31:26
10% every year. Like, do do you actually believe that's more income? That's more
00:31:30
income for everyone. That's new jobs being created. It's an inevitability. We've seen this in every revolution. You
00:31:36
know, prior to the industrial revolution, 60% of Americans worked in agriculture. And when the tractor came
00:31:41
around and factories came around, those folks got to get out of doing manual labor in the fields where they were
00:31:46
literally, you know, tilling the fields by hand. and they got to go work in a factory where they didn't have to do
00:31:52
manual labor to move things. Yeah, they did things in the factory with their hands, but it wasn't about grunt work in
00:31:58
the field all day in the sun. And it became a better standard of living. It became new jobs. And today, it became a
00:32:03
5day work week. It went from a 7day 7day work week to five, 100 hours a week to 45, 50 hours a week. And now I think the
00:32:11
next phase is we're going to end up in less than 30 hours a week with people making more money and having more
00:32:16
abundance for every dollar that they earn with respect to what they can purchase and the lives they can live.
00:32:21
That means more time with your family, more time with your friends, more time to explore interesting opportunities.
00:32:26
So, you know, we've been through this conversation a number of times. I I know I'm not No, it's important to bring it
00:32:30
up, I think, and and really unpack it because the fear is peing now, Sachs. People are using this moment in time to
00:32:37
scare people that hey the jobs are going to go away and they won't come back. But
00:32:41
what we're seeing on the ground saxs is I'm seeing many more startups getting created and able to accomplish more
00:32:48
tasks and hit a higher revenue per employee than they did in the last two cycles. So it used to be you know you
00:32:54
try to get to a quarter million in revenue per employee than 500. Now we're regularly seeing startups hit a million
00:32:58
dollars in revenue per employee, something that was rarified air previously, which then speaks to your
00:33:03
point, Freeberg, that there'll be more abundance. There'll be more capital generated, more more capital deployed,
00:33:10
with more capital deployed for more opportunities, but you're going to need to be more resilient. I think yeah, I
00:33:15
think it's actually very hard to completely eliminate a human job. the the ones that you cited and JK you keep
00:33:23
citing the same ones because I actually don't think there's that many that fit in this category the drivers and maybe
00:33:28
level one customer support because those jobs are so monolithic but when you think about even like what a salesperson
00:33:34
does right it's like yes they spend a lot of time with prospects but they also spend time negotiating contracts and
00:33:40
they spend time doing postale implementation and follow-up and they spend time learning the product and
00:33:46
giving feedback I mean it's a multifaceted job and you can use AI I to automate pieces of it, but to eliminate
00:33:53
the whole job is actually very hard. And so I just think this idea that boom, 20%
00:33:58
of the workforce is going to be unemployed in two years. I just don't think that it's going to work that way.
00:34:03
But look, if there is widespread job disruption, then obviously the government's going to have to react and
00:34:08
we're going to be in a very different societal order. But my point is, you want the government to start reacting
00:34:14
now before this actually happens. We don't need to be precogs and predict it. Yeah. It's a total power grab. It's a
00:34:20
total power grab to give the government and these organizations more power before the risk is even manifested. And
00:34:27
let me say this as well with respect to all these regulations that were created,
00:34:30
the 100page by NEO and the 200page diffusion rule, none of these regulations solve the excess problem.
00:34:37
None of these things actually would prevent the most existential risk that we're talking about. They don't solve
00:34:43
for alignment. They don't sign for the kill switch. None of that. Yeah. If someone actually figures out how to
00:34:47
solve that problem, I'm all ears. You know, look, I'm not cavalier about these risks. I understand that they exist, but
00:34:54
I'm not in favor of the fear-mongering. I'm not in favor of giving all this power to the government before you even
00:34:59
know how to solve these problems. Shimath, you did a tweet about entry-level jobs being toast. So, I
00:35:06
think there is a nuance here. Uh, and both parties could be correct. I think the job destruction is happening as we
00:35:12
speak. I'll just give what one example and then drop to you, Chimath. One job in startups that's not driving a car or
00:35:19
you know super entry level was people would hire consultants to do recruitment and to write job descriptions. Now I was
00:35:24
at a journal last night talking to a bunch of founders here in Singapore and I said how many people have used AI to
00:35:29
write a job description? Everybody's hand went up. I said how many of you with that job description was that job
00:35:34
description better than you could have written or any consultant? And they they all said yes 100% AI is better at that
00:35:39
job. That was a job a highlevel HR recruitment job or an aspect of it sack. So that was half the job, a third of the
00:35:47
job. To your point, the chores are being automated. So I do think we're going to
00:35:50
see entrylevel jobs. Shimoth, the ones that get people into an organization, maybe they're going away. And that was
00:35:58
that your point of your tweet, which we'll pull up right here. If a GPT is a glorified
00:36:03
autocomplete, how did we used to do glorified autocomplete in the past? It was with new grads. New grads were our
00:36:12
autocomplete. And to your point, the models are good enough that it effectively allows a person to rise in
00:36:20
their career without the need of new grad grist for the mill, so to speak. So, I think the reason why companies
00:36:28
aren't hiring nearly as many new grads is that the the folks that are already in a company can do more work with these
00:36:35
tools. And and I think that that's a very good thing. So you're generally going to see OPEX as a percentage of
00:36:41
revenue shrink naturally and you're going to generally see revenue per employee go up naturally but it's going
00:36:51
to create a tough job market for new grads in the established organizations. And so what should new grads do? They
00:36:58
should probably steep themselves in the tools and go to younger companies or start a company. I think that's the only
00:37:03
solution for them. Bingo. The most important thing for whether there are jobs available for new grads or not is
00:37:10
whether the economy is booming. So obviously in the wake of a financial crisis, the jobs dry up because
00:37:16
everyone's cost cutting and those jobs are the first ones to get cut. But if the economy is booming, then
00:37:23
there's going to be a lot more job creation. And so again, if AI is this driver and enabler of tremendous
00:37:30
productivity, that's going to be good for economic growth. And I think that that will lead to more company
00:37:34
formation, more company expansion at the same time that you're getting more productivity. Now, to give an example,
00:37:40
one of the things I see a lot discussed online about these coding assistants is that they make junior programmers much
00:37:48
better because, you know, if you're already like a 10x programmer, very experienced, you already knew how to do
00:37:54
everything. And you could argue that the people who benefit the most are the entry-level coders who are willing to
00:38:01
now embrace the new technology and it makes them much more productive. So in other words, it's a huge leveler and it
00:38:08
takes an entry-level coder and makes them 5x or 10x better. So look, this is an argument I see online. The point is
00:38:15
just I don't think we know how this cuts yet. I agree. And I just think there's like this this dumerism is premature and
00:38:21
it's not a coincidence that it's being funded and motivated by this hardcore ideological element. I'll tell you my
00:38:30
hiring experience. We have about 30 people at 8090 and the way that I have found it to work the best is you have
00:38:38
senior people act as mentors and then you have an overwhelming corpus of young very talented people who are AI native.
00:38:45
And if you don't find that mix, what you have instead are L7s from Google and Amazon and Meta who come to you with
00:38:55
extremely high salary demands and stock demands and they just don't thrive. And part of why they don't thrive is that
00:39:03
they push back on the tools and how you use them. They push back on all these things that the tools help you get to it
00:39:08
faster. M this is why I think it's so important for the young folks to just jump in with two feet and be AI native
00:39:14
from the jump because you're much more hirable frankly to the to the emergent company and the bigger companies you'll
00:39:22
have a lot of these folks that see the writing on the wall may not want to adapt as fast as otherwise. Another way
00:39:29
for example that you can measure this is if you look inside your company on the productivity lift of some of these
00:39:35
coding assistants for people as a distribution of age. What you'll see is the younger people leverage it way more
00:39:41
and have way more productivity than older folks. And I'm not saying that as an aegis comment. I'm saying that it's
00:39:46
an actual reflection of how people are reacting to these tools. What you're describing is a paradigm shift. It is a
00:39:52
big leap. Is you know it's like when I went to college, when I took computer science, it was object-oriented
00:39:58
programming. It was like C++. It was compiled languages. It was gnarly. It was nasty work. And then you had these
00:40:05
highle abstracted languages. And I used to remember at Facebook, I would just get so annoyed because I was like, why
00:40:10
is everybody using PHP and Python? This is like not even real. But I was one of these old lights who didn't understand
00:40:16
that I just had to take the leap. And what it did was it grew the top of the funnel of the number of developers by
00:40:22
10x. And as a result, what you had were all of these advancements for the internet. And I think what's happening
00:40:28
right now is akin to the same thing where you're going to grow the number of developers upstream by 10x. But in order
00:40:34
to embrace that, you just have to jump in with two feet. And if you're very rigid in how you think the job should be
00:40:40
done technically, I think you're just going to get left behind. Just a little interesting statistic there. Microsoft
00:40:46
announced 6,000 job layoffs, about 3% of their workforce, while putting up record
00:40:50
profits while being in incredible cash position. Total confirmation bias. It's like now every time there's a layoff
00:40:57
announcement, people try to tie it to AI to feed this doomer story. I don't think
00:41:01
that's an AI story. I well I actually think it I don't think it's an AI story. I think it is because the people they're
00:41:06
eliminating are management and I think the the management layer becomes less you're saying it was it was entry level
00:41:12
employees. Now you're saying it's management. This is total confirmation. I think those are no no I think those
00:41:16
are two areas that specifically get eliminated. Entry level it's too hard. It it's too hard to give them the grunt
00:41:22
work. And then for the managers who are old and I've been there for 20 years. Hold on. Let me finish. Th for those
00:41:27
people I think they are unnecessary in this new AI management. What are you talking about? What what is the AI agent
00:41:35
that's doing management right now in companies? Oh theory doesn't even make sense. Oh no it it totally does. There
00:41:41
are tools now that are telling you this is these are the most productive people in the organization. Shath just outlined
00:41:47
who's shipping the most etc. who's using the tools. And then people are saying, well, why do we have all these highly
00:41:53
priced people who are not actually shipping code who are LSAs? You're totally falling for some sort of
00:41:57
narrative here. This makes no sense. I don't think I am. Yeah, let me be very clear what I'm saying. What I am saying
00:42:04
is AI natives are extremely productive. They use these tools. They're very fil with them. I think it's very reductive,
00:42:12
but what you see is the older or more established in your career you are in technical roles, what I see is that it's
00:42:19
harder and harder for folks like that to embrace these tools in the same way. Now, how does it play out in terms
00:42:25
of jobs? I think that just these tools are good enough where the net new incremental taskoriented role that would
00:42:34
typically go to a new grad, a lot of that can be defayed by these models. That's what I'm saying very clear
00:42:40
specifically and I don't think that speaks to management. I agree with Sax. It doesn't do Sergey said Freeberg when
00:42:46
he came to uh our F1 that management would be the first thing to go. I was talking to some entrepreneurs last night
00:42:52
again here in Singapore and they are taking all the GitHub and and Jira cards and and things that have been submitted
00:42:58
plus all the Slack messages in their organization and they're putting them into an LLM and having it write
00:43:04
management reports of who is the most productive in the organization. And in the new version of Windows, it's
00:43:09
monitoring your entire desktop. Freeberg management is going to know who in the organization is actually doing work,
00:43:15
what work they're doing, and what the uh result of that work is through AI. That
00:43:20
is the future of management. And you take out all bias, all you know, loyalty, and the AI is going to do that.
00:43:27
Couldn't disagree with you more saxs on that, but Freeberg, you wanted to wrap somewhere on this point. My point is
00:43:32
that AI managers are not losing their job because AI is replacing them. I didn't say that AI wouldn't be a
00:43:39
valuable tool for managers to use. Sure, AI would be a great tool for managers, but we're not anywhere near the point
00:43:47
where managerial jobs are being eliminated because they're getting replaced by AI agents. We're still at
00:43:52
the chatbot stage of this. Literally, Sergey said he took their internal Slack, went into like a dev
00:43:58
conversation, and said, "Who are the underrated people in this organization who deserve a raise?" and it gave him
00:44:02
the right answer. So, wait, that doesn't allow you to cut 6,000 people. I think it's happening as we speak. It's just
00:44:07
not over. You You fell for this narrative. You grasped onto this Microsoft restructuring where they
00:44:14
eliminated 6,000 roles and you're trying to attribute that to AI now. I think it
00:44:18
has to do with AI. I think management is looking at it saying, "We are going to replace these positions with AI. We
00:44:23
might as well get rid of them now." It is in flux. We'll see who's right in the coming months. Can I make another
00:44:28
comment, Freick? wrap this up here so we can get on to the next topic. This is a
00:44:32
great topic. This is I want to make one last point which I think and Sax you may
00:44:37
not appreciate this so we can have a a healthy argument about this. I think in the same way that all of this jobs are
00:44:44
going to get lost to AI fear-mongering. There's a similar narrative that I think
00:44:48
is a false narrative around there's a race in AI that's underway between nation states. And the reason I think
00:44:56
it's false is if I asked you guys the question, who won the industrial revolution? The industrial revolution
00:45:01
benefited everyone around the world. There are factories and there's a continuous effort and continuous
00:45:06
improvements in manufacturing processes worldwide. That is a continuation of that revolution. Similar if I asked who
00:45:12
won the internet race, there were businesses built out of the US, businesses built out of China,
00:45:17
businesses built out of India and Europe that have all created value for shareholders, created value for
00:45:22
consumers, changed the world, etc. And I think the same is going to happen in AI.
00:45:26
I don't think that there's a finish line in AI. I think AI is a new paradigm of work, a new paradigm of productivity, a
00:45:34
new paradigm of business, of the economy, of livelihoods, of pretty much everything uh every interaction humans
00:45:41
have with ourselves and the world around us will have in its substrate AI and as
00:45:47
a result, I think it's going to be this continuous process of improvement. So, I'm not sure. Look, there there are
00:45:51
different models and you can look at the performance metrics of models, but you can get yourself spun up into a tizzy
00:45:56
over which model is ahead of the others. Which one's going to quote get to the finish line first? But I think at the
00:46:01
end of the day, the abundance and the economic prosperity that will arise from the continuous performance improvements
00:46:07
that come out of AI and AI development will benefit all nation states and actually could lead to a little bit more
00:46:13
of a less resource constrained world where we're all fighting over limited resources and there's nation state
00:46:19
definitions around who has access to what and perhaps more abundance which means more peace and uh less of this
00:46:25
kind of resourced world. your thought on the kumbaya theory exposed by Freeberg.
00:46:31
Yeah, exactly. Um I I'll partially agree in the sense that I don't think the AI race is a finite game. It's an infinite
00:46:39
game. I I agree that there's no finish line, but that doesn't mean there's not a race going on. So for example, an arms
00:46:46
race would be a classic example of a competition between countries to see who is stronger to basically amass power and
00:46:55
they might be neutralizing each other. The balance of power may stay in equilibrium even though both sides feel
00:47:00
the need to constantly uplevel their arms, their power. Yeah. And so I think that to use the the term that Mir
00:47:08
Shimemer used at the all-in summit, we are in an iron cage. The US and China are the two leading countries in the
00:47:14
world economically, militarily, technologically. They both care about their survival. The best way to ensure
00:47:22
your survival in a self-help world is by being the most powerful. And so these are great powers who care a lot about
00:47:31
the balance of power. And they will compete vigorously with each other to maintain the greatest balance of power
00:47:37
between them. and high-tech is a major dimension of that competition and within high-tech AI is the most important
00:47:43
field. So look, there is going to be an intense competition around AI. Now the question is how does that end up? I mean
00:47:50
it could end up in a tie or in it could end up in a situation where both countries benefit. Maybe open source
00:47:57
wins. Maybe neither side gains a decisive advantage. that they're absolutely going to compete because
00:48:03
neither one can afford to take the risk that the other one will develop a decisive advantage. Prisoners dilemma.
00:48:09
Nuclear proliferation is a good analogy. I would argue nuclear deterrence led to
00:48:13
a more peaceful world in the 20th century. I mean is that fair to say Sax that ultimately what happened with
00:48:18
nuclear is that the actual underlying technology hit you know an asmtote right it plateaued right and so we ended up in
00:48:26
a situation where in the case of the United States versus Soviet Union where both sides had enough nukes to blow up
00:48:32
the world many times over and there wasn't really that much more to innovate so you know the the the underlying
00:48:38
technological competition had ended the the dynamic was more stable and they were able to reach an arms control
00:48:44
framework to sort of control the arms race, right? I think AI is a little different. We're in a situation right
00:48:51
now where the technology is changing very very rapidly and it's potentially on some sort of exponential curve and so
00:48:58
therefore being a year ahead even 6 months ahead could result in a major advantage. I think under those
00:49:03
conditions both sides are going to feel the need to compete very vigorously. I don't think they can sign up. This is a
00:49:09
system of productivity right for an agreement to slow each other down. I just don't nuclear was not a system of
00:49:14
productivity. It was not a system of economic growth. It was a system of literally destruction. And this is quite
00:49:20
different. This is a system of making more with less which unleashes benefits to everyone in a way that perhaps should
00:49:27
be calming down the conflict in the potential. You got to admit that there's a there is a potential dual use here.
00:49:33
There's no question that the armies of the future are going to be drones and robots and they're going to be AI
00:49:37
powered. Yeah. And as long as that's the case, these countries are going to compete vigorously to have the best AI
00:49:42
and they're going to want their leaders or national champions or startups and so
00:49:47
forth to win the race. What's the worst case, Saxs, if if China wins the AI race? What is the worst case scenario?
00:49:54
Ask what it means first. Ask Sax. That's literally what I'm asking. Like what would that scenario be? Would they
00:49:59
invade America and they dominate us forever? What does it mean to citizen? Yeah. What does it mean to win? Yeah. To
00:50:06
me, it would mean that they achieve a decisive advantage in AI such that we can't leaprog them back. And an example
00:50:14
of this might be something like 5G where Huawei somehow leaprogged us, got to 5G
00:50:20
first and disseminated it through the world. They weren't concerned about diffusion. They were interested in
00:50:26
promulgating their technology throughout the world. If the Chinese win AI, they will sell more products and services
00:50:32
around the globe than the US. This is where we have to change our mindset towards diffusion. I would define
00:50:37
winning as the whole world consolidates around the American tech stack. They use
00:50:42
American hardware in data centers that again are are fundamentally powered by American technology. And you know just
00:50:49
look at market share. Okay? If we have like 80 to 90% market share that's winning. If they have 80% market share
00:50:55
then we're in big trouble. So it's very simple. It means like yeah but if the market grows up by 10x it doesn't matter
00:51:02
because the world will have every individual in every country will now have more they will have a more
00:51:06
prosperous life and as a result it's not necessarily the framing about if we don't get there first we are necessarily
00:51:13
going to lose I get that there's an edge case of conflict or what have you but I
00:51:17
do think that there's a net benefit where the whole world suddenly is in this more prosperous state and this is a
00:51:23
classic example of a dual use technology where there are both economic benefits and there are military benefits. Yes,
00:51:30
GPS would come to mind in this example, right? Like my summary point is just that it's not all about a losing game
00:51:37
with respect to this quote race with other nation states. But at the end of the day, yes, there is risk, but I do
00:51:44
think that if the the pace of improvement stays on track like it is right now, holy [ __ ] I think we're in a
00:51:50
pretty good place. That's just my point. Okay. Some positivity. Okay. Look, I I hope that the AI race stays entirely
00:51:56
positive and it's a healthy competition between nations and the competition spurs them on to develop more prosperity
00:52:02
for their citizens. But as we talked about in the AI summit, there's two ways of looking at the world. There's kind of
00:52:08
the economist way that Jeffrey Saxs was talking about and then there's the balance of power way or realist way
00:52:13
which Mir Shmer was talking about. And when economic prosperity and survival or balance of power come into conflict,
00:52:24
it's the realest view of the world that it's the balance of power that gets privileged. And I just think that's the
00:52:29
way that governments operate is that prosperity is incredibly important. We want economic success, but power is
00:52:37
ultimately privileged over that. And this is why we're going to compete vigorously in high-tech. That's why
00:52:42
there is going to be an AI race. Okay, perfect segue. We should talk a little bit about what was the topic of
00:52:48
discussion yesterday. I had a lunch with a bunch of family offices and capital allocators uh government folks here in
00:52:54
Singapore and they were talking about our discussion last week about the big beautiful bill and the debt here in the
00:53:02
United States. It's permeating everywhere. The two conversations at every stop I've made here is the big
00:53:09
beautiful bill and the balance sheet of the United States as well as tariffs. So, we need to maybe revisit our
00:53:16
discussion last week. Chimath, you had uh and Freeberg did a an impromptu call with Ron Johnson over the weekend, which
00:53:23
then spurred him going on 20 other podcasts to talk about this. Steven Miller from the administration has been
00:53:30
tweeting some corrections or his perceived corrections about the bill. And Sax, uh, I think you've also started
00:53:37
tweeting this. Where do we want to start? Maybe. Well, I think there are just a couple of facts that should be
00:53:43
cleaned up because Okay, so facts from the administration, their view of our discussion. Well, even though I was
00:53:50
defending the bill last week on the whole, I wasn't saying it was perfect. I was just saying it was better than the
00:53:54
status quo. Yeah, you were clear about that. Yeah. Yeah. But even even I in doing that was conceding some points
00:54:01
that I think were just factually wrong. And the big one was that I said I was disappointed that Doge the Doge cuts
00:54:07
weren't included in the big beautiful bill. What Steven Miller has pointed out is that reconciliation bills can only
00:54:14
deal with what's called mandatory spending. They can't deal with what's called discretionary spending. And since
00:54:19
the Doge cuts apply to discretionary spending, they just can't be dealt with in a reconciliation bill. They have to
00:54:24
be dealt with separately. There can be a separate recision bill that comes up, but it can't be dealt with in this bill.
00:54:30
And just to be very clear, look, if the Doge cuts don't happen through recision,
00:54:34
I'm going to be very disappointed in that. I really want the Doge cuts to happen, but it's just a fact that the
00:54:40
Doge cuts cannot happen in the big beautiful bill. It's not that kind of bill. And I think it's therefore wrong
00:54:46
to blame big beautiful bill for not containing Doge cuts when the Senate rules don't allow that. You know, it all
00:54:52
goes back to the the Bird rules. There are only specific things that can be dealt with through reconciliation, which
00:54:59
is this 50 vote threshold, and it has to be quote unquote mandatory spending. discretionary cuts are dealt with in
00:55:05
annual appropriations bills that require 60 votes. Now look, this is kind of a crazy system. I don't know exactly how
00:55:11
it evolved. I guess Robert Bird is the one who came up with all this stuff and maybe they need to change the system,
00:55:16
but it's just wrong to blame the big beautiful bill for not containing the Doge cuts. That's just a fact. Okay, so
00:55:21
the other thing is that the BBB does actually cut spending. It's just not scored that way because when the
00:55:29
bill removes the sunset provision from the 2017 tax cuts, the CBO ends up scoring that as effectively a spending
00:55:37
increase. But tax rates are simply continuing at their current level. In other words, at this year's level. So if
00:55:45
you used the current year as your baseline, okay, and then compared it to spending next year, it would score as a
00:55:54
cut in spending. So it's just not it's not correct to say this bill increases spending. It does actually result in a
00:56:01
mandatory spending cut, but it's not getting credit for that because we're continuing the tax rates at the current
00:56:09
year's rates. Do you believe Sachs that this administration which you are part of in four years will have spent will
00:56:17
have balanced the budget. Will it have reduced the deficit or will the deficit continue to grow at 2 trillion a year?
00:56:24
What is your belief because there's a lot of strategies going on here. Yeah. My my belief is that President Trump
00:56:29
came into office inheriting a terrible fiscal situation. I mean basically that he created and that Biden created. They
00:56:36
both put 8 trillion. They both put 8 trillion on the debt. It's a big difference. It's a big difference to add
00:56:41
to the deficit when you're in the emergency phase of CO for that. Sure. It's emergency
00:56:48
spending. It was never supposed to be permanent and then somehow Biden made it permanent and he wanted a lot more.
00:56:52
Remember build back better? He wanted a lot more. So, you know, it's it's tough when you come into office with a what is
00:56:59
$2 trillion annual deficit. So, to my original question, now look, hold on. Would I like to see the deficit
00:57:04
eliminated in one year? Yeah, absolutely. But there's just not the votes for that. Well, I asked you for
00:57:09
there's a one vote margin here in the House and the Democrats aren't cooperating in any way. So, I think that
00:57:15
the administration is getting the most done that it can. This is a mandatory spending cut and I think the Doge cuts
00:57:23
will be dealt with hopefully through recision in a subsequent bill. I'm asking you about four years from now.
00:57:28
Will we be sitting here in four years? Will Trump have cut spending by the end of this term? In another three and a
00:57:34
half years, will we be looking at a balanced budget? potentially is that the goal of the administration or will we be
00:57:41
at 42 44 45 trillion at the end of Trump's second term? David said, listen, if you want that level of specificity,
00:57:48
you're going to have to get Scott Besson on. Okay, this is just not my area. I'm
00:57:51
not going to pretend to have that level of detailed answers. But what I believe is that the Trump administration's
00:57:56
policy is to spur growth. I think that these tax policies will spur growth. I think that AI will also be a huge
00:58:04
tailwind. It'll be a productivity boost. I think let's stop being doomers about it. We need that productivity boost and
00:58:10
I think that the net result of those things will be to improve the fiscal situation. Do I want more spending cuts?
00:58:16
Yeah, but look, we're getting more than was represented last week. Let's put it that way. Okay, fair enough. Sax, thank
00:58:21
you for the cleanup there. Chimath, our bestie Elon was on the Sunday shows and he said, "Hey, the bill can be big or it
00:58:28
can be beautiful. It can't be both." He seems to be, I'll say, displeased or maybe not as optimistic about balancing
00:58:36
the budget and and getting spending under control, but he he still believes in Doge, obviously, and and and hopefully
00:58:43
Doge continues. You seemed a little bit concerned last week. A week's passed. You've heard some of Steven Miller's
00:58:51
opinions. Where do where do you net out seven days from our big beautiful budget
00:58:55
bill debate last week, a week later? Well, I mean, I think Steven's critique of how the media summarized the reaction to
00:59:06
the bill is accurate. And I think it's probably useful to double click into one thing that Saxs
00:59:13
didn't mention, but that Steven did. A lot of this pivots around the CBO, which is the Congressional Budget Office, and
00:59:19
how they look at these bills, and there's a lot of issues with how they do it. In one specific case, which Sax just
00:59:30
mentioned and Stephen talked about, is that they have these arcane rules about the way that they score things. And what
00:59:38
they were assuming is that the tax rates would flip back to what they were before the first
00:59:48
Trump tax cuts, which obviously would be higher than where they are today. What that would mean in their financial model
00:59:58
is we were going to get all that money now to maintain the tax cuts where we are. They now then would look at that
01:00:05
and say, "Oh, hold on. That's a loss of revenue. Why are all of these things important?"
01:00:11
I downloaded the CBO model, went through it, and what I would say is at best it's
01:00:17
Spartan, which means that I don't think a financial analyst or somebody that controls a lot of money will actually
01:00:25
put a lot of stock in their model. I think what you'll have happen is people will build their own versions bottoms
01:00:32
up. Do you trust it, the the CBO's version of this, or do you largely trust it? I don't think the CBO really knows
01:00:38
what's going on to be totally honest with you. Okay. I think that there are parts of what they do which they're also
01:00:45
opaque on. Nick, I sent you a tweet from Goldman Sachs. So, here is what Goldman
01:00:52
put out. Now, the point is when you build a model, what you're trying to do is net out all of these bars, okay?
01:00:58
You're trying to add the positive bars and the negative bars, and you figure out what is the total number at the end
01:01:02
of it. Now, in order to do that, when you see the bars on the far right, that's a 20 $34. That's very different
01:01:09
than a 20 $25. The CBO doesn't disclose how they deal with that. They don't dis disclose the discount rate. So you can
01:01:17
question what that is. The CBO makes these assumptions that, you know, as Steven pointed out, are very brittle
01:01:22
with respect to the tax plan. That's not factored in here. So those are the issues with the way the CBO scores it.
01:01:30
So you have to do it yourself. Now, Peter Navaro published an article which I think is probably the most pivotal
01:01:36
article about this whole topic. Peter of tariff fame. Yeah. Yeah. Here I think he nails it right in the bullseye,
01:01:44
which is the bond market needs to make a decision on one very critical assumption
01:01:51
when they build their own model. Okay, so let's ignore the CBO's kind of brittle math and the Excel
01:01:58
that they post on their website. People are going to do their own because they're talking about managing their own
01:02:02
money. But Navaro basically points to the critical thing which is listen those CBO assumptions also include a fatal
01:02:09
error which is they assume these very low levels of GDP. What you're probably going to see
01:02:16
in Q2 is a really hot GDP print. If I'm a betting man, which I am, I think the GDP prints going to come in above three.
01:02:24
Not quite four, but above three. And so what Peter is saying here is, hey guys, like you're estimating 1.7% GDP. why
01:02:32
don't you assume 2.2 two or why don't you assume 2.7 or any number or really what he's saying is why don't you build
01:02:39
a sensitivity so that you can see the implications of that and I think that that is a very important point okay so
01:02:46
where do I net out a week later Jason it's pretty much summarized in the tweet that I posted earlier today so over the
01:02:56
last week as people have digested it I think that there are small actors in this play and big actors the biggest
01:03:02
actor is obviously President President Trump. But the second biggest actor is the long end of the bond market. These
01:03:07
are the central bankers, the long bond holders, and these macro hedge funds. Why? Because they will ultimately
01:03:13
determine the United States's cost of capital. How expensive will it be to finance our deficits irrespective of
01:03:20
whatever the number is. It could be a dollar or it could be a trillion dollars. That doesn't matter right now.
01:03:25
The point is what is going to be our cost of capital? And what's happened over the last little while is that
01:03:32
they've steepened the curve and they've made it more expensive for us to borrow money. That's just the fact. So how do
01:03:40
we get in front of this? I think the most important thing if you think about what Peter Navaro said is this plan and
01:03:48
the bill can work if we get the GDP right. Okay. So how do you get the GDP right? And this is where I have one very
01:03:59
narrow set of things that I think we need to improve. And the specific thing that I'll go back to is today
01:04:05
America is at a supply demand tradeoff on the energy side. What does that mean? We literally consume every single bit of
01:04:14
energy that we make. We don't have slack in the system. We are growing our energy
01:04:22
demands on average about 3% a year. So I think the most critical thing we need to do is to make sure the energy
01:04:31
markets stay robust. Meaning there's a lot of investment that people are making. On Tuesday I announced a deal
01:04:40
that I did building a 1 gawatt data center in Arizona. This is a lot of money. This is little old me. But there
01:04:46
are lots of people ripping in huge huge huge checks, hundreds of billions of dollars. I think the sole focus has to
01:04:52
be to make sure that the energy policy of America is robust and it keeps all the electrons online. If there's any
01:05:00
contraction, I think it'll hit the GDP number because we won't have the energy we need and that's where things start to
01:05:07
get a little funky. So, I think where I am is I think President Trump should get
01:05:11
what he wants. I think the bill can work narrowly address the energy provisions and I think we live to fight another
01:05:18
day. So Freiriededberg cynical approach might be we're working the refs here. The CBO is
01:05:24
not taking into GDP. This GDP has a magical unicorn in it. AI and energy is going to spur this amazing growth. But
01:05:33
the bond markets don't believe it either. So, are we looking at just a GOP, a party, I'll put the
01:05:41
administration aside, that is just as recklessly spending as the Democrats, and they want to change the formula by
01:05:48
which they're judged in the future, that there's going to be magically all this growth and growth solves all problems.
01:05:54
And what we really need to do to your point I think two weeks ago that this is just disgraceful to put up this much
01:06:00
spending and we have to have austerity and we need to increase uh maybe the discipline in the country and both
01:06:06
parties have to be part of that. I'm asking you uh from the cynical perspective maybe to represent or steal
01:06:11
me on the other side here. We had a conversation with Senator Ron Johnson after we recorded the pod last
01:06:19
week and he was very clear in a key point which is that this bill addresses mandatory spending. Just to give you a
01:06:29
sense 70% of our federal budget is mandatory spending. 30% falls into that discretionary category. The mandatory
01:06:37
spending is composed of the interest on the debt which is now well over a trillion dollars a year on its way to a
01:06:43
trillion five almost a trillion a year. Medicare, Medicaid, Social Security and some other income security programs. And
01:06:50
as Ron Johnson shared with us over the years more and more programs have been put into the mandatory spending category
01:06:57
and so you can get past the filibustering in the Senate to be able to get budget adjustments done. The key
01:07:04
thing he's focused on and Rand Paul is focused on and I've talked about is the spending level of our mandatory
01:07:10
programs. The big beautiful bill proposes a roughly $70 billion per year cut in Medicaid. Okay, and that sounds
01:07:19
awful. How could you do that to people? In 2019, the year before COVID, Medicaid
01:07:25
spending was $627 billion. 2024 it was 914 billion. So the $70 billion cut gets you down to 840. You're still roughly
01:07:35
call it 40% above where you were in 2019. So is that the right level? And fundamentally the opportunity to cut
01:07:43
those mandatory programs, which I know sounds awful, to cut Social Security and cut Medicaid, but the reality is they're
01:07:48
not just being cut from a low level. They're being cut from a level that's 60 plus% higher than they were in 2019. And
01:07:57
I gave you another example which is the SNAP program, the food stamp program. Again, uh $15 billion of the 120 a year
01:08:05
that we spend on food stamps is being used to buy soda and a whole another chunk of that 120 is being used to buy
01:08:11
other junk food. So that they have proposed in this bill to cut SNAP down to 90 and it was 60 in 2019. So it's
01:08:19
still 50% above where it was in 2019. So the key point that's being made by Ron Johnson and others is that the spending
01:08:27
on these mandatory programs which account for nearly threequarters of our federal budget are still very elevated
01:08:33
relative to where we were in 2019. And we are not going to get out of our deficit barring a massive increase in
01:08:39
GDP without changes to the spending level. Now I don't put the blame on the White House. This bill passed with one
01:08:47
vote in the House. One vote. And so a key point to note, and I've said this from day one, and every time I've gone
01:08:54
to DC and every time we've talked about Doge, I've said there's no way any of this stuff's going to change without
01:08:59
legislative action from the Congress. And here we are seeing Congress, for whatever reason, you can listen to Ron
01:09:05
Johnson. You can listen to Rand Paul. You can listen to others say, you know what, we can't cut that deep. It is
01:09:10
going to be too harmful to our constituents. We need to keep the programs at their current levels or make
01:09:17
no changes at all or only modest changes. And that's where we are. That's the reality. Now, I do think that Navaro
01:09:23
did an excellent job in his op-ed for whatever criticism we may want to lay on Navaro for many other things. He pointed
01:09:29
out that the CBO projections in 2017 for the next year's GDP growth numbers was 1.8 to 2% and it actually came in at
01:09:38
2.9%. a full one point higher because of the tax and jobs act that was passed by
01:09:43
the Trump administration in 2017. So the additional money that goes into investments because lower taxes are
01:09:50
being paid fueled GDP growth. This is what some people call trickle down economics. People ridicule it. They say
01:09:56
it doesn't work. It's not real. But in this particular instance, they cut taxes and the GDP grew much faster than was
01:10:03
projected or estimated by the economists at the CBO. So the argument that's being
01:10:07
made is that we are not capturing many of the upsides in the GDP numbers that are being projected. And I will be
01:10:15
honest about this. I don't think anyone knows how much the GDP is going to grow.
01:10:21
We don't know the economic benefit and effects of AI. We don't know the economic benefits and effects of the
01:10:29
work that's being done to deregulate. Another key point which is not talked about by Navaro or anywhere else.
01:10:34
There's a broad effort to deregulate standing up new energy systems, deregulate industry and pharma,
01:10:42
deregulate banking. Besson talked about this in our interview with him. All of those deregulatory actions theoretically
01:10:49
should drive more investment dollars because if you can get a biotech drug to market in 5 years instead of 10, you'll
01:10:55
invest more in developing new biotech drugs. If you can stand up a new nuclear reactor in seven years instead of 30,
01:11:01
you'll build more nuclear reactors. Money will flow. if you can um get a new factory working because it's a lot
01:11:08
easier and faster to to build the factory and cheaper, you'll build more factories and production will go up.
01:11:13
People were really taken, by the way, by your comment that you would shut up about the deficit if we had like a
01:11:19
really great energy policy. We were dumping a lot on top of it. I want to build on the point that both Jamatha and
01:11:25
Freeberg made about growth rates. So, there's a very important chart here from Fred. This is the Federal Reserve St.
01:11:31
Louis. This is Federal Receipts. So basically it's federal tax revenue as a percent of GDP and this goes all the way
01:11:38
back to you know the 1930s 1940s. So if you look in the postWorld War II period you can see just eyeballing it that
01:11:47
there's a lot of variation around this but the line is around 17.5% plus or minus 2%. And the
01:11:54
interesting thing is that this chart reflects radically different tax rates. So, for example, during some of these
01:12:04
periods, we've had 90% top marginal tax rates. We've had 70% top top marginal tax rates. So, yeah, under Jimmy Carter,
01:12:11
the top marginal tax rate was, I think, 70%. We've had tax rates, you know, under
01:12:18
Reagan or Clinton in the 20s. So, the point is that the the tax rate that you have and what you actually collect as a
01:12:26
percent of GDP don't correlate. The most important thing by far is just how the economy is doing. If you look at the top
01:12:33
tick, it's around 2000 there. If you just mouse over it, 1999 to 2000. Yeah. Yeah. We get like just under 20% of
01:12:40
federal receipts% of GDP and tax rates were quite low back then. The reason why is we had an economic boom. So look, the
01:12:47
point is the most important thing in terms of tax revenue is having a good economy. And this is why you don't just
01:12:54
want to have very high tax rates because they clobber your economy. So this point
01:12:58
that Navaro was making in that article, it actually makes sense. I mean 1.7% is a pretty tepid growth assumption, we
01:13:06
should be able to grow a lot faster. And if we have a favorable tax policy, you can grow a lot faster. Now, if you go to
01:13:13
spending, can you pull up the Fred chart on spending? What you see here is that I
01:13:17
mean it's been kind of going up but let's say that since the 19 mid1970s or so federal net outlays as a percent of
01:13:24
GDP so basically spending was around 20% of GDP and then what happened is during
01:13:29
co it went crazy went all the way up to 30% and now it's back down to you know low 20s but it's still not back down to
01:13:36
20 and what we need to do is grow the economy we have to grow GDP to the point where federal net outlays are back
01:13:44
around 20%. If you could get tax revenue to the historical mean of around 17.5% or 17%, you get spending to 20%, then
01:13:53
you have a budget deficit of 3% which is much more tolerable. And I think that's
01:13:57
best target under his 33 plan, right? Is you get GDP growth back up to 3% and you
01:14:03
get the budget deficit down to 3%. All right, Chimat, you had some charts you wanted to share. Well, I think what's
01:14:10
amazing is if you take last week and now again this week, we're all converging on
01:14:15
the same thing. The path out of this is through GDP growth. And I just want everybody to
01:14:26
understand where we are. And this is without judgment. This is just the facts. What this chart shows in gray is
01:14:34
the total supply of power in the United States and the blue line is the utilization. So what you build for is
01:14:48
what you think is a premium above the demand, right? You'd say if there's one unit of demand, let's have 1.2 units of
01:14:54
supply, we'll be okay. But as it turns out, historically in the United States, we've had these cycles where we didn't
01:15:02
really know what the demand curve would look like. And so over the last number of years, we've stopped really building
01:15:11
supply in power. But what happened with things like AI and all of these other things is
01:15:16
that the demand just continued to spike. And so what this chart shows is we are at a standstill sitting here today in
01:15:24
2025. On margin we're actually short power which is to say sometimes there are brownouts sometimes there is lack of
01:15:32
power because we didn't add enough capacity. So that's where we are today. So then we talk about all of these new
01:15:39
kinds of energy and this is just meant to ground us in the facts. If you tried to turn on a project
01:15:47
today sitting here in May of 2025, here's what the timelines are. We all talk about
01:15:55
SMRs, small modular reactors. The reality is that if you get everything permitted and you believe the
01:16:04
technology can be derisked, you're still in a 2035 plus time frame. You're a decade away.
01:16:10
If you have an unplanned NAT gas plant today, the fastest you could get that on is four years from now. If we tried to
01:16:18
restart a mothball nuclear reactor, of which there are only three we can restart, that's a 20 27 to 2030 time
01:16:28
frame. So, let's give us the benefit of the doubt. That's 2 years away. If we needed to plan Nat gas plant, there's
01:16:35
already 24 gawatt in the queue which can't get turned on. So where does this end up? And this is where I think we
01:16:42
need to strip away all the partisanship and understand what we're dealing with. We have ready supply of renewable and
01:16:51
storage options today. It's the fastest thing that you can turn on. It allows us to turn on
01:16:58
supply to meet the demand and utilization. So I just think it's important to understand that we must not
01:17:05
lose energy. We cannot lose the energy market because that is the critical driver of all the GDP. All right. Nepon
01:17:11
steel and the US steel merger got cleared by President Trump. This was something that was being blocked by
01:17:17
Biden obviously for national security reasons. Nepon is going to acquire steel for 14.9 billion. Biden blocked that as
01:17:24
we had discussed. On Friday, Trump cleared the deal to go through calling it a partnership that will create 70,000
01:17:30
jobs in the US. And on Sunday, Trump called the deal an investment sync. It's a partial ownership, but it will be
01:17:35
controlled by the USA. Chim, there seems to be uh a reframing of this deal and that the United States is going to
01:17:43
benefit from it, but it's not a sale. Let's set some context. The United States is always on the wrong side of
01:17:49
these deals. Okay? We've been on the wrong side for 20 years. Meaning, we show up when an asset is stranded
01:17:56
or completely run into the ground. For example, we did the auto bailouts at the end of the great financial crisis. If
01:18:05
it's not a company and there's toxic assets, we set up something called TARP. What do we get? Not much in return. In
01:18:12
this, it's the opposite. And I think that this strategy has worked for many other countries
01:18:19
really well. So if you look at Brazil, companies like Embraer and Valet, which are really big Brazilian
01:18:26
national champions, have a partnership, a pretty tight coupling with the Brazilian government. The Brazilians
01:18:31
have a golden vote. If you look inside of the UK, there's a bunch of aerospace and defense companies, including
01:18:37
Rolls-Royce, that have a very tight coupling with the UK government. They have a golden vote. If you look in
01:18:43
China, companies like Bite Dance and CL have a very tight coupling with the Chinese government and the Chinese
01:18:52
government has a golden vote. And so what are all of those deals? Those deals are about companies that are thriving
01:18:58
and on the forward foot. And so I think this is a really important example of things that we need to copy. I've said
01:19:04
this before, but one part of China that I think we need to pay very close attention to is Hu Jin Tao in 2003 laid
01:19:12
out a plan and he said we are going to create 10 national champions in China in all the critical industries that are
01:19:18
going to matter for the next 50 years including things like batteries and rare earths and AI and they did it but for
01:19:25
those companies that allowed them to thrive and crush it and I think that we need to do that and compete with those
01:19:31
folks on an equal playing field. So in all industries or in very specific strategic ones because that would seem
01:19:37
like corrupting capitalism in free markets would be the steelman. Yeah, there's 10 industries that matter and
01:19:44
you steel is one. Okay. I think the precursors for pharmaceuticals are absolutely critical. Got it. I think AI
01:19:53
is absolutely critical. I think the upstream lithography and EV deposition and chipm capability absolutely
01:20:01
critical. I think batteries are absolutely critical and I think rare earths and the specialty chemical supply
01:20:09
chain absolutely critical. If you have those five, you are in control of your own destiny in the sense that you can
01:20:16
keep your citizens healthy and you can make all the stuff for the future. So I think if the president is creating a a
01:20:24
more expansive idea beyond US deal with this idea of US support, maybe there'll be preferred capital in the future to US
01:20:32
deal. But if he creates a category by category thing across five or six of these critical areas of the future, I
01:20:39
think it's super smart and we should do more of it. Sax, what do you think? interventionism, putting your thumb on
01:20:45
the scale, golden votes, a good idea for America in very narrow verticals or let
01:20:51
the free market decide. What are your thoughts on this golden vote, having a board seat, etc. Well, it depends what
01:20:58
the free market, so to speak, produced. And the reality is over the past 25 years is we exported a lot of this
01:21:04
manufacturing capacity to China. And I don't think it was a free market because they had all these advantages under the
01:21:09
WTO that we talked about on a previous podcast. they were able to subsidize their national champions while still
01:21:17
remaining compliant with the WTO rules because supposedly they were a developing country. It was totally
01:21:20
unfair. And what they would do is through these subsidies, they would allow these national champions to
01:21:27
essentially dump their products in the global market and drive everyone else out of business. They became the lowcost
01:21:31
producers. I think that as the president just said recently, not every industry has to be treated as strategic clothes
01:21:39
and toys. is we don't necessarily have to reshore in the United States but steel production is definitely strategic
01:21:45
steel aluminum and I'd say the rare earth we have to have that capacity we cannot be completely dependent on China
01:21:51
for our supply chain so some of these industries have to be reassured and if you need subsidies to do it I think that
01:21:57
you do it for national security reasons first and foremost there are other sense
01:22:01
yeah yeah there are other industries where the private market works just fine and what we need to do to help those
01:22:07
companies is simply not get in their Hey, with unnecessary red tape and regulations. So, I would say empower the
01:22:13
free market when America is the winner. And then in other areas where they're necessary for national security, then
01:22:21
you have to be willing to basically protect our industries. Freeberg, it seems like the great innovation here
01:22:26
might also be the American public getting upside. When we gave loans to Celindra and Tesla and Fiser and a bunch
01:22:35
of people for batterypowered, you know, energy under Obama, we just got paid back in some cases by Elon. Other people
01:22:42
defaulted, but we didn't get equity. What if we had instead of getting our 500 million back in the loan from from
01:22:47
Elon, which he paid back early and with interest, if we got half back and we got
01:22:51
half in equity, RSUs, whatever, stock options, warrants, this would be an incredible innovation. So, what are your
01:22:57
thoughts here? because people look to this podcast as, hey, the free market podcast, but this does seem to be a
01:23:03
notable exception here of maybe we should get involved and do these golden, you know, share votes, board seats, you
01:23:12
know, maybe more creative um structures in order to win faster. What are your thoughts, Reaper? I don't like it. I
01:23:20
don't like the government and markets. Keep the government out of the markets. It creates a slippery slope. First of
01:23:26
all, I think markets don't operate well if government's involved. It gets inefficient and that hurts consumers. It
01:23:32
hurts productivity. It hurts the economy. Second, I think it's a slippery slope. You do one thing. question
01:23:38
though. If government non-intervention results in all the steel production moving offshore, if it results in all
01:23:45
the rare earth processing and the rare earth magnet casting industries moving offshore, in fact, not just moving
01:23:54
offshore, but moving to an adversarial nation such that they can just switch off our supply chain for pretty much
01:24:02
every electric motor. Is that an outcome of the quoteunquote free market that we
01:24:06
should accept? Well, then I think that's where the government can play a role in
01:24:10
trade deals to to manage that effect. So you can create incentives that'll drive
01:24:15
onshore manufacturing by increasing the tariff or restricting trade with foreign
01:24:20
countries so that there isn't a cheaper alternative, which is obviously one of the plays that this Trump administration
01:24:25
is trying to do. I' I'd rather have that mechanism than the government making actual market-based decisions and
01:24:31
business decisions. You know how inefficient government runs. You know how difficult it is to assume that that
01:24:36
bureaucracy is actually ever going to act and pick any best interest or any good interest at all. They're just going
01:24:41
to [ __ ] it all up. So, I'd rather keep the government entirely out of the market. Create a a trade incentive where
01:24:46
the trade incentive basically will drive private markets, private capital to build that industry on shore here
01:24:53
because there isn't one and there's demand for it because you've restricted access to the foreign market. That I
01:24:58
think would be the best general solution. tax and then I think it's a slippery slope because then you could
01:25:02
always rationalize something being strategic, something being security interest in the United States. So then
01:25:06
every industry suddenly gets government intervention and government involvement.
01:25:09
And then the third thing is I don't want the government making money that the Congress then says, hey, we've got more
01:25:14
money, we got more revenue, let's spend more money because then they'll create a
01:25:17
bunch of waste and nonsense that'll arise from having increased revenue. one side and I will say I one thing where I
01:25:24
do think we do a poor job is we don't do a good job to answer your question Jal of investing the retirement funds that
01:25:30
we've mandated through social security we should be taking the $4.5 trillion that our social security beneficiaries
01:25:36
have had deducted from their paychecks over many many years and those social security future retirees or current
01:25:43
retirees are getting completely ripped off because their money is being loaned to the federal government. It's not
01:25:48
being invested. It's been loaned to the government to spend money and run a deficit and ultimately inflate away the
01:25:53
value of the dollar. We should have been investing those dollars in some of these
01:25:57
strategic assets. So if ever there were to be shares or investment that the government does, it should be done
01:26:02
through strategic investing through the social security or retirement program. Similar by the way to what's done in
01:26:07
Australia where these uh these supers are have created an extraordinary surplus of capital. Same in Norway, same
01:26:15
in all the Middle East countries. incredible sovereign wealth funds that benefit the retirees and the population
01:26:21
at large. That's where the dollars should be invested from. I do think the fundamental focus priority right now
01:26:26
should be reforming social security while we still have the chance. We have until 2032 when social security will be
01:26:32
functionally bankrupt and everyone's going to get overt taxed and kids are going to end up having to pay um through
01:26:38
inflation for the benefits of the retirees of the last generation. Freeberg's right. We're on a seven-year
01:26:42
shock clock to when social security is not funded. And by the way, this opportunity to fix mandatory spending,
01:26:48
it was an opportunity to introduce some structural reform in social security. Another reason why I think that there's
01:26:53
a degree of discretzia in this bill, particularly with how Congress had acted and not addressing what is becoming a
01:26:59
critical issue because everyone wants to get reelected in the next 12 months, 18
01:27:03
months. They've got elections coming up. So, everyone's scrambling to not mess with that because you can't touch it.
01:27:07
It's like, you know what, guys? This is bankrupt in seven years. It's going to cost us 5 10 times as much when we have
01:27:13
to deal with it when everyone runs out of money. Deal with it now. Fix the problem. And by the way, we should flip
01:27:18
all that money, $4.5 trillion into an investment account for the retirees where they can own equities and they can
01:27:25
make investments in the markets and they can participate in the upside of American industry and the GDP growth
01:27:29
that's coming. Instead, they're getting paid 3.8% or four 4 and a.5% average from treasuries that they own that, by
01:27:36
the way, are now have a lower credit rating than they've ever had. You know, it's crazy. I I'm I'm in complete
01:27:42
agreement with you and I think it's a lack of leadership on Trump's part. If Trump is going to criticize Taylor Swift
01:27:47
and Zalinski and Putin and everybody, you know, all day long on Truth Social, he can criticize Congress and the
01:27:54
Democrats and the Republicans on not cutting spending. I think he should speak up. I think he was elected to do
01:28:01
that. It was a big part of the mandate and uh he should tone down the tariff uh chaos and tone up the uh and lean into
01:28:10
uh intelligent immigration you know recruiting great talent to this country and he should be pushing to make these
01:28:17
bills uh control spending that's just one person's belief for the chairman dictator hapatia your zar David Sachs in
01:28:25
that Chris Brion white shirt very beautiful and the sultan of science deep in his wal E era. I am the world's
01:28:33
greatest moderator and as Freeberg will tell you, executive producer for life here at the All-In podcast. We'll see
01:28:38
you all next time. Bye-bye. Jason.com. Love you boys. Bye-bye. We'll let your winners ride.
01:28:45
Rainman David. We open sourced it to the fans and they've just gone crazy with it. Love
01:28:54
you. Queen of [Music] Kino besties are gone. That is my dog taking your driveways.
01:29:10
Oh man, my appetiter will be. You should all just get a room and just have one big huge orgy cuz they're all just like
01:29:17
this like sexual tension that they just need to release somehow. Wet your feet. her feet. That's going to
01:29:26
be good. We need to get Murphy's [Music] our all in.