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All right, we have a massive show for you today, besties, but it's not going
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to be our prediction show. We thought we were doing predictions end of the year,
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but we had so many amazing stories to cover in the news that we're going to do
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predictions next week. The first story is we have investigative journalist Nick Shirley on. He has uncovered in a
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breaking 42-minute video that went viral $110 million in potential fraud in Minnesota. It's part of $9 billion in
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overall fraud. and we've got him on the show here exclusively. This video apparently perhaps prompted responses
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from Cash Patel and DHS Secretary Christy Gnome who have sent agents in to inspect these facilities. Here's some
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sort of important context. These entitlement frauds in Minnesota have been going on for over 10 years. It's a
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13 14 year old story. It started by an investigative reporter named Jeff Balon. launched his first investigation into
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this in February of 2013 at Fox 9 News, local investigative journalist. Uh, and after that expose,
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charges were brought in 2014 against a Somali woman and her husband. They skip bow. They never faced trial. Here's a
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45se secondond clip from 2016 from Balon. >> Ali is facing numerous counts of theft
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by swindle and racketeering. She ran a daycare business and home healthcare company that catered to lowincome
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families. But former employees told the Fox 9 investigators back in 2013 that it
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was really part of a scam to collect millions in public subsidies. >> When I saw the bank account for the
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business, there were large Cath withdrawals on a continuous basis. >> Can I ask you a few questions?
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>> A year after our investigation, Ali was arrested and charged with billing the
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state out of about $4 million. >> Okay. Since 2018, Minnesota has seen 9 billion around 9 billion in entitlement
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frauds according to federal prosecutors. Just to give you guys a a concept of uh
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what that means, that's half of the total amount spent on 14 entitlement programs in the state. So, here's the
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direct quote from the federal prosecutor on the Minnesota fraud. The magnitude cannot be overstated. It's staggering.
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Industrialcale fraud. There have been over 90 convictions for more than $800 million
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in fraud since 2022. In 2022, 47 defendants were charged in a $250 million fraud scheme called Feeding
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Our Future that was supposed to feed hungry kids. Then up to 220 million was stolen in funds for kids with autism.
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Then 300 million was stolen in Medicaid funds meant to help people with disabilities avoid homelessness. So
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starting with that feeding our futures fraud in 2022, 82 of 92 people charged have been
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Somalian. Joining us right now, 23-year-old investigative journalist Nick Shirley. Welcome to the program.
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>> Thank you. It's been a crazy past few days out here in Minnesota. >> So I guess a good place to start is uh
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you could tell the audience a little bit about your background. uh when you got into investigative journalism.
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Obviously, you've got a YouTube channel. I watched some of your early videos when
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you were 16, 17 years old. I would say along the Mr. Beast vibes and then suddenly making a turn into politics
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specifically around immigration and some Vox pop uh kind of man on the street stuff. But maybe you could tell us a
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little bit of how you got into all this and how you got into this specific story. Yeah. So, I've been doing YouTube
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as far as I can pretty much remember since as I was as a sophomore in high school. It was just uh something I
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thought I could would be good at. So, I'd do YouTube videos and all I could do
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in high school was to do prank videos, sneaking into places, just kind of a fun stuff you can do on the weekend. And
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then as I've grown older and I've had other experiences, um I've matured and
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I've wanted to get more into more serious topics. And so, uh, as I've been
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able to go places and kind of see the world for what it is in different countries and whatnot and have different
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experiences, um, it kind of led me to get into this more investigative journalism content. And also, back in
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around 2020, you couldn't even make political content on YouTube without word without being demonetized. For
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instance, if you were to put Trump in a YouTube title or thumbnail on my channel, you would get demonetized cuz I
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was a smaller channel. So, it was impossible to make that sort of content and I was younger. I was about 17, 18
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years old at that time. >> And now YouTube allows you to monetize. I noticed you had ads baked into the
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program like many podcasters. And you're not affiliated with any news source. And
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I to the best of my knowledge, you're not backed by any special interest groups. You're not backed by some rich
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billionaire. Where's the money coming to do this reporting from? and and just to
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confirm that with the audience. >> Yeah. Everything I do, I'm 100% independent and so I make my money off
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of YouTube, off of brand deals inside of YouTube videos. And if people want to donate money, they can do that. However,
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everything I do is straight from my own hands and I don't have any other people
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really working for me other than me, myself, my mom, and a few other editors. >> So, tell us about the origin of this
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story, and then I'll hand it off to the rest of the besties to do some follow-up
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questions. Yeah. So, I've been looking into this fraud for a long time. Since
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last June, I came to Minnesota to kind of do a video on what was happening with the Somali population as far as like how
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much it was increasing and and how certain towns have been uh the demographics have changed um and how
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churches are turning into mosque and how mosques are growing inside of Minnesota. I thought it'd be an
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interesting topic for people to see. And when I was there, a lot of people were starting to tell me about the fraud that
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was taking place. And I was like, well, how do I I just can't come and label
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everyone saying there's fraud happening. I need evidence. I need actual proof.
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And so I I've been doing my own investigation. And then a man by the name of David who's inside my YouTube
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video, he's been doing his own investigation for years as he's as he works next to some of these childcare
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centers and he's driven by and he's never seen a single child at any of these daycarees. And so he started
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looking into the funding and he was able to get the numbers of how much money these people were receiving from CCAP
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funding which is tax exempt and it was in the millions of dollars. And so I was I told
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him, "All right, I'm coming to Minnesota. Let's go see what's happening
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on these daycarees." And when I got there, I was shocked to see when the first daycare we went to, all the
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windows were blacked out and you didn't even have the option to open the door.
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Everything was locked. So explain the the mechanics of the fraud just so the audience if they haven't seen this
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understand how these frauds are being played out. >> Yeah. So massive welfare frauds being
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committed. People are opening up these dayc carees, home healthcare clinics, you name it. anything that has anything
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to do with like health welfare or even just like helping people in general like with daycare or with uh healthcare,
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they're opening up these companies and then they're able to receive millions of
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dollars. And the state, for instance, I don't know if they're doing any checkups
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on these places because these places literally had signs that said learing instead of learning on their on their
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doors on outside. And what business is operating in a way where you can't even
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go inside or the windows are all blocked out? Very strange. >> Nick, let me ask you a question that I
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think a lot of people have, which is when your video, first of all, let me just say, took a lot of courage and it
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was well produced and you communicated some very complicated information in a very simple way, which I think is a
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tremendous skill. But the question that everybody asks is how do we know that you are right? And
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in traditional investigative journalism, there's a process that people follow and
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there's insurance that you have to get and then there's errors and omissions
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and you typically have to deal with lawyers. Did you go through that process when you
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made this? And do you think that it's an important part of what needs to be done
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for your credibility and for this piece to stand on its own? >> Yeah, I think everyone knows that
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fraud's been going on for years now. Like Jason was just saying, everyone knows that the fraud's being committed,
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but nobody's actually went to go see it firsthand. They know this fraud's been
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happening, right? And that's why it's been so hard for people to say, "Well,
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this is happening." Or this is why mainstream media's had such a hard time
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to actually get exposure on the fraud because they've actually never gone and
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seen it firsthand or they've had the opportunity to have a platform where they can share on their own. Right. But
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did you check all the traditional boxes that the New York Times or other people?
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Because what I'm trying to get to is how do we make sure that then you're not
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attacked and that you're not discredited and that people say this process is
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faulty and he's mudslinging and how do we make sure that you're not sued into
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oblivion? >> Yeah. And to specific to build on that Shimoth the allegation has come out. Oh,
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you went on a Saturday. Oh, you went during Christmas. And I guess you could address that because now people are
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obviously vetting your journalism. Yeah. Well, it's on I went on December 16th is
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a weekday before Christmas break. So, there's that. And then, um, sorry, the
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question as far as like did I do the vetting and whatnot. The man who helped me like lead the investigation himself,
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David, he had all the paperwork from the capital. He had somebody from inside the
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capital leaking him the information. So, there was my like fact check, per se, was he had a source from inside the
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capital. That's how we were able to get the number specifically. Do you think
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that it's going to be important for you to have lawyers that help you navigate?
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Because like if you build on this, there's obviously more fraud in Minnesota.
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>> There's a bunch of stuff in our home state. A lot of people would love you
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and people like you to start looking in all of these crevices. But how important will it be that you
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have all of the legal eyes dotted, tees crossed here? >> Yeah, that's a good question. I haven't
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really thought too much about that because every I've never been in this position where you have hundreds of
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millions like I think over 500 million people saw that video just alone just from all the impressions aside from the
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main video getting 100 million 125 million views, right? >> So yeah, that's something I definitely
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need to think about. But I think more than anything, I'm not trying to go in
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and I'm more so just giving people transparency from the outside where people can't see it when they're sitting
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from behind a desk talking about it. Right. Right. I wasn't trying to barge in any of these businesses. I was simply
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asking like, okay, like is it possible to enroll in ch a child into here? And they would say no. Like what daycare
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center doesn't have a paper for somebody enroll a child? So I think like yeah, I
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guess if I wanted if I was going to do defamation on specific people and stuff like James O'Keefe style, I know he's
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always having to lawyer up which I don't want to ever have to do. That's like
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would suck cuz that I hate getting I don't want to ever have to deal with that stuff. Are you done with Minnesota?
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Like, have you uncovered everything you need to uncover and now you're going to
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look at another state? There was a lot of traffic this weekend about Ohio, Illinois, California. What do you do
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now? >> Yeah. So, I've been making YouTube videos consistently for the past 104
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days, and I'll continue to def show the fraud that's taking place here inside
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Minnesota. It's not like I only just do videos on fraud, but um I think just
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showing people what's happening inside the country is super important. And yes,
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there's a lot more fraud taking place here in Minnesota. And I do have a part
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two episode on a whole different segment of the fraud that is taking place within
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the the state of Minnesota. And like you said, a lot of people have reached out to me, whether it be California, Ohio,
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and uh at that point, I will have to kind of I'll be doing my research as well to then not have to be in a
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position where somebody can try and sue me. >> What does it make you feel, Nick, as an
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American and also as a young American? you grow up, whatever your belief system is, what do you think? Put aside the
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investigative journalist pardon, what do you think as just an American, as a young American
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>> about the fraud? >> Yeah. >> Yeah. I think it's very upsetting. I
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mean, so many of my friends and so many people are working. We're like, we're
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working so hard just to be able to get by. Like, I don't even have a friend that owns a house at this point in their
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life. And they're 23 years old. And we talk to our grandparents and they're all
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like talking about how they bought their first house. We're married. And it's
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like that's not even a possibility for most of us, right? And so when you see
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that people are making millions of dollars and not only is it millions of dollars, it's tax exempt money. They're
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getting it from CCAP funding, which is uh tax exempt, right? And so when we're
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working hard and we're paying anywhere from 20 to 50% of our money back into
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the hands of the government while people are just funneling money, it makes us all mad and it's not fair to anybody
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quite frankly. >> It's interesting. Freeberg, I know you're you're interested in the media as
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well, like I am. This story has been covered for over 10 years by local news. You came in and did this. It became
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essentially a national story. But when we did our research, we did find a New York Times story last month, but none of
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the CNN's of the world have actually covered this. So, there seems to be a little pocketing going on here,
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Freeberg. the local news covering it doggedly, uh, running gun journalists like yourself, Nick, doing an incredible job
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knocking on doors, but there's this vacuum, Freedberg, on the national level. Any thoughts on that? Well, Nick,
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I think one of the things that makes your content so compelling is that it is long form. When you watch 60 Minutes or
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CBS or whatever, they're cut down. They're sort of like segment pieces. It's seven minutes long. What's so great
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about your footage is you get the raw true experience. It really is what citizen journalism is meant to be and
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you and I have talked for a while. I think you know we talked months ago about some of the work you were doing in
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Portland cuz like I was asking all these questions like well what is everyone else in Portland up to cuz all the video
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from all the news stations was what's going on right outside that gate where
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the ice facility was and there was like 20 people going crazy but like what's
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the rest of Portland like? and you went out and collected that content. That's
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the sort of stuff that I think makes your work so compelling is it feels so real. There just isn't a way for a
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network news station or CNN to do that sort of work where you can sit down and spend 45 minutes looking at like the
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very real footage that you put out, which is awesome. Can I ask you a question? So, you grew up Mormon, is
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that right? >> Yeah. >> And did you do a mission? >> Yeah, I did do a two-year mission in
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Chile. Do you think that that prepared you like knocking on doors or engaging people openly in your missionary work to
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be able to do this? Because I can tell you I know so many journalists who would be scared shitless to go do the stuff
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you've done in New York City and Portland now in Minneapolis where you're
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actually going into these facilities looking people face to face. Like how did you develop that that capability?
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Was it rooted in your missionary work? I mean, I think that might come from a little of it, but I think being the
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youngest brother also really just always having to impress your older brothers and being the daredevil for him and his
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friends. Like, I just didn't grow up with fear. Like, it wasn't even a concept for me to go and do go do the
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bike jump when I was 5 years old, right? So, it's always been something that I
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haven't been afraid of and I've never been afraid of rejection as well. I used
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to do door cells and the mission you literally are just walking around trying to talk to people about Jesus for two
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years straight and you just get denied every single day and you're just hoping
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to have like a small sliver of success for what you actually do. And so that definitely helped.
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My mission more so taught me about the effects of mass migration because I would see so many people fleeing
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countries like Venezuela and then I came to the back to the US and I saw what was
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happening at the border and I was able to learn Spanish. But the I think just like my upbringing in general being the
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youngest brother and then also uh my morals from being a member of the Church of Jesus Christ Latterday Saints. I
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don't drink, I don't smoke, I don't do any of that. So I feel like I have a
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advantage for compared to a lot of people as far as like my mind's always I'm not getting skewed with addictions
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or trying to go and do something else. >> Nick, are you still very religious?
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>> Yeah, I am. >> Sax, what's your take on this? And um the question I asked Freeberg, which you
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didn't get to, maybe you could take, which is this hasn't seemed to made the
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make the the national uh press, but it has been on the local and obviously it's
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on X. Maybe you could give your handicapping of the media sphere and Nick's role in it as you see it in 2025.
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>> Well, I think it's an indictment of the press. They haven't covered this and
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they still haven't covered Nick's video, which is now, like you said, a viral
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video with hundreds of millions of views and everyone can see what's happening.
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You basically have this huge multi-billion dollar fraud taking place. Yes, there were stories going back a
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decade like you said Jason, but they were isolated stories where they could be portrayed that way. And I think what
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Nick has done is show that the fraud is massive and in plain sight and no one bothered, no one cared enough to expose
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it. And you know, Nick, you did this by just going around to all these supposed daycare centers which are receiving
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vouchers from the government anywhere from what one and a half to $4 million per daycare center per year based on
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fictional enrollments of children. And these centers aren't even operating and
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they're collecting millions from the government. All told, I guess it's adds
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up to 8 to 10 billion. So this is taxpayer money that's being stolen from Minnesota that's being stolen by this
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Somali community basically. And I think the story's gone viral because it includes
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so many aspects of dysfunction. I mean, you've got the issue of illegal immigrants. Some of the people in the
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Somali community got here illegally. Some of them didn't. You then have these
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progressive judges who foolishly voided convictions of some of the fraudsters who were doing this. I mean it's just um
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classic example of suicidal empathy or something like that. So you have that aspect of the story and then you've got
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the political corruption. Again these are not isolated incidents. This is a a case where I think we have to see this
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as a system at work not just an example of like a few isolated fraudsters. There's some roundt tripping here where
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some of the funds that are going into the pockets of the Somali community through this fraud end up back in the
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hands of politicians. And the really extreme example of this is that Tim Waltz even changed the flag of Minnesota
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to resemble the Somali flag. I mean, he lowered the old flag and raised this new
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flag to that resembles the Somali flag, which shows the political clout of this community, which is why I think a lot of
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politicians turned a blind eye to what was going on. So, I just think you've
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got all the ingredients here of this story. You've got this suicidal immigration policy that we've had
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combined with massive government fraud with dereliction of duty and incompetence
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combined with political corruption. And that's why the story is going viral and
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has gotten hundreds of millions of views. So kudos to you, Nick. And of course, the way that they are defending
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themselves. Well, first of all, the press is trying to ignore the story as much as possible. But to the extent that
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they have to confront it, what they do is just accuse us of being white supremacy,
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that anyone who notices that this fraud is being perpetrated by this Somalian community, that somehow that must be
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racial animist, that's the only reason people care about or something like that. And so they've accused Nick. And
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that actually is the last element here, which is again this tired, worn out trope of accusing anyone who threatens
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this corrupt government machine of being somehow racist. Any event, let me stop there. Nick, let me get your reaction to
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all of that. >> Yeah. No, I love everything you said because it's so true, especially like
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for instance, they found a man here with $7 million he had committed in fraud and
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then the judge overturned it, right? And then Tim Waltz is calling people like me
00:20:16
a white sup white supremacy. He says we're acting on white supremacy. No, Tim, it's millions and billions of
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dollars in fraud of hardworking motan people that's being sent who knows where. And so it's not like and then
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today I'm just looking at the media and people are it was the craziest thing. I
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get on there and people are starting to say all these like crazy allegations about me. I'm like whoa where are you
00:20:39
guys? People have even came out say said I'm like a a pedto. It's like what? Like
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I literally just went and did the job that everyone's been wanting to see done
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for years, right? And I just brought limelight to everything, tried to make it as uh just a simple issue about fraud
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happening. >> Let's just be clear. You just went to these daycarees and just I I looked up
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the CCAP that you mentioned. It's the Minnesota Child Care Assistance Program
00:21:04
is what CCAP stands for. And it's a state administered program, but it's
00:21:08
funded largely by federal dollars to subsidize childare for low-income families. So, it's not just motans who
00:21:15
are paying for this. It's all of us through our federal tax dollars. And I'm
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seeing a lot of follow-on commentators in other states now saying, "Hey, you
00:21:24
know what? In Ohio or in the state of Washington, we're looking at the government roles and we're seeing that
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there's over 500 Somali owned daycare centers." And by the way, that's just
00:21:35
like one type of fraud or one type of very suspicious behavior, but you can start to see that people are starting to
00:21:42
pull the thread here and they're seeing like where this fraud goes. And it's
00:21:46
starting to raise questions about lots of other government programs as well. For example, in California, we have $24
00:21:53
billion going to quote unquote homeless programs. And yet, the number of homeless people keeps rising. And you
00:21:59
know, everyone knows it's called the homeless industrial complex. they can't
00:22:02
pass an audit. The state refuses to even permit an audit. So, we know there's
00:22:07
massive fraud going on in that program. There's massive fraud going on in entitlements across the country. And I
00:22:13
think part of the reason why Nick's video has gone viral here is people can kind of feel that the whole country is
00:22:19
really being eaten alive by this fraud and corruption. And it is a huge part of why we have such a huge deficit, why we
00:22:27
have so much government debt. And it feels like finally someone's blowing a lid on it. And Nick, it feels like
00:22:33
you're achieving what Doge set out to do. And I think there's no one feeling
00:22:37
more vindicated right now than Elon Musk because literally some of the things that he was saying back in February, you
00:22:45
have now proven true that there's huge amounts of of entitlement fraud. Some of
00:22:49
that money that is stolen then goes to politicians who then either support the expansion of that system or turn a blind
00:22:56
eye to what's going on. And some of this is even connected, I think, to voter
00:23:00
fraud. So, you're talking about here stolen money maybe leading to stolen elections. I mean, it really feels like
00:23:06
you've kicked this rock over and we're starting to see a bunch of nasty things
00:23:12
underneath it. And what I think is really cool is that you're inspiring copycats. Now, some people have called
00:23:18
this decentralized Doge where now, you know, hopefully we get a thousand or a million Nick Shirley's all over the
00:23:24
country who start to show up and try to shine a spotlight on what's going on
00:23:29
with all these government programs. >> Yeah, I think it's essential that people
00:23:33
realize what's actually happening and realize that, like you said, like we are
00:23:37
getting eaten from the inside. Like, why is our money going to these places? We we always talk about Tim WS was ranting
00:23:43
about healthcare the other week. I'm like, well, maybe you shouldn't be giving hundreds of millions of dollars
00:23:47
to healthcare companies that have nothing to show when you go to their business and all the other stuff that goes along
00:23:55
with what you were saying. Like, yes, this like I think Elon's why it sparked
00:23:59
Elon's interest is because it's physically showing people with their eyes, not just a contract. And it's
00:24:06
sparked such con such conversation across the internet because it's something people can physically see and
00:24:12
people are actually feeling inside of their communities. >> Nick, do you think that the fraudsters
00:24:17
are going to get a little bit better at covering their tracks now that you've
00:24:20
exposed them? Cuz I I feel like one of the things that was really amazing is you would just show up at these
00:24:26
daycarees that, you know, you can see from the government roles are receiving millions of dollars. They call
00:24:30
themselves a learning center, but they misspell the word learning. So, it's a
00:24:34
learing center and it's these cinder block buildings like there's there's no
00:24:40
reception. There's no one there. I mean, it's almost like they've made it too
00:24:44
obvious. Then there were cases where you would have people that got busted a decade ago. The locations didn't even
00:24:49
change. They just renamed those fraudulent businesses and they were literally operating from the same
00:24:54
locations a decade later. I mean, it's almost like there was just no attention
00:24:59
paid whatsoever to where this money was going. And I'm just I I guess the only
00:25:04
thing I'm kind of worried about now is that with you blowing the lid off this
00:25:07
thing is whether the frauders are just going to get better at covering their tracks.
00:25:11
>> Yeah. Well, I think that they're gonna have to look into where they're sending
00:25:14
all this money, right? Because they if they wanted to really confront this fraud, they could have just cut off the
00:25:19
they could have just cut off the money and said, "All right, one sec. Let's
00:25:22
take a month. Let's figure this out." But no, they just kept giving more and
00:25:25
more and more and they even started expanding it. For instance, how does a place just have an increase in autism?
00:25:31
like how does that happen? Yeah, it start it made me wonder whether a lot of our statistics about issues like that
00:25:38
like autism like to what extent are they manufactured because we're creating this
00:25:43
huge incentive for people to create cases of autism of these like you know fraudulent
00:25:49
healthcare centers and it does make me wonder like well can we trust any of the numbers
00:25:54
>> just to be specific in the areas that you guys are talking about where they
00:25:57
think there was fraud Medicaid claims for autism in Minnesota spike like 130x in 5 years.
00:26:06
>> X what the heck X 130 not to 1.3. Oh my god. >> From 2018 to 2023 it went from 3 million
00:26:16
to $400 million. >> It's probably the water. It's probably the water or vaccines. It could be
00:26:20
anything. Who knows what it could be? It could be fraud. >> Jason, I have a question for you which
00:26:25
is twofold. One, what do you think of what Nick did if you've watched the video? two, why are your former brethren
00:26:32
trying to bury this story? >> So, I think Nick is doing the most fundamental act of journalism for which
00:26:38
he should be lauded and is correctly being lauded, which is just go knock on a door, right? And asked the most simple
00:26:43
question in the most unbiased way. Now, >> are there kids here? And can I send my
00:26:48
kid here? >> You know, I I looked into Nick. I looked into your videos. >> Most basic could you get?
00:26:53
>> Yeah. Incredible. And they failed test. They failed the most basic test. the
00:26:58
most basic simple test and you know I looked into all of Nick's videos because
00:27:02
I saw >> anytime you do something like this investigative journalism people will
00:27:06
correctly and you alluded to this chumat in the beginning start to vet the veter
00:27:10
right and I was like okay tell me everything about Nick Shirley let's look at all his Twitter feed let's look at
00:27:14
his YouTube videos like who is this person why are they doing what they're doing and I watched Nick as you ask
00:27:20
questions at a Bernie rally uh and uh some other events when you're doing your
00:27:25
man on the street stuff which is also very brave because you can get your ass kicked. I don't know if you have
00:27:29
security or not yet, but you're going to need it. Do you have security? >> Yeah, now I have to.
00:27:33
>> Yeah, of course. So, this is brave stuff, but this is the core task of journalism is to get this primary
00:27:40
information and let the viewer decide without bias. And we can criticize 60 Minutes and the New York Times and there
00:27:46
there's plenty to go around, but if you look at the history of it, I think Nick,
00:27:48
you've got incredible potential to sort of take the baton that you saw from that
00:27:52
local newscaster on Fox 9 and keep building on that. And to your point, David, I think Freberg you made about uh
00:27:58
crowdfunding and crowdsourcing this journalism, it's it's going to be very
00:28:03
powerful in the future. If you look at how long it takes though to do this, these things take decades. So I think
00:28:09
you got to stay on the story and if you look at the Catholic Church spotlight, the frontline documentary, you look at
00:28:15
60 Minutes and what they did with Big Tobacco, these things do take a long time. So you
00:28:21
should keep your hooks into them and keep working it. The other thing I thought that's really interesting here
00:28:26
is this could be the opportunity right now is everybody in the United States who is a taxpayer does not want to see
00:28:32
fraud. They don't want to see waste. They don't want to see abuse. So although Nick, I I think your leanings
00:28:37
are right. >> Are you sure? >> I am pretty sure that 90% of Americans
00:28:42
don't want to see their tax dollars wasted. >> What if there's a group of people that
00:28:47
would be okay with it even if they were told it was fraudulent, but it allows their side to keep winning? Yeah, I I
00:28:53
that's like a conspiracy there. I don't think >> No, it's not a I'm just saying it's a
00:28:57
boundary condition. I just wonder if you actually put it there that you would get
00:29:02
95% that says this is wrong. >> Yeah, I think you'll get 95% that will
00:29:06
say it's wrong. But we'll see. And what I think could happen here is that this
00:29:09
could be the issue that pulls Americans together that we could have consensus on, which is we don't want to waste our
00:29:15
tax dollars. Putting aside the fact, Nick, that you're conservative, it doesn't matter. You're religious. It
00:29:20
doesn't matter. What matters is the truth. And the truth here is there's
00:29:23
massive waste, fraud, and abuse. And Elon saw it. Elon told us, he confirmed it. And he got attacked for it. Elon was
00:29:31
100% right. Everybody who attacked him, they may not have liked his tactics and how fast he was going and locking doors
00:29:37
and turning off credit cards, his techniques, they may not have liked, but we as Americans can all get behind not
00:29:43
allowing any more fraud. And we should not be increasing taxes into a system that is ripe with fraud. that I think
00:29:50
everybody will agree on. And when all that fraud happens, it keeps us from actually sending the money to things
00:29:56
that we might actually as a country uh that might pull us together even more, which is like I don't know, maybe we
00:30:01
could have universal healthcare like the other 80 most developed countries in the
00:30:04
world if we rooted out this fraud because there's just far too much waste. And so I I think you did a great job,
00:30:09
Nick. And I think this is where we could see massive opportunity for investment in new publications
00:30:18
and new news sources that take folks like Nick, pair them with two or three other folks and now you got a team which
00:30:24
it seems like you're building and then you could have a permanent funding source. So if you could get
00:30:29
>> You only have GoFundMe Nick right now. >> No, I don't have GoFundMe. I just accept
00:30:33
donations via Venmo or if you want to send >> Yeah. You should start a subscription
00:30:37
service, you know, like Substack or any of the other ones, Beehive, and you should literally use this momentum to
00:30:43
get to 10 to 100 to a million dollars a month in donations that reoccur. That's
00:30:48
the key is the reoccurring. Go ahead. >> You have young people reaching out to
00:30:50
you that want to do this work with you now. >> Yes. I think people are interested like
00:30:55
people are like, "How do we start or how do we do it?" And uh it's a good
00:30:58
question. I think most people like I didn't I didn't go ask somebody how to
00:31:02
do it. I just went and did it. >> Mhm. And so a lot of people are so scared to take those steps when in
00:31:07
reality you just have to go do things if you want to make stuff happen. >> There was an image that I saw on X and
00:31:13
it had a ship running into the iceberg. Nick, maybe you can find it. And the ship's name was
00:31:21
the USS taxpayer. And the top of the iceberg that was visible was Minnesota, but the bottom of the iceberg was
00:31:28
California, which >> that's great. which is the fourth largest economy in the world is just the
00:31:36
state of California. I don't know if you can just show the tweet from Kevin Kylie,
00:31:41
which I retweeted with a couple of things on. Here it is. What he says is a third of college applicants were fake.
00:31:48
17 billion was spent on high-speed rail with no track. 24 billion in homelessness funds disappeared. 32
00:31:56
billion was lost to unemployment fraud. medical and SNAP are rife with improper payments. It's probably a hundred
00:32:03
billion dollars a year that's being just completely pilered out of California.
00:32:07
So, I don't know if Nick Shirley you have the time to come out west, but if you do, you're just going to find an
00:32:14
entire treasure trove of opportunities to look at. Oh, there's massive fraud in
00:32:18
California. I mean, the homelessness has just increased as they receive more money. And that's just one part of it.
00:32:24
And like you talked about the the light rail and everything like that. Yeah. The
00:32:27
fraud is like crazy in California and they have the highest taxes. >> Yeah. They want more.
00:32:33
>> Yeah. >> Nick, has anybody approached you about this thing? I tweeted it about it. I had
00:32:37
never heard about it, but these guys educated me on it called Quit, which is this framework where you can actually
00:32:44
sue on behalf of the state and on behalf of taxpayers. Has anybody approached you
00:32:49
about thinking about using all of the information that you've garnered to try
00:32:53
to launch some of these lawsuits or No. Yeah, I actually had somebody reach out to me the other day about it. So, I'm
00:32:59
going to actually hop on a phone call with that guy. >> Yeah. Also, as I understand it, some of
00:33:03
these whistleblower laws reward the whistleblower with something like 20 to 30% of amounts that
00:33:08
>> up to 50% in some cases. >> Yeah. That are I don't know if it's like
00:33:12
fines or it's amounts that are recaptured. >> Recaptured. Yeah. >> But I don't know, Nick, you could become
00:33:17
a billionaire here just with all the billions you've exposed. >> I got I got to sit down and figure it
00:33:22
out. I know that's not why you're in it, but >> you'd be the most well-loved billionaire
00:33:26
in America if you didn't. >> Absolutely. Well, the way to do it is, you know, since you're drafting off of
00:33:30
these other news reports, is to set up your own tip line. So, Nick, what's your
00:33:33
website or do you have a website where people can donate? And do you have a tip line? Because you wouldn't get the
00:33:40
whistleblow awards for the stuff Fox9's been doing for a decade, but for the
00:33:44
next one, you could. So, what is your website where people can donate, Nick? >> Yeah, everything just on social media.
00:33:50
So they can message me on any platform. I should probably get a website going. Um, so
00:33:57
>> Nick, what's your social media handle where people can DM you and donate?
00:34:01
>> Yeah, it's just Nick Shirley. And if you go on X, I do have my tip section open.
00:34:04
So if you would like to donate there, that gives them all the whether it be Venmo, Cash App, Crypto, you can all do
00:34:11
it right there. >> So X.com/nickshirley, you can go right there and you can tip
00:34:15
if you want to support this kind of research. Well done, Nick. >> Thank you. Are you spending all your
00:34:21
time in the US or are you still thinking about some international stuff? >> Yeah, I have a international trips
00:34:27
planned for this month as well that I had planned before this because it's funny that like everyone's talking about
00:34:32
this fraud stuff, but I I have a business I have to run with my YouTube videos. I've been posting every week
00:34:37
consistently for the past 104 weeks or so at this point. And so I have to keep moving on and keep producing content for
00:34:43
my followers. So yeah, I do have other videos and I have other places I'm going
00:34:47
to go film as well. Look into those whistleblower laws. I think uh >> Yeah, make some money. Make some money,
00:34:52
man. >> No shame in the profit. You probably get a ton of investors. >> Yeah. Yeah. I need to look into all that
00:35:01
stuff. So, it's been cool. Like the cryp I've had like some crypto communities
00:35:05
that have like even like funded money. I have I'm like just down on my laptop at
00:35:09
night and people are sending me money. I'm like, what's going on? >> It's awesome.
00:35:12
>> Well done. >> What's the sweatshirt you're wearing? Just show us the sweatshirt. the quality
00:35:16
of >> lyricsing center. Is that for sale now? Is that the merch? >> Yeah. I'm going to go do a video outside
00:35:21
of it right now. And uh >> you put on your YouTube channel for merch? >> Yeah, I'll put on my YouTube and I'll
00:35:26
just put like on X. I'll probably like a one time drop. >> Oh my god, dude.
00:35:30
>> You saw the guy who I guess runs that place or owns it. He had a video on X
00:35:35
today saying that. No, no, no, no, no, no. This is a real daycare center. Nick just happened to come by in the morning
00:35:41
and that's when all the kids are at school. So, he just came at the wrong time.
00:35:45
>> What was super funny about that too is the Department of Children was doing a
00:35:50
live feed at that same time and she said that the daycare had was closed one week
00:35:55
ago and it closed after I posted my initial video. So, like while he while he was saying that it's open, the lady
00:36:03
who runs the whole thing or runs something in the government said they closed it last week.
00:36:08
>> Sorry, Nick. Just one before we lose you, do do you have evidence or have you
00:36:11
collected evidence that people within the agencies are part of the fraud syndicate and that they're participating
00:36:18
in the fraud? It's hard to say like that you have like the paper trail of it because you don't
00:36:24
it's hard to get get me the access to that. But um I think if you just look at
00:36:29
like Elon Omar's net worth, if it's true that went from negative to 30 million
00:36:33
since she's been in Congress. >> Yeah. Let's Yeah, let's make sure we put a
00:36:39
couple allegedly. >> No, it's all over Yeah, you're right. It's all over social media, but
00:36:43
>> Yeah, which means it could be wrong. It could be wrong. >> I haven't seen a fact check. I mean,
00:36:47
I've not seen it. >> Always put an allegedly there. Just >> Yeah. Also, I think I think Congress
00:36:52
people can report a range. I think the range is 6 to 30. So, they use the upper, but let's just throw in a couple
00:36:58
of allegedly. >> Still, she went from negative to being a multi-millionaire in
00:37:01
>> I'm not debating that. I think the trend the trend is quite curious, Nick. I'm
00:37:05
not talking about the federal congressperson. I'm talking about people within these agencies that are signing
00:37:11
off on the check, signing off on these centers. In your investigation and the conversations you have, do you have
00:37:16
reason to believe that the individuals within the agencies within the government agencies are complicit and
00:37:22
partnering and participating in the economic fraud? >> Yeah, 100%. Because a lot of these
00:37:28
daycarees, there's six, seven violations and they're still continuing to give
00:37:32
funding to these daycarees. Um, and they have the same name, the same person has
00:37:37
opened up. I was in one of their fraud committee meetings. The same person had been opening up daycarees and healthcare
00:37:43
companies and it was all big. W They had all the they had all mapped out and somebody from inside the government in
00:37:50
Minnesota still continuing to write these checks. So, >> they're not they can't be dumb, right?
00:37:56
They can't be that dumb, I guess, is the point. Well, I mean, it's possible that
00:38:00
they're totally incompetent or they're turning a blind eye or they're getting
00:38:05
payments. Probably one of the first two, but who knows, right? >> Well, the thing with the money they're
00:38:09
receiving is that CCAP money, it's a tax exempt. And so, they they literally get
00:38:14
like the the money and they get it in cash somehow. They don't pay the women
00:38:18
that are working there. Like, there's videos of them just handing the ladies
00:38:21
cash. In Muslims, they're able to have four wives and so they're able to
00:38:24
collect the welfare on top of that. That's why 81% of the population, small population side of Minnesota is on
00:38:29
welfare because they're actually not paying the people. They're just collecting the welfare from it. And then
00:38:34
if you go into any of the grocery stores here, they're not grocery stores. They
00:38:38
have like six different shops inside of them. And they all have money transferring sites inside there where
00:38:42
they're just siphoning money out to other countries and back home. And a lot
00:38:47
of time you can there's actually a Fox did a thing on it in 2017. Um, and I actually had somebody who's going to be
00:38:54
in my next video talking about this. He used to work at TSA. And the Somalians would literally bring in millions of
00:38:59
dollars in cash through TSA and they'd fly from there to Atlanta and then to
00:39:04
Dubai and then cuz there's no taxes in Dubai, they then send that money back to
00:39:08
Somalia. And so like the rumors of them funding al-Shabaab, they're real because
00:39:14
they've been able to funnel all this money and once they go through the TSA with a luggage full of cash and they
00:39:20
make it to Dubai, they're able to send it to wherever they'd like. >> That's a terrorist group or
00:39:24
>> Yeah, the terrorist group. Nick, let me ask you another question. In the last two days since your video
00:39:32
went viral, we've seen the mayor of Minneapolis and the governor come out and effectively say, "Hey, we need to
00:39:39
protect this community." Why do you think the leadership is not up in arms on the obvious fraud that you've
00:39:46
demonstrated so clearly? Why are the government officials within Minnesota not throwing their hands up saying, "We
00:39:51
have to make this stop right away." Why are they taking a defensive posturing?
00:39:56
they're like incompetent or do you think there's like complicit behavior here?
00:39:59
>> It's because if there that's such a large group of votes that they can
00:40:03
receive and David said it as well, there's some weird voter fraud that's
00:40:07
also taking place here where you just literally need a license. Like even in one of their committee meeting meetings,
00:40:13
they said that. But essentially like this happens in the UK too is that when they bring in uh specifically Muslims to
00:40:20
a lot of these areas and then comes time to vote, the leader of the mosque or the
00:40:24
leader of this apartment complex will say, "All right, everyone, now it's time
00:40:27
to go vote and let's go vote for this person." And because it it the the
00:40:33
it's tough because of uh Islam and everything like their religion like they should be more conservative if
00:40:40
they're actually voting off what they care for because of their values, but they're always voting democratically.
00:40:46
They're always voting for the Democrats. Like if you people are going to give
00:40:51
more money and so they're not really voting for what they actually believe in. They're
00:40:56
voting for who's going to keep funding them and who's going to keep writing the
00:40:59
checks. And so that's why you'll see them going to eat at a Somalian restaurant and you can tell the guys are
00:41:05
ready to barf when he's trying to put the food into his mouth and then the lady putting the hijab on inside of one
00:41:11
of their grocery stores. It's just all panhandering to get the most. >> Nick, you mentioned this terrorist
00:41:17
allegation and the funding of terrorism from the social programs. Is that something you've firsthand investigated
00:41:24
or something you read online or something you talked to an insider about? Can you unpack that first because
00:41:30
that's a pretty explosive one and I know Bessant has mentioned it but you can
00:41:34
unpack your firsthand knowledge of it if >> well there's the reports from 2017 and
00:41:40
then it's also came out still coming out and people are talking about that. I
00:41:44
think even the government, the US government has said that as well. And also I've talked to people as well
00:41:50
inside of these grocery shops where they have 10 different stores and I asked them like what do they do and they have
00:41:55
these shops where they wire off the money to Africa. >> Right. But specifically the funding of
00:42:01
terrorism, you don't have firsthand knowledge of that just to be clear. >> Well, I don't think uh Somalia I I don't
00:42:07
think it's like very ran very well. So >> I mean there's a lot of corruption
00:42:11
there. I mean when your main import and exports pirates and piracy I don't think
00:42:16
that's probably the best thing. >> Okay, got it. Just want to confirm because it's like a explosive
00:42:20
allegation. Want to make sure you're not saying you know this >> said it on national TV today Jay Cal
00:42:26
this morning. >> Yeah. No, no, I know. That's why I'm the way Nick phrased it. I wanted to make
00:42:30
sure if there was firsthand knowledge he had or if he was just referencing the the best and stuff.
00:42:34
>> Yeah, it's really tough to say like it firsthand because it's always like how
00:42:39
how does somebody just go get the papers? And so that's why you rely on the government for instance like he just
00:42:44
said like Besset comes out and talks about it and so like it's our responsibility to keep investigating and
00:42:49
looking into it and then also trusting the people that we trust. >> Is that going to be your international
00:42:54
trip? Are you going to go try to track that down on the international if even $1, if even $1 went abroad to a terror
00:43:02
network? >> This is an entirely whole new kettle of fish because now you're not just talking
00:43:07
about domestic fraud. Now you're talking about international terrorism. And now
00:43:11
you're going to bring in every single agency of the United States of America
00:43:16
who will have an opinion. >> Yeah. >> That is bad news bearsers for these
00:43:20
guys. If this is true, >> I'll tell you where you double clicked on it. This is like this could be the
00:43:24
next story. >> Watch out. Yeah. And I'll tell you where I have the most concern as a citizen.
00:43:30
I'd be most concerned about these members of the government that are complicit or turning a blind eye to
00:43:38
allow this capital to flow to individuals who then turn around and use that capital to make donations to those
00:43:44
government representatives campaigns. If that paper trail is found that the government representatives are causing
00:43:50
money to flow basically back into their own pockets or their own campaign coffers, that to me is the most
00:43:56
offensive thing as a citizen that not only are they fraud, but >> we already know that.
00:44:01
>> I've had mayors in California tell me about that. Um who've given me firsthand
00:44:06
accounts of them knowing the family members of people inside of the government opening up nonprofits and
00:44:11
then that's how they get a lot of campaign money. >> Yeah. Look, there's a very important
00:44:15
word here that we haven't used. We've talked about incompetence, greed, theft.
00:44:20
There's a very important word, patronage. This is a patronage system. An exac account called Amuse wrote a
00:44:26
really good blog post about this. Let me just read you this part. Basically, this
00:44:29
fraud is is not incidental misconduct. It is the patronage system operating exactly as designed. Large welfare
00:44:36
states generate predictable cash flows. Fragmented bureaucracies create blind spots. Language barriers, slow audits,
00:44:42
cultural difference paralyzes enforcement. When one operation is shut down, another opens under a new name, a
00:44:49
new board, and the same people. Money moves through layered nonprofits, shell entities, and informal remittance
00:44:55
networks. Accountability evaporates. And then, crucially, the system does not require that all patrons be Somali. It
00:45:01
requires only that patrons be paid. Non-Somali politicians learn quickly. They adopt the language, symbolism, and
00:45:07
rituals of the community. They attend the right events. They avoid uncomfortable questions. In return, they
00:45:13
receive votes. Campaign muscle and money and insulation from accusations of racism or Islamophobia. Investigations
00:45:21
stall. Prosecutors hesitate. Regulators retreat. The system expands. And play this video. This is of Tim Waltz. Just
00:45:28
play that video. >> Whoa. Wait a minute. This is Tim Walsh, the governor of the
00:45:33
state, replacing their old flag with a new flag that's designed to resemble the
00:45:39
flag of Somalia. >> So the allegation, Saxs, just to be clear, is they are giving this money
00:45:46
knowing it buys votes and knowing that >> Somalian community is incredibly
00:45:51
wellorganized in Minnesota. There was an interview with the attorney general where he was saying that this is another
00:45:58
ex video that you can find. I think his name is Keith Ellison. Anyway, he was saying that the Somali community was
00:46:03
incredibly potent politically and was a big reason why he got elected. And like I said, it's very well organized and
00:46:12
they're turning to get their votes by giving them this money to steal. >> It's not even a question. It's a fact
00:46:18
that that's why they're g only after and so they're they're allowing the fraud to
00:46:23
happen because of the votes. Wait, that's just again that you're saying that's a fact that they are
00:46:30
>> Please don't act shocked. Come on. >> No, no, no. It's a It's an allegation. I
00:46:34
I just I would I would tell you a journalist in training Nick to put >> You think that's a coincidence allegedly
00:46:40
in the front of these things until you actually know it's >> Where did that new flag come from?
00:46:44
>> I I I'm not saying it's not pandering to them, but to say it's quit proquo. Just
00:46:47
>> that's the same thing. Yeah. In instead instead of taking Sax's advice here, my
00:46:51
best advice, put the word allegedly until you know it's a fact. Don't say
00:46:55
it's a fact. Unless you know it's a fact. >> Allegedly. Okay. >> Yeah. Just just so you don't get sued
00:47:00
and you know >> I mean like is speaking the truth like criminal because it is a fact.
00:47:06
>> Okay. Great. You say it's a fact. >> How much more proof do you need, Jacob?
00:47:10
>> No. No. It's >> You won't believe it until Tim Walls is caught on video accepting an envelope
00:47:14
from, you know, one of these small frauders. Not my point. My point is this is political patronage and look, a lot
00:47:22
of it is incompetence and they probably didn't think they're going to get
00:47:25
caught. But on top of that, it's turning a blind eye to an obvious problem because it's going to alienate a
00:47:31
critical demographic who supports and has supported you in all of your elections. It's that simple.
00:47:37
>> What's the poly market say, Jay Cullen, whether Waltz is going to get
00:47:40
prosecuted, go to jail? >> Let's find out from our friends at Poly Market. Tim Waltz charged by dot dot dot
00:47:47
and there's a lightly traded uh $60,000 9% chance >> 29% before 2027 >> and here's your other poly market will
00:47:57
anyone be charged over daycare fraud in Minnesota by the end of January the end of June the
00:48:03
end of December 56 91 94 so people are betting somebody is going to be charged over this and if Tim Waltz is
00:48:12
specifically knows about this and did it to buy votes and that can be proven, he
00:48:15
should go to jail. And if he knows and anyone over there knows that this money has been routed to a terrorist
00:48:21
organization, that would be treasonous and that would be an even higher level. Uh so we need to investigate this
00:48:27
massively. So if Besson is listening, friend of the pot, yeah, double click, double click, double click.
00:48:34
>> It's already on Scott's agenda. That's why he talked on TV talking about it,
00:48:38
dude. He's been all over it. >> You can't hide now. that that this is
00:48:42
Pandora's >> as part of that investigation. Someone needs to investigate why these three
00:48:47
liberal judges have repeatedly refused to hold Somali fraudsters accountable even when the evidence is overwhelming
00:48:54
and a jury has convicted them. >> Unbelievable. >> These three judges set aside
00:48:59
convictions. >> Well done, Nick Shirley. And uh next time you have a great office,
00:49:04
>> please come on the pot again and and let us know. Thank you. I appreciate you
00:49:07
guys. Appreciate all the side of history. >> Support on uh X and everything like that
00:49:11
means a lot. >> And believe me, there's there's a ton more in California.
00:49:15
>> Okay, let me just go around the horn here. Lightning round Sachs. A year from
00:49:18
now, what will happen in relation to what we've seen in Minnesota? >> Well, I hope that there will be a
00:49:25
serious investigation. I hope that there will be indictments. I hope there will be deportations, hopefully massive
00:49:30
amounts of deportations. And I hope there'll be impeachments of some of these officials who let the fraud
00:49:36
happen. >> So the country is being eaten alive it feels like by fraud. Government funds
00:49:43
are being stolen. Votes are being stolen. I believe elections are being stolen. And it all comes from the fact
00:49:48
that the party of government doesn't really care where the money goes. It's
00:49:53
all just patronage to them. Whether it's to Somali daycarees or whether it's to
00:49:58
this high-speed rail line that doesn't have one piece of track. I mean, how much has California wasted on that?
00:50:03
>> Yeah. >> Or 24 billion to the homelessness only to see the homeless population increase.
00:50:07
Look, these politicians don't care how the money is spent at all. All they care
00:50:13
about is rewarding their supporters. That's the whole game. And then those supporters round trip a portion of the
00:50:19
illotten gains they've gotten from the government back to those politicians.
00:50:22
That's the whole game. And then when the whole thing blows up because it's just
00:50:27
so corrupt and inefficient and so absurd, what do they do? They try to find productive people to scapegoat. And
00:50:34
they say that billionaires are your problems. They'll blame billionaires for
00:50:36
that or they'll blame the tech community. Look, the startup community or the tech community is one of the I'd
00:50:41
say last extremely well functioning parts of American society, but they don't control it yet. And so that's what
00:50:48
the politicians will do is they will try to find scapegoats to expand their control and expand the size and scope of
00:50:54
the corrupt system that they're running. >> Freeberg, what do you think a year from now, where
00:51:01
will we be? And what do you think this um says about America at the end of the empire? And
00:51:08
yeah, which you've been focused on. Yeah, >> probably two things. So this is like
00:51:12
everyone pocketing the silverware as the Titanic is sinking because the spiraling
00:51:16
spending, the lack of audits, the lack of accountability effectively enables an environment like
00:51:23
this because we've basically increased government spending so much to basically
00:51:28
try and grow the economy, prop up the debt, keep the debt service payments flowing,
00:51:33
etc. So as a result, anytime you have a bubble, and in this case, we have a bubble in government spending, you have
00:51:40
frothy, fraud behavior. There's my guess tip of the iceberg. Elon's estimate was
00:51:46
20% of federal spending falls under this kind of fraud camp, could be more. And then when you add in state and local
00:51:52
spending and you start to do the accounting on all of this, we're probably talking about a sizable
00:51:57
percentage of overall GDP that is effectively theft through government agencies or government checks being
00:52:05
written. And I think that's going to be the great uncovering of 2026 is we're
00:52:10
going to see on the order of trillions of dollars of >> trillions >> trillions of dollars of this sort of
00:52:16
behavior happening across the economy. And I also think the other side, nothing will happen. And and I think nothing
00:52:23
will happen because the cost is going to be so significant. It's almost like
00:52:27
staring into the abyss. It's gonna make people feel sick to try and address it.
00:52:31
>> Actually, let me ask you a question. How do you differentiate between legal theft
00:52:35
and illegal theft? Meaning, I think what the Somali daycarees were doing was outright fraud and is illegal. But when
00:52:41
Stacy Abrams creates a NGO in the final days of the Biden administration and that gets stuffed with$2 billion
00:52:47
dollars, I mean technically I guess that's legal, but it's clearly a different kind of theft and fraud.
00:52:54
>> Would you throw up in your mouth when you heard the news? That's the that's
00:52:57
the test. >> That's the little test that Yeah. And I call that the common
00:53:03
sense vomit in the mouth test. If you don't pass the common sense vomit in the
00:53:08
mouth test, it doesn't matter whether it's legal or illegal. It's [ __ ] up
00:53:12
and you'll realize that pretty quickly. >> Chimath, your thoughts on what we just
00:53:18
discussed and maybe a year from now, will any of this change? It is a crucible moment for American society.
00:53:28
If nothing happens and we deem this kind of theft acceptable, it is the beginning
00:53:35
of the end of the American Empire. It's just a level of disrespect and lack of care
00:53:49
for this country. I think so. I will be waiting and observing how important it is to root this out. That's number one.
00:54:00
The second, which is more tactical political calculus, this is an enormous opportunity
00:54:09
for the Republican party. If they take this and run with this, is there waste, fraud, and abuse in every state?
00:54:16
Absolutely. I don't think this is endemically a Democratic problem, but the scale of it is so gargantuan in
00:54:24
these Democratic states that if the Republicans don't take advantage of it, I think it is a huge political
00:54:33
miscalculation. So there is this tactical opportunity which I think if you want to have a chance in the
00:54:38
midterms and if you generally want to have a chance to level set the country you must take this
00:54:46
and run with it. >> Yeah. >> And separately if as Freebrook says it does die on the vine
00:54:53
it is the beginning of the end of the American empire unfortunately. >> Yeah. I was thinking the same thing as
00:54:59
you. These Democrats have nothing to hang their hat on. They have no platform. They're lost. They're a drift.
00:55:07
If you know, it's going to be impossible for Gavin to do this because there's
00:55:11
been so much corruption in California. But if he did, theoretically, Gavin Newsome, Josh Shapiro, Pritsker, if they
00:55:17
came out and said Elon was right, Doge is the right idea. We should take what Elon did and we should take every
00:55:25
agency, audit them, and we should prosecute anybody and fire anybody who's incompetent, prosecute anybody who's a
00:55:31
criminal, and we should cut these programs, you know, 10% a year for two or three years and tighten them up and
00:55:38
make them perfect for the American people so we can lower taxes and we can provide better services. And that's my
00:55:44
platform for 2026 and 2028 for president. that is going to be the easiest path to victory and rebooting
00:55:52
the failed dopey Democratic party. >> Yeah, I think you're you're right, Jay
00:55:56
Cal. If the message from both parties is enough is enough and let me just end on
00:56:00
an optimistic note and they say enough is enough. We've seen it. It's staggering. We are going to fix it. That
00:56:09
is the party's message. That is the country's message. That is the government's message. Whether they're
00:56:14
holding hands or yelling across the aisle saying, "We're going to fix it."
00:56:16
No, we're going to fix it. It's an opportunity. And the reality is if the
00:56:21
fraud, waste, and abuse is of the scale that it seems it might be based on what we're just seeing with the tip of the
00:56:26
iceberg here, then there is a very significant opportunity for us to significantly reduce government spending
00:56:32
and get out of the debt spiral at a federal, state, and local level. If it is this easy to just stop this sort of
00:56:38
[ __ ] and you could actually save trillions of dollars of wasteful spending, we could be in a very good
00:56:43
position with a growing economy. Here's why I think it will actually happen.
00:56:49
I'll build on something that Freeberg and I talked about over the holidays last week. We were talking about all of
00:56:56
this fraud in California and he said, "Chimmoff, mark my words, wait until the
00:57:01
bond market sniffs out how fake and propped up the California economy and balance sheet and pension system is."
00:57:11
and he said, "You're going to see these bonds run because those folks don't care
00:57:17
about anything other than the ones and zeros of their own financial survival."
00:57:22
I completely agree with that. So, if you take that to the limit, the optimistic part of this is that now that this is
00:57:32
being exposed, you are going to see risk get repriced. And if risk gets massively repriced and
00:57:41
MUN [ __ ] the bed and a bunch of state bonds [ __ ] the bed and a bunch of these
00:57:46
issues get broken, these folks will have no choice except to run and hide and cover their ass
00:57:53
>> and and that is a very and by the way so that falls on the feet of a lot of
00:57:57
people outside of the United States who when they see this issue will have a lot
00:58:02
less tolerance even if Americans may not run to solve it. So the good news is that there is an overwhelming
00:58:10
amount of debt in the United States. There is an even larger amount of debt that's owned by outsiders
00:58:17
and those folks fortunately I think will have zero tolerance for this. They will
00:58:22
want their debts paid back. >> This is so key because mun bonds have been the tax-free stable. I mean I've
00:58:29
tra >> tax advantage but not for much longer. If you if you know that this is
00:58:33
happening >> yeah if you break munis >> you can't underwrite this. I mean what
00:58:36
happens to bridges and schools and all these in order to build infrastructure you need these mun bonds to work and it
00:58:44
all starts with three words Elon was right that's why I said at the beginning
00:58:48
the first Democrats to say Elon was right they are going to win the prize if you don't say that you don't win the
00:58:53
prize >> I don't think they're going to say that >> those are wonderful sentiment those are
00:58:58
wonderful sentiments Jay Cal >> but Democrats can't do that look Democrats denouncing government waste is
00:59:04
like Don Corley Leon denouncing the mafia. Okay. >> It's a myth. It's an urban legend.
00:59:11
>> No, that is what they are. It's not like it's like >> the Democrat party is the party of
00:59:21
government waste and spending tax. It's the party of government, okay? And they
00:59:25
just want the government to be as large as possible. And if a big chunk of that goes to fraudsters, so be it. You know
00:59:31
what? Those fraudsters are donors, too. And that's the issue here is this is all
00:59:36
just political patronage. So yeah, you know, it would be a smart strategy for some Democrat to say the words that
00:59:42
you're saying. And in fact, Roana just did. He said, "I support having an
00:59:46
investigation to root out government inefficiency." >> Perfectly to our next story. Thank you
00:59:51
for the master. >> I don't I don't believe them. I don't believe them because they are the party
00:59:55
of government. And so and it's the Republican party when it functions well >> is the party of the people,
01:00:01
>> right? It's a party of everyone else. >> No. When it functions well, it's the
01:00:06
party attack comes from the rich. And Trump marshals that populist energy. >> So, it's got to come from the
01:00:12
Republicans may not deliver. >> I'm not saying the Republicans are perfect, but the Republicans, let me
01:00:18
just explain to Marshall that populist energy. >> Okay. Go ahead. >> The Tik Tok of this is you have all this
01:00:22
fraud. >> Let's say in California >> or Minnesota, you're going to bury it.
01:00:28
Okay. Per Freeberg. Nobody wants to do anything. They want to just sweep it under the rug and keep it going. Okay,
01:00:34
the fraud needs to keep going. The deficits keep growing because again, it's fraudulent, right? You're not
01:00:40
accomplishing your goals. You keep raising taxes and eventually people start leaving. First, it's the people
01:00:47
that can leave, then it's the people that must leave, and then you have whoever is left over left over. Now your
01:00:54
tax roles actually start to shrink at some point and your deficits start to become bigger and bigger again because
01:01:01
you've decided to not root out the fraud. The bond market will look at that and they will throw up in their mouths
01:01:08
first. So they will pass the throw up in your mouth test that Freeberg talked about and then they are going to down
01:01:14
the throat of these state balance sheets. That is the technical term that I want you to understand down the
01:01:22
throat. And what that means is that the 401ks and the pension systems that all rely on these mun bonds and all these
01:01:31
tax advantages to actually generate yield will start to turn and it will be the fault of these politicians who let
01:01:39
that happen. And what I am warning all of the governors and all the politicians that
01:01:46
listen to this pod is you need to get in front of this issue because even if you
01:01:50
think the voting population will not force you to do something, the financial markets will. And now that they seen
01:01:58
this, they will not stop. They will repric and repric and repric this risk until they get you to capitulate.
01:02:06
California has half a trillion dollars of bonds outstanding and the state of California is looking at an 18 billion
01:02:14
dollar deficit. They're going to continue to issue bonds over the next year. That number is going to climb to
01:02:18
30 billion. So, the bond market is crucial for California to continue to operate. This is the world's fourth
01:02:23
largest economy, the state of California, and it is already in a bit of a fiscal bind. Not to mention what
01:02:30
we've talked about in the past, which is the looming pension obligations. The
01:02:34
state of California is going to have to borrow somewhere on the order of another, this is going to sound crazy,
01:02:41
half a trillion dollars plus in order to pay out their current pension obligations. How the hell is that going
01:02:47
to happen? The US government will give it to them. That's it. That they're
01:02:51
going to go to the Fed. Obviously, they're going to try to get bailed out, which is what the states always do. Just
01:02:56
go for the bail out. >> My point is the pressure the pressure is on. And I think Chimath is is right that
01:03:01
this market is going to start to basically put pen to paper on the reality of how things are operating.
01:03:09
It's not just going to be >> And by the way, we're about to light the
01:03:12
spark, which is the billionaire tax act. Once the BTA, if it gets on the ballot and gets passed, it lights the spark on
01:03:20
the death spiral of these states. >> Right. Yes. >> Yeah. I think you're all right. I think
01:03:24
you're all right. And I think Jay's right about you. Look, California, Illinois, New York, these states are all
01:03:29
in a death spiral. They're all in the process of collapsing. And they will try
01:03:33
to get bailed out by the feds. That's their only potential savior cuz they're
01:03:36
not allowed to declare bankruptcy. By the way, that would be a good thing if states could declare bankruptcy so you
01:03:41
could unwind some of these crazy obligations they've taken on. But you can't do that. So, they will go to the
01:03:47
feds. And I think they're all just trying to hold on until they can get Democrats elected back in Washington. So
01:03:55
2028 will become a very very important election because this going to determine whether these states have to finally
01:04:02
make ends meet or whether they will basically just try and federalize their problems.
01:04:06
>> No, the bill always comes due. That's the truth. The bill always comes due.
01:04:09
>> I've gone through that scenario analysis with a bunch of macro folks and a couple
01:04:14
of external central bank folks. That's not going to happen. And the reason that's not going
01:04:20
to happen is then you'll see a 20 to 30% of the bond buyers just leave the US
01:04:24
bond market. And so you will have auctions that start to fail. This is what I'm saying. There is no way out for
01:04:30
these states. If the states think that they can fail and they will federalize it, that's not going to happen. Because
01:04:35
once whoever is the then sitting secretary of the Treasury starts to call and says we're going to run this
01:04:41
auction, they are not going to like what they see. And the reason is because of what Nick Shirley has exposed. Because
01:04:48
everybody will go back to this and say, "Hold on a second. If you could have cut
01:04:51
20 to 30% of all of your budgets over the last 10 years, that's 25 or 30 trillion dollars you could have used to
01:04:59
pay down your debts and you chose not to and now you want to come to us." So I
01:05:03
just think that it's an untenable situation. The dollar will basically have decayed in that entire process
01:05:08
another 90%. So, whoever is sitting in the seat of government at the federal level will not be able to do anything at
01:05:16
that time. That could be 28, it could be 32, it could be 36. My point is, this is
01:05:22
just a wakeup call for America. We don't have a choice. As much as you thought
01:05:26
you could hide it, you can't hide it anymore. So, you're just going to have
01:05:29
to clean it up. >> Do you think that Gavin Newsome will cut $1 of state spending? I don't think so.
01:05:34
>> No, no, no. I'm What I'm not I'm not I'm not saying he will cut a single dollar
01:05:37
of it proactively. he will try to keep the gravy train going growing. What I'm
01:05:40
saying is whoever is the then secretary of the treasury, if somebody goes bankrupt at the state level and they ask
01:05:48
to federalize the debt, what he or she will do is sensitize the United States balance sheet to absorb that and then
01:05:55
have to go and see who's willing to buy the debt of the United States of America
01:05:59
to backs stop that. What I'm saying, David, is that's when it fails. >> That's your prediction. Yes. And it
01:06:03
makes sense. Yeah. >> I think that these scenarios can be run now. And I think that that's why it probably
01:06:11
makes sense for the Federal Reserve and all these folks to basically write the white paper now that says we're not in a
01:06:17
position to do it. So the states get the memo. >> This is all going to require
01:06:22
somebody to get elected who has the platform of austerity and fiscal responsibility. And
01:06:29
>> you don't need austerity. These programs can work. Stop pilfering and stop
01:06:34
stealing. >> Number one, it's >> be competent. >> Yeah. But it's going to require a
01:06:39
message to the American people, Chimath, that I am not going to allow not only fraud, which people agree on, but we're
01:06:44
going to need to have some level of austerity as a country. And nobody has gotten elected on that.
01:06:49
>> You don't need austerity. >> You need fiscal responsibility. I do
01:06:52
think that is different than austerity. You don't need to cut these programs.
01:06:56
These programs don't work. They don't work because everybody's stealing all
01:06:59
the money. Why don't you first spend the money for what you told us you were
01:07:03
going to spend it on when you asked us to give you the money and forced us to give you the money, then measure it,
01:07:08
then tell us it's not working and before you ask for more. >> I mean, I I I think this is the core of
01:07:14
this issue is going to be can somebody get elected on the platform of fiscal responsibility and nobody has been able
01:07:20
to. I will say this, we did have, I think, a bit of impact on this podcast when we kept harping on, you know,
01:07:28
lowering the deficit. Even though that hasn't happened, it's still top of mind
01:07:32
in the country. And I think putting above that, my number one issue going into these elections going to be who is
01:07:39
Doge positive and will run Doge at all levels of government. If you're not willing to say, I attack fraud first and
01:07:45
then second, balancing the budget/reducing the deficit, then why are you even running for office now? You
01:07:51
have to do those first two things. If you don't do those first two things, everything's ex existential from that
01:07:56
point on, which leads to our next story. >> Well, I hope you can admit that closing
01:08:00
the border was a big win in this regard. >> 100%. like that was long overdue and I
01:08:05
was wrong about how many people were coming in because it made no logical sense to watch it go like this and my
01:08:11
hand is going straight across at a million a year or so and then pop up to three or four and there was no data to
01:08:17
support it other than people sharing random clips which I don't trust. The the border problem has exacerbated this
01:08:25
massively because there are some there are states giving entitlements to people who are here illegally. That's insane.
01:08:32
And if we want to maintain a low unemployment rate while jobs are displaced, the best way to do that is to
01:08:39
shut the border and not let more people in because they're going to take jobs,
01:08:42
obviously. So, that actually could be the mitigating factor in all of this. And it's probably the I would say that's
01:08:47
the topic that got Trump elected. Uh the number one reason Trump got elected is because Biden was a was is scenile. And
01:08:54
the second is because Kamala was an idiot and couldn't even debate. So you take those two things together, you
01:09:00
know, the third issue was obviously immigration. Okay, but we have to get on to this next story because I don't want
01:09:04
to run out of time for it, which is California wants to do an act called BTA. This act stands for Besties to
01:09:13
Austin. This is the Besties to Austin, and it's marked. Two of four besties, I
01:09:21
believe. >> Well, no, no, four of four. The other two are actively looking for houses. We
01:09:26
just haven't. They're circling. They're They're in India. >> We haven't found something we like. I
01:09:30
don't want to say where I'm living, but >> Okay. Besties to Austin,
01:09:34
boys. Let's go. Ride them, boys. There's the four of us on horses. Let's go. Let's get some Terry Blacks.
01:09:47
Oh, man. Sax and I Terry Blacks eating beef ribs with our shotguns and our pistols. It's going to be a good time.
01:09:53
Let's go. Uh anyway, we brought this up back in October. A lot of people taking
01:09:57
victory laps. U but we got on this first. This tax for billionaires is going to target residents with over a
01:10:03
billion in net worth. The history of this is really interesting. Freeberg, why don't you walk the all-in audience
01:10:10
through how this came to be? So, California has a direct democratic ballot process. So anyone can file for
01:10:19
something to go on the ballot and it allows them to get around the state senate and the assembly and basically
01:10:25
allow the citizens to vote directly on an issue. When they make a filing, it costs $2,000. Anyone can file for a
01:10:31
ballot measure and then you have to go collect signatures and you have to collect roughly 900,000 signatures. Once
01:10:37
you've collected those signatures, it makes it on the next ballot. The state
01:10:40
attorney general looks at it to make sure that it's legally compliant and so
01:10:43
on. They write their summary of it and then it makes it on the ballot. people vote for it and if it votes it passes.
01:10:48
So in this particular case, the billionaire tax act as it's titled which is likely going to get retitled when
01:10:54
it's finally filed for people to review is a 5% tax on the assets of anyone that's got a net worth over a billion
01:11:03
dollars. It was proposed by a guy named Dave Rean who runs SEIU which is one of the unions in order to make up for the
01:11:10
healthc care shortfall that his members are going to be experiencing. So, this was not a broad
01:11:15
coalition that filed this. This is not filed by the state. This is not filed by anyone in the Assembly or the Senate.
01:11:21
This is one individual at one union that's put it forward and is now trying to collect signatures to get it put on
01:11:26
the ball. >> To be clear, I just want to read it back to you. It's a union leader who has a
01:11:30
shortfall in health care for some number of members. I don't know how many members are in that union. and they just
01:11:36
came up with the idea, people hate billionaires, we'll seize their money, 5% of it, to get health care for our
01:11:42
members of this very specific union. >> And the truth, the truth is it's
01:11:46
actually been set up as a negotiating technique. So, it's primarily it's it it
01:11:51
may be. Yeah. I mean, look, there's a momentum behind it at this point, but it's fundamentally a point that creates
01:11:56
leverage that allows this individual to go out and negotiate with other parties to try and find a way for this money to
01:12:02
show up so that he can reduce the healthcare costs for his members, which is what his objective is. And this is
01:12:08
the way the direct democratic process works in California. Now, it's not the
01:12:11
first time a wealth tax has been proposed in California. And I want to be really clear on this. I think this is
01:12:15
very important for everyone to understand. Forget the term billionaire. Forget the term wealth. What we are
01:12:21
talking about and this is now being proposed in multiple places in the United States and there's also a federal
01:12:26
bill being proposed several federal bills that have been considered. We are talking about for the first time a tax
01:12:33
on individual people's private property not on your income. So the way taxes
01:12:38
work today is when you earn income either via labor so you collect a paycheck or via the sale of an asset. So
01:12:46
you sell a house and make a profit or you sell a stock or bond and make a profit. You are earning income and you
01:12:52
pay a tax on that income and you only pay taxes when you realize income when you sell something or do work and get a
01:12:58
paycheck. So only when you get paid cash. So for the first time ever we are talking about placing a tax on people's
01:13:06
private property that hasn't turned into cash. For example, you own some real
01:13:10
estate, you own an apartment building. >> Well, I think it's worse than that. I
01:13:13
think it's worse than that because a lot of people were calling this an unrealized gains tax, but it's not an
01:13:17
unrealized gains tax. You could have realized, let's say, let's say that you
01:13:22
had just had a a big outcome >> and you sold your stock and you made a billion dollars. You were fully paid up
01:13:28
on all of your taxes. >> Let me Yeah, let me just say not even a billion dollars, right?
01:13:32
>> Forget about a billion. Let's say that this asset tax because in some cases
01:13:35
it's being proposed on anyone over 50 million or anyone over a million dollars
01:13:39
>> in the country and and wait a second. This story just got really important to
01:13:43
me >> in the country of and this is why this is such a principled discussion and I'm
01:13:47
trying to avoid this current California thing as the primary topic because there
01:13:51
are multiple of these being proposed around the country and they have been tried in the past. You sell a stock or
01:13:56
you do some work, you make some money, that money now sits in your bank account. You've paid your taxes on that
01:14:01
money. You sold your stock. You sold your house. You did your work. You got paid. You pay your taxes. After you pay
01:14:09
your taxes, the government comes and says, "Hey, how much money do you have
01:14:12
in your bank account? What's the value of your car? What's the value of the
01:14:15
thing that your grandma gave you? Give me the value of everything you have in your house. Add it all up and give me a
01:14:21
percentage of it." That's what this is. It's a private property seizure. It is a
01:14:26
seizure of your assets to pay a tax based on all the things you own, even if you've already paid your taxes on all
01:14:33
those things. Correct? Now, this has been tried and I'll give you guys a couple of
01:14:38
anecdotes about this. In France in 1988, 1989, they passed this millionaire tax.
01:14:44
Anyone with 1.3 million euro or greater net worth had to pay a tax of like 1% a year, 1 and a half% a year of their
01:14:51
total assets. And it raised 4 to 5 billion euro a year in new tax revenue. But what
01:14:57
happened?€200 billion euro of net worth left France and the total income tax went down by 8 billion. So they ended up
01:15:06
seeing a complete reduction in overall tax revenue for the country of France when they passed this. So by the year
01:15:12
2018, they tried to revamp it a bunch of times. They never got it to work. 20 years later in 2018, it got completely
01:15:18
turned off. So there's no longer this asset tax in France and that was a small
01:15:22
asset tax. The reason they're calling it a billionaire tax is to make it easier
01:15:26
for people to vote for it and sign up to this entirely new tax system that they're proposing to put on all
01:15:33
Americans at some point in the United States and for the first time ever degrading our private property rights.
01:15:39
Forget about how much wealth you have. Forget about how rich you are. Forget about the term billionaire, millionaire,
01:15:44
whatever it is. We're creating or proposing the creation of a new tax system that allows the government for
01:15:50
the first time ever to come in and audit everything you own. All the jewelry your
01:15:54
grandma gave you, all the value of all your couches in your house, the value of your car, the value of all your stocks
01:16:01
and bonds, and the government can now in and for the first time look through the
01:16:04
veil into your personal property and say, "Here's how much all this stuff is
01:16:08
worth. I'm charging you a percentage of that. That's what I need to get paid."
01:16:11
And it doesn't matter that it starts with billionaires. What matters is that
01:16:14
we're giving the government the right to look into our private property and take
01:16:18
a percentage of it every year, which is different than an income tax where every
01:16:22
time you sell a stock or bond or your house or get a paycheck, you pay tax, which is totally reasonable because all
01:16:28
of that is trackable and that's a transaction that's happening legally in
01:16:31
the public and so on. So, the government has a right to look at that stuff, but we're giving the government the right to
01:16:36
look into our private property. Now, I'll say another thing. It's totally
01:16:40
reasonable to say that billionaires aren't paying their fair share of taxes.
01:16:43
And it's totally reasonable to say that ultra high net worth people aren't
01:16:45
paying their fair share in taxes. They pay an income tax, but the truth is a lot of ultra wealthy people borrow money
01:16:53
against their assets and live off of that borrowed money so they never have to pay taxes by selling the stuff that
01:16:58
they own. That's the core fundamental issue that people are trying to address
01:17:03
when they say that folks aren't paying enough. And there's a simple way to
01:17:06
address it, which is to charge them a capital gains tax if they borrow against their assets that they haven't paid
01:17:11
capital gains tax on. Very simple that can resolve this. Another thing you can do, you can raise the capital gains tax
01:17:17
rate. Sounds unpopular. I don't agree with that, but that's another way to
01:17:21
deal with this, which is take the capital gains tax rate from 20 to 30. Make it sound more make it more like an
01:17:26
income tax. You could do that. And I'll give you guys another statistic. In the
01:17:30
state of California, these billionaires, there's 200 of them. The total net worth
01:17:35
of billionaires in the state of California is $2 trillion. So you're talking about raising hundred
01:17:41
billion on this onetime 5% tax or as Roano would say 20 billion a year. California is looking again at a $1.5
01:17:52
trillion liability hole that it's facing. Taxing billionaires doesn't solve any of our problems. We have more
01:17:59
fundamental problems with respect to spending and the overall debt levels that we've already taken on. And if you
01:18:04
tax billionaires of the whole country, let me give you guys the statistic on this. There's about 900 billionaires in
01:18:08
the United States. The total net worth of billionaires in the United States, $8 trillion. So if you took, let's say 1% a
01:18:16
year, every year you take 1% of the billionaire's worth, that's $80 billion
01:18:21
of income for the federal government every year. That will pay 20 days of interest on our debt. 20 days.
01:18:28
>> Yeah. The real money is in the middle class. The net worth of the United
01:18:31
States, the middle class, and everyone else is 170 trillion compared to 8 trillion of the billionaire.
01:18:37
>> They need a way to open the door so that they can go after the real honeypot. The
01:18:41
real honey. >> So the real the real goal of this, just so everyone understands, the real goal
01:18:45
of this is not to tax billionaires because there are other ways to tax billionaires. real goal of this is to
01:18:50
create for the first time in American history a private property asset seizure tax
01:18:55
>> and to use that as a way to take a percentage because they're going after
01:18:59
the they're going after the 170 trillion not the 80 trillion of the billionaire
01:19:02
normalize auditing every American to understand what they own and then take a percentage of it every year it's been
01:19:09
tried in France it's been tried in other countries it never works people leave
01:19:12
>> never worked it normally >> that's why this is so offensive why not
01:19:17
just raise as you said capital gains or an here. Yeah. >> The biggest lie in this whole debate
01:19:23
over this supposed tax is the term one time. They keep describing as a one-time tax. See, even you said a one-time tax.
01:19:30
It's not a one-time tax. There's no guarantee in the language of this ballot
01:19:35
initiative that they'll never do it again. They're not writing into the Constitution that, okay, we're just
01:19:39
going to take 5% this one time and then we're going to prohibit doing it thereafter. This is the first of many.
01:19:45
This is not a one-time tax. It's a first of many tax. It's a presidential tax and
01:19:50
like you said the goal here is to create a new I don't like using the word tax
01:19:55
because >> it's not it's it's a taking it's not based on >> income it is it's an asset seizure and
01:20:01
the idea >> property seizure system >> it's a it's a private property seizure
01:20:05
it doesn't matter whether the assets are realized unrealized whether you pay tax
01:20:09
to do it again >> but look the point is that it establishes a precedent that we can
01:20:14
define an arbitrary group of people and confiscate a bunch of their property because they're politically unpopular.
01:20:22
And if it succeeds here, it it will be replicated over and over and over again. And obviously, the line will come way
01:20:29
down below billionaires because there's not enough money there. 8 trillion out of 170 trillion of
01:20:35
assets. The billionaires aren't the target. At the end of the day, the billionaires don't make a dent. If you
01:20:39
took 1% of the billionaire's net worth every year, even if you took all their
01:20:42
net worth, you still wouldn't make a dent. You've still got 40 trillion of
01:20:45
debt outstanding at the federal level and we're adding nearly 2 trillion a year. It's not going to make a
01:20:49
difference. The impact is in the middle class. >> Let me tell you another lie about this.
01:20:53
>> That's where the money is. >> So when you got into that debate with
01:20:54
Roana, who by the way I think is actually very smart and as far as progressives go, I like him in a lot of
01:20:59
ways. But he was trying to frame this thing as oh it's only 1% right 1% a year
01:21:04
for 5 years. >> That was the first line. >> Yeah. And again this minimizing language
01:21:08
they're using 1% one time. They're trying to say, "Well, this is just an
01:21:13
insy beansy little thing." It's like, "We're only gonna use the pinky, not
01:21:17
>> not the fist, right? Uh, we're gonna use as well. >> Just the tip of the pinky."
01:21:23
>> This just the tip of the pinky here. >> Oh, too much. Too much. Too much.
01:21:28
>> Too much. No, the point is they're trying to minimize it because they know
01:21:31
that the real value here is in establishing a new precedent that now asset seizures are permitted and that's
01:21:38
the beginning of basically the government owning all of your property. In fact, all of your property is
01:21:44
effectively owned by the government subject to people thinking that you're a
01:21:50
good enough person that you should be allowed to keep your property. Because basically what they're saying is look,
01:21:53
there's an old line about democracy that democracy can't be two wolves and a
01:21:59
sheep voting on what they're going to have for dinner. In other words, people
01:22:02
have rights. And so you have the system of of democracy, but you also have this system of of rights. And those two
01:22:09
things go together. And so we have a bill of rights. We have protections. There's some things that a majority of
01:22:15
the population cannot take from you. A lynch mob cannot hold on. A lynch mob cannot vote to take your life. You have
01:22:22
rights. You have due process. >> I just want to make it clear. Look, I think what's going to happen is that if
01:22:28
people don't see the forest from the trees here and this thing passes, it's
01:22:33
going to get litigated because I think many of us feel that this is fundamentally
01:22:40
illegal. That's going to take 6 7 8 years to resolve itself. And I suspect that it will go all the way to the
01:22:47
Supreme Court. Let's just say that it does pass. The thing is, it's much
01:22:51
easier for 900 Americans to litigate in tax court that this asset was mispriced, that
01:23:00
other asset was mispriced, because you're going to be talking about big chunky things. But by the time that that
01:23:06
rule, if it's valid and it stands, legal scrutiny, rolls down the hill to 170 million
01:23:15
Americans, they're not going to be in a position to take it to tax court. And what's going
01:23:21
to happen is that there's going to be these frameworks and these actuarial tables and all these other things that
01:23:26
are set up that says, "Oh, you have a 2025 Lexus. It's worth this." and you'll
01:23:33
say, "But I don't think it's worth that. It's a little beaten up. I had a car
01:23:36
crash in it. You know, this and that. Sorry, that's the price." And you're
01:23:40
going to have no recourse. You live in a certain neighborhood. Your house is worth that. You have a certain asset.
01:23:46
Okay. Well, we think it's worth this. Your wedding ring, which is a class C diamond, it's worth this. And you'll
01:23:51
say, "But, you know, it's kind of nicked and it's not." Sorry. And when you
01:23:55
multiply that by 170 million people, there is no recourse. And now you have this level of taking
01:24:04
which is just I think egregious. And then on top of that, what are you actually taking it for? Because we've
01:24:10
now just already proven that you can't spend properly what you're already being
01:24:14
given. And you're creating some kind of corrupt money wheel, but you're going to
01:24:19
create this another avenue of just taking more and more and more. I think it's crazy. And the fact that this story
01:24:27
broke the same week that you had this California state auditor released a 92page report that over $70 billion in
01:24:34
taxpayer funds had been quote lost. I think that's a euphemism for stolen. It
01:24:40
can't be accounted for, you know, and this includes things like the 24 billion
01:24:43
on homelessness, the 18 billion for the highspeed rail where not a single track has been laid, 2.5 billion for snap
01:24:49
fraud. I don't even think this includes the 30 >> that 72 billion would have paid for the
01:24:54
healthare and it would have plugged the deficit >> and that's kind of where I was going
01:24:56
>> just by not allowing it to leak out. >> And that's kind of my point. But it's
01:25:01
politically easier to say that you're going to plug this hole by confiscating
01:25:07
the wealth of an unpopular group or a group of people that you can demonize as opposed to actually making the
01:25:12
government more efficient. Because again, every single one of those fraudsters who receive the government
01:25:16
payment, they're basically a political supporter. I mean, those people don't
01:25:20
get chosen by accident, right? It's a patronage system and they're the ones
01:25:24
who are part of the Democrat machine. You know, this homelessness industrial complex and all the rest of it. So,
01:25:29
they're never going to see cuts. And by the way, the only reason this hole happened, this cut, if you want to
01:25:36
call it that, is because in Big Beautiful Bill, it said that you can't use federal Medicaid funding anymore for
01:25:42
illegal aliens. That's the origin of this whole thing. That's why they're
01:25:46
trying to plug this hole. But look, this is why these deep blue states are fundamentally broken and probably
01:25:52
unfixable. I don't want that to be the case. But Sax, is the Trump administration or Congress, if that's
01:25:58
what it's going to take, going to be able to get legislation passed or an order passed that will allow for
01:26:06
bankruptcy of states? Because some people, I think you've mentioned this, but some people have suggested that
01:26:10
that's going to ultimately be a path to resolution on the bad fiscal condition
01:26:15
that these states are in and will allow them a way to kind of crawl out of the holes with respect to all the
01:26:19
obligations that they've accured that they can't actually pay for. >> I just don't know. I mean, I I think
01:26:24
it's a great idea. I think that states should be able to declare bankruptcy. I
01:26:27
also think that if states go broke, there needs to be a way to put them in some sort of receiverhip, right?
01:26:32
>> They're not allowed to today, right? There's no mechanism. >> Yeah.
01:26:35
>> I don't understand what happens when a state goes broke, which these states are
01:26:39
on the verge of of being. So, I don't know what happens. But, you know, to get
01:26:44
something like that passed, either you do it through reconciliation, get 50 votes. Maybe that's possible. But, I
01:26:49
don't know. I haven't heard a lot of conversation about that in Washington.
01:26:52
Not yet. But it should be on the docket. If anyone's listening, I think it's a
01:26:57
good thing to start thinking about. >> You have the ear of certain people that
01:27:00
might be able to do something about it to keep us posted. >> Just to uh do a little self-reflection
01:27:05
here. I always like to think why or how did we get to this billionaire's tax?
01:27:11
And I think the fundamental issue is that people really don't feel safe in this country when it comes to healthcare
01:27:18
and housing. We heard that come up with our guest earlier. He said, "None of my
01:27:22
friends have a home." And then obviously we hear it come up all the time with,
01:27:25
"Hey, can I get some forgiveness for my student loans?" But just looking at
01:27:28
healthare, the fact that the United States does not have universal house health care is complete disgra. There
01:27:34
are 80 countries in the world that have it. We are the second biggest economy in
01:27:40
the world. We are the leader of the free world still to this day. The fact that we are so polarized as a country and we
01:27:46
have so much fraud as a country that we can't solve something as simple and basic as universal healthcare that is
01:27:52
the root of this evil and I think the technology industry has not participated in universal healthcare but there is a
01:27:59
solution to it and I think if we as very affluent people and as leaders cannot come up with a way to give the poorest
01:28:07
people in this country and this is not virtue signaling this is just catching up to the modern world where people can
01:28:13
feel some base level that they can go and get healthcare. We're going to continue to see people go to a
01:28:20
billionaire's tax. We're going to continue to see people like, you know,
01:28:23
the CEO of United Health get murdered. That's where this is coming from. There
01:28:27
is a deep fear in poor people, in the lower classes in this country that feel like, hey, if I get sick, I could go
01:28:35
bankrupt. We must solve this problem. And it's become such a political hot potato that there's no creativity.
01:28:41
There's no plan. It's just fighting and Obamacare is terrible and you know back
01:28:47
and forth. That's what needs to be solved. I don't know which politician is
01:28:51
going to be able to create some unity on this entrepreneurs >> as poor people get incredible
01:28:55
healthcare. It's the middle class that gets screwed over. >> Okay. The the people in this country
01:28:59
still feel fear that we don't have universal healthcare. And if we solve this problem, I believe that a lot of
01:29:05
this resentment >> the problem is the middle class is getting squeezed because the price of it
01:29:09
keeps going up because Obamacare did not bring down the price. It made it more expensive.
01:29:13
>> Yeah. So what's your solution? >> You keep wanting to give away for free.
01:29:17
>> I know you guys can criticize it. What is your plan? What is your plan for
01:29:21
doing? And you don't have to give it to me now, but I think as an industry, we
01:29:25
represent the technology industry here. Sax, you represent uh the 47th administration in some way. You're part
01:29:30
of it. We need to come up with a plan for America. >> If you look at healthare just as an
01:29:36
example and you can graph it, there was a trend line in the cost of healthcare. It was going up. And to your point,
01:29:42
which is fair, under all administrations, we had not yet cracked that code. Okay. But there was something
01:29:48
that was massively discontinuous that happened in Obama passed in 2010, implemented in 2014. And what was that?
01:29:55
Obamacare had this one incredibly fatal flaw, which I still cannot understand how these folks did not understand this.
01:30:02
They cap the gross margin. Some people at the extremely high level would say, "Well, that makes sense." Except it
01:30:09
doesn't because then how you make more money is by just charging more. If you
01:30:13
can only make 15%, instead of making 15% on $1,000, you'd rather make 15% on
01:30:19
$10,000. That is what's happened. It has just gotten steadily up up up up and then the
01:30:26
quality has obviously decayed. So if we're going to unwind this, we need to unwind the gross margin caps that exist
01:30:33
in Obamacare and try to wind these cost curves back to normaly. >> Frag if we look at ourselves globally.
01:30:41
I'm curious what you think. Actually, hold on. Let me just >> You mentioned 80 countries that are
01:30:46
supposedly better than us. Would you want to have surgery in any of those countries? Just wondering.
01:30:50
>> Oh, for me, I'm rich. I can do whatever I want. I would go to the best place.
01:30:54
And if you look at Americans, >> in your view, >> absolutely America.
01:30:58
>> Oh, unless it was plastic surgery, then South Korea. >> Yeah. But
01:31:03
>> so these 80 countries supposedly that have figured it out somehow the healthcare you would not want to go
01:31:08
there for. >> No, no, >> just wondering. No, I'm just wondering >> if if you looked at the price to value,
01:31:14
which is the point I was about to get to, >> where would you get your next
01:31:16
proctologology exam >> on the All-In podcast? They have to remove a gerbble from your ass. Where
01:31:21
are you going? >> I would go to you. You seem to have the most experience.
01:31:26
>> I would look to you for a referral. Sax, where did you get your stuff? >> Good sir.
01:31:31
>> But the point is, let's get serious. I No, I want to finish my thought. Thank
01:31:34
you. If you look Freeberg at the cost here, knee surgery in the top five uh you know health care providers that have
01:31:43
countries that have universal healthcare, it's six to eight times more for bypass surgery, four times more for
01:31:50
a knee replacement. You know, just getting an MRI is 5 to 10 times more than the United States. Obviously,
01:31:56
there's some problem here with where we're paying a lot more than everybody
01:32:00
else and we're not getting 5 to 10% more. What do you think if you had a creative solution? If you put your great
01:32:08
entrepreneurial mind to this, how do we solve the problem of America not having universal healthcare?
01:32:15
>> I'm not the guy to answer that question. >> AI jali, >> there are people there are people that
01:32:19
study this and >> is going to solve all these problems. >> There are a lot of proposals out there.
01:32:23
>> This I want to throw up this one chart because I do think this is our politics
01:32:26
in a nutshell. >> Here we go. >> Someone had this great tweet. I've got
01:32:29
to just show this and then we then we got to move on. But the the people who created the red lines are blaming the
01:32:36
people who created the blue lines. This is our politics in a nutshell. >> Yeah.
01:32:39
>> So look how the the issue with the more the government gets involved and I agree
01:32:44
you got to have healthcare for poor people. I understand >> but the more the government gets
01:32:47
involved in healthcare the more expensive it gets. And the same thing for college tuition and every other
01:32:52
category >> sack. What would you do? >> Well I mean look you got to have market
01:32:55
forces. That's what that chart shows is that where you have the most market forces, which is technology,
01:33:02
>> that's where you have continual quality improvements and price decreases.
01:33:06
>> And while that's happening, the people who create the red lines, basically the
01:33:09
people who create this out of control fraud and corruption and cost problem, they're the ones attacking the people
01:33:17
needs to attack this with innovation and marketplace dynamics and get the government out of it. That's the
01:33:22
solution in part. It's a solution >> in part. >> That's what I'm trying to get across
01:33:27
here is that we are actually our industry is uniquely qualified to lower costs and create marketplaces and
01:33:33
competition. I would like to inspire our industry to maybe get back on this. I know that none of us do it because it's
01:33:38
the hardest castle to take, but we could as an industry, I think, have a dramatic
01:33:43
impact on this, just like our friend from Spotify, Daniel, is, you know, doing his 3D scanning and then you have
01:33:49
function health superpower. Tons of these companies trying to get self-directed healthcare going and lower
01:33:55
costs. Anyway, we have one thing we need to get to here on the docket, which is a
01:34:00
victory lap for our bestie, Chim Poly Hapaya. This week, Nvidia entered into a licensing agreement to uh license
01:34:09
Brock's technology for inference chips. Chamath was the backer of this company
01:34:16
for close to a decade and um had to come rescue it a couple of times. It was a brutal non-conensus bet. Uh you invested
01:34:25
in Grock essentially formed the company with your partners 5 years, 6 years before chat GPT even debuted. So this
01:34:33
was a visionary thing to do and it was a hard bet and so congratulations from one
01:34:38
Bessie to another on uh this incredible non-conensus bet you made Chamath but maybe take us through a little bit of
01:34:45
the backstory. We started the business 10 years ago and the whole idea was just observing that there is these patterns
01:34:56
that was happening inside of AI that we wanted to be ready for. And I think that
01:35:01
this is going to be really important over the next 5 to 10 years. So to the extent that you're either a technologist
01:35:06
or an investor, let's just take 30 seconds. So in a world of kind of these LLMs, there's two terms that I think
01:35:13
you're going to hear a ton about over these next few years. The first term is
01:35:16
prefill and the next is decode. Gavin Baker had an excellent tweet that broke this down. Nick, you can include that in
01:35:22
the show notes. What prefill and decode are is two very distinct ways of how models think and how a model goes
01:35:30
through the process of answering a question that you ask it. And so when you send a prompt to AI, what happens is
01:35:37
that the model processes it. This is called the reading phase or prefill. It reads your entire prompt all at once and
01:35:43
then it does a bunch of math. Okay? Calculates all these relationships between all the words and it stores them
01:35:48
in temporary memory. The problem is that this is really compute bound. So it requires massive
01:35:55
brute force and NVIDIA GPUs crush you and their architecture is designed for massive parallel processing which makes
01:36:02
them really amazing at digesting these long prompts, right? And Sax and a bunch of other people have talked about
01:36:08
context windows growing and growing. So the problem just gets bigger and bigger.
01:36:11
Nvidia just completely dominates. But the next phase though, this critical phase, the decode phase is the writing
01:36:18
phase, right? So the model starts to generate a response. You ask it a question and its response one token at a
01:36:26
time and then to pick the next token to pick the next word it has to look back at everything it has said already so
01:36:32
that it doesn't hallucinate. The problem is that this is incredibly memory bandwidth constrained. The math
01:36:39
of all of this is easy but then you got to do all of this nonsense. Imagine like
01:36:42
a building and from getting from point A to point B, you got to take an elevator,
01:36:46
go up to the 10th floor, take the next elevator, go back down to the ground floor, then walk across. That would
01:36:50
never make any sense. You'd want to just walk across the hallway, right? And in
01:36:55
our architecture a long time ago, we made these design decisions from day one. We said, you know what, there's an
01:37:02
entire technology stack that Nvidia and Google have pioneered. If we try to go and build a building that looks like
01:37:10
that, we will fail. they're too smart, they're too capitalized, they're too
01:37:14
good, they're too big, they'll get the best deals, and we'll just be shut out.
01:37:18
And so what we did was we took a very different architectural approach. We took a very conservative process
01:37:24
technology. We weren't pushing the boundaries of physics and we used a lot of what's called SRAMM, so memory on the
01:37:31
chip so that we could do this decode thing as well or better than everybody else. And so now when you put these two
01:37:37
things together, I just think it's going to create a huge acceleration in the ability for this entire
01:37:46
infrastructure layer to get much cheaper and much more valuable, which I suspect
01:37:51
then it'll have a lot more developer pull. You'll get a lot more applications
01:37:56
being built, billions and billions of more people using it. So think about it as pre-filled decode. We were really
01:38:04
great at decode and I think partnering up was the strategic rational. And so essentially what happened was last May
01:38:10
Nvidia announced this thing which allowed their chip to talk to other things and our team reached out and said
01:38:17
hey can we experiment to see if our chip could talk to your chip and we could do
01:38:22
this thing better. And over the summer there was some kind of like spreadsheet work that happened. Then they were
01:38:30
interested enough where they were like, "I'll give you a couple engineers." And
01:38:32
Jensen was kind of curious about it. And then about a month ago, he and I had a call on a Saturday and he's like, "I
01:38:40
think this thing is really real." And I called Jonathan and Sunny right away and I said, "You should be prepared
01:38:47
that if this thing works, there's going to be something interesting to be done
01:38:49
here." And one thing led to another and they acted decisively. Here's what I'll
01:38:53
tell you about Jensen. to seeing a little bit up close. He is operating at a level of insight about what's
01:38:59
happening in this industry that I've really never seen with other folks in other industries other than Elon in his
01:39:04
industries. It's a level of mastery and a level of skill that is really impressive.
01:39:11
Obviously, it's a really big deal and I'm really thankful to have been a part
01:39:15
of it. Yeah, it's great. >> Slack 25 billion, Grock 20 billion. Two incredible
01:39:20
>> but Slack we sold to Salesforce. The thing with rock is I just think that it
01:39:24
wasn't a point product. I think what will happen here is if successful we will be a foundational layer that Nvidia
01:39:30
can use to again make AI much more accessible, much cheaper, much more beneficial to everybody.
01:39:36
>> Was there a point just as a capital allocator, as an entrepreneur, which I
01:39:39
consider you very entrepreneurial in the case of Grock, >> that this looked like it was going to
01:39:44
get not make it because we went through co we went through things and and >> years first eight years. I mean look,
01:39:51
Jonathan is a genius. I said this on X of biblical proportions. His vision for the V2 chip, V3, V4 chips. He is a
01:39:59
volcano of technical creativity, a true volcano. He was the inventor of TPU at Google. There is very few people like
01:40:06
this in Silicon Valley or the world. >> Savant, >> but he's not a Savant. I just think he's
01:40:12
incredibly brilliant. Okay. So if that road map can be married with Jensen's
01:40:17
brilliance, I think that like I said it'll be hugely beneficial for AI in general. And then separately though two
01:40:23
years ago they acquired definitive and we were able to bring one of our other besties Sunonny Madra in as president
01:40:30
and I think the combo of those two Sunny's team which are very practical kind of like put your head down go to
01:40:36
market technologists plus Jonathan's vision and technical brilliance frankly
01:40:41
allowed a lot of this to happen. It wouldn't have happened without those two
01:40:44
working together. >> Well, congratulations. It's awesome to see you get a win.
01:40:47
>> Yeah. I'd like to I'd like to say a couple things to a couple of people.
01:40:51
>> Yeah, you do. Absolutely. It's like the my ostensible, you know, you got
01:41:08
okay to number two to the VC community. You can also number three. I have a message to all
01:41:33
the people on social media, Reddit. You can also >> now the audience knows what it's like to
01:41:41
lose a huge pot. >> Yes. Wow. For your turn, B for your pre. >> He's a sore winner. He's a sore winner.
01:41:51
>> Winner loser. >> He doesn't give a speech when he loses like Helmouth. He gives a speech when he
01:41:56
wins and he berates you. >> Yeah. >> And how stupidly you played the hand.
01:42:01
>> They were terrible. And I hit my TWO OUTER. LIKE LITERALLY Grock was a two
01:42:05
outer. He bakes it and he's like, "I TOLD YOU IT WAS COMING. SO MUCH FOR YOUR
01:42:11
NUT FLUSH." >> All right, boys. >> All right, everybody. This has been
01:42:14
another amazing episode of the All-In podcast. We'll see you next week for our
01:42:18
prediction show. Sorry it got delayed. We just had too much on this document. Love you besties.
01:42:23
>> We'll let your winners ride. We open sourced it to the fans and they've just gone crazy with it.
01:42:35
>> Love you. Queen of >> yours. Besties are gone. >> That is my dog taking your driveway.
01:42:51
>> Oh man, myasher will eat me. >> We should all just get a room and just
01:42:55
have one big huge orgy cuz they're all just useless. It's like this like sexual
01:42:59
tension that you just need to release somehow. >> That's going to be good. We need to get
01:43:08
merch. >> I'm going all in. I'm going all in.