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Republicans are working hard on the big
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beautiful bill. The Trump bill would
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extend the 2017 tax cuts and jobs act
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through 2034. That's kind of the big
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piece here is these tax cuts. And
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there's a bunch of campaign stuff like
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no taxes on tips or overtime things that
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Trump promised. And the Tax Foundation,
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this is a nonprofit that analyzes tax
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policy, estimates the tax cuts would
00:00:22
reduce revenues by 4.1 trillion over 10
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years. That's 400 billion a year. And uh
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the bill also aims to cut 1.5 trillion
00:00:30
in spend over the next decade. Some
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Republicans think this is weak and are
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pushing for 2 trillion in cuts or more.
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Freeberg, you actually I understand from
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our group chat did a deep dive here and
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you I think are responsible in many ways
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for bringing the issue of our national
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debt to the forefront especially
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particularly with this administration
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and doge which we give you a lot of
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credit for you being a single issue
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voter for this. Are you worried about
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the budget now? We're we're 100 plus
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days into Trump. Do you think he's got
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any chance of cutting the deficit? I'll
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talk about the House tax bill, which I
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think is to use your term Jal absolute
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discard.
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I uh bill
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is a bill is a disc. Wow. It is absolute
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discard. If you're an American, you
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should feel shame that your elected
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officials are proposing that this is the
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bill that gets passed, that we vaporize
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this much money, that we put ourselves
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this much further in debt, that we do
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not treat this situation as the fiscal
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emergency that it is. The bill
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ultimately yields no real change in the
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annual deficit. that the annual deficit
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could climb to
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$2.5 trillion being added to the federal
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debt load every single year going
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forward. In fact, if you look at the
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Treasury yields, the 30-year is now
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kissing
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5%. So, the United States has called $
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37 trillion of debt. At 5%, we're paying
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close to $2 trillion a year just in
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interest on our debt. As this debt gets
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refinanced, the interest rates are going
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up because the probability that the US
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will default on its debt payments, which
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is what you're buying when you buy US
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treasuries, you're getting the US
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government to pay you some number of
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dollars with interest over time. And the
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market is now demanding that that
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interest rate be as high as 5%. Because
00:02:27
of this fiscal situation that the United
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States finds itself in, we are now
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burning an additional $2.5 trillion a
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year, adding to our debt load. We are in
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a fiscal crisis and we're not willing to
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admit it. And I've said this from day
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one that Doge can only do so much. And
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clearly that's the case where they're
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now talking about sub $300 billion a
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year in potential annual savings from
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Doge action. At the end of the day,
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Congress needs to take action. And this
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bill from Congress doesn't take much
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action. I will tell you that if you look
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across the board, all of these programs
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are still being proposed to be run at a
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cost that is well in excess of their
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precoid levels. And so I would set two
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guiding principles if I was to be the
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benevolent dictator of the United States
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of America. My guiding principle number
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one would be that any program that we
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intend to continue to persist have its
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budget level cut to pre-COVID to 2019
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levels. Second would be and if we did
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that by the way we would be in a much
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better fiscal situation. The second
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would be that we add no new programs in
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the moment. There's a whole bunch of new
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thrown into this bill as well as
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increasing the cost and a few cuts here
00:03:30
and there. I'll just highlight a couple
00:03:31
that I think are worth noting. You know,
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there's a cut in the SNAP program, which
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is the Supplemental Nutrition Assistance
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Program. That's food stamps. And I
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talked about this with Brook Rollins in
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the interview I did a few weeks ago. You
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can watch it on YouTube. And we talked a
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little bit about how this SNAP program
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has absolutely exploded in size from 60
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billion a year in 2019 to 120 billion a
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year today. So, in this budget proposal,
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they're actually cutting it back by
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about 30 billion. So, to 90 billion. So,
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it's still 50% higher than it was
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pre-COVID. And there's a lot of kind of
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stories we could go through on what
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happened during CO that caused this
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thing to blow up the way it did, but
00:04:10
political wrangling pulled money out of
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the government into people's pockets,
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and that is persisting today. I'm a big
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believer in cutting taxes. Obviously,
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I'm probably more libertarian than
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anyone else on this show or that we've
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ever had on this show, but at the end of
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the day, you can't just say, "Hey, let's
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cut taxes and spend more than we're
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making. It doesn't make sense." A lot of
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this stuff's going to be exploitable.
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The tips and overtime exclusions are a
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way to pander to people to get votes and
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now keeping your promises on those
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votes. I think at the end of the day,
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the tips and overtime rule could invite
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a lot of gamesmanship and loopholes that
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will be created and people will wake up
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and be like, "Uhoh." For example, if I'm
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an independent contractor, I will enter
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into a contract with someone that says,
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"Here's the service I'm providing you
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for 50 bucks, and then there's an
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optional tip you can give me at the end,
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and then I won't pay taxes on that tip."
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And I can give you a hundred other
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examples that this will create an
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inordinate number of crazy insane
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loopholes. The interest on the debt at
00:05:05
$1.9 trillion a year equates to 7% of
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GDP. That means seven cents of every
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dollar that moves in every transaction
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in this country is being used to pay
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down interest on money we overspent in
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the past. It has become an absolute
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crisis. I think that there's a few folks
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that should be shout out on this, which
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is Senator
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Paul and Senator Ron Johnson, who both
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highlighted how ridiculously
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underimpressive the spending cuts are in
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this bill. I think we've got a lot of
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work to do. I'm deeply disappointed. I'm
00:05:38
scared and I hope that um that this all
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gets kind of fixed up and in recon. Do
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you think that we should line item out
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all the new spending irrespective of
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what it is? All new spending line item
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out. That's that's rule one. And rule
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two is all existing programs got to go
00:05:53
back to pre-COVID levels. You do those
00:05:54
two things, we're in a great place.
00:05:56
Yeah. And just to put some numbers and
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some charts behind it, here is the the
00:06:00
debt back to Clinton era. Clinton added
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uh 392 billion in eight years. It's
00:06:05
barely noticeable on the chart. 40 50
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billion a year. Bush 5.4 trillion four
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years about 1.3 trillion a year. Obama a
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trillion a year. And then we get to
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Trump 1.0 two trillion a year. Suddenly
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we decided we would double it. Biden
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same thing. They added almost exactly
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the same amount
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to the right on track to do the same.
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Yeah. It's not total dollar amount. It's
00:06:29
percent of GDP that you're adding. And
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you know, right now at at two and a half
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trillion dollars a year of deficit,
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we're talking
00:06:38
about a deficit to GDP of like 8%. Yes.
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8% a
00:06:45
year. This is like Argentina. This is
00:06:48
like insane. The fact that we don't
00:06:50
treat this like a fiscal emergency and
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everyone goes up and they tout, oh,
00:06:53
we're going to make 60 billion in cuts
00:06:55
in Medicaid. That's out of $820 billion
00:06:58
of annual spend. you know, oh, we're
00:07:00
making 30 billion in cuts in SNAP.
00:07:03
That's still 50% higher spend in total
00:07:05
than we were in 2019, a few years ago,
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when we didn't have that much of a
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problem. This has become like such a
00:07:13
reset of expectations. And I worry again
00:07:16
that we went into this, I think, in a
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very optimistic way thinking that this
00:07:19
administration was going to treat things
00:07:21
differently. We had Doge, we had
00:07:23
alignment on the importance of the
00:07:24
budget. Besson has highlighted it. And
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then it's kind of back to gamesmanship
00:07:28
in DC. all these representatives from
00:07:30
Congress show up and try and get money
00:07:32
for their constituents in a way that is
00:07:34
not sustainable. We're not going to be
00:07:36
able to keep this up and we're not
00:07:37
really having the hard and tough
00:07:38
conversations we need to be having. And
00:07:40
every year, everyone wants to get
00:07:41
elected by keeping programs and keeping
00:07:43
money flowing that their constituents
00:07:45
elected them to do. And they want to add
00:07:47
new programs. They can go on CNBC and
00:07:49
say, "Look at this cool new program I
00:07:50
stood up. It's great. This is going to
00:07:52
create the future of America." And
00:07:53
meanwhile, there's no future of America
00:07:55
because we're burning $2.5 trillion
00:07:57
dollars a year. It is like an
00:07:58
existential crisis that no one's willing
00:08:00
to stand up and highlight just how
00:08:02
critical this emergency is. $2.5
00:08:04
trillion of deficit spending on a $28
00:08:07
trillion
00:08:09
GDP. Tell me when in history that's
00:08:11
actually worked out at the end of the
00:08:13
day except when you're in some war and
00:08:15
you're going to end up taking over some
00:08:16
country and getting all their resources.
00:08:17
And as you mentioned this actually this
00:08:19
has this has you know knock on effects
00:08:21
with regard to things like dd
00:08:22
dollararization. Why are you investing
00:08:23
in the American dollar if you believe
00:08:24
that's why it's going to this is the
00:08:27
debt this is the debt death spiral that
00:08:28
we find ourselves in because what
00:08:30
happens is people stop owning treasuries
00:08:32
when they start to question whether or
00:08:34
not 30 years from now the US government
00:08:36
is going to meet its debt obligations
00:08:37
even the smallest marginal question of
00:08:39
that drives interest rates up 1% 2%.
00:08:42
Suddenly your 30-year Treasury yields at
00:08:44
6% 7%. And then your interest rates
00:08:47
climb and then your deficit spending
00:08:48
climbs and that's how it becomes a
00:08:50
spiral. So now the debt goes up even
00:08:53
more than it did the year before and
00:08:54
then the next year it goes up even more
00:08:56
per year than it did the year before.
00:08:57
That's why it's called a debt death
00:08:59
spiral. One of the things I've heard in
00:09:01
a lot of members of the cabinet that
00:09:02
I've met with over the last couple of
00:09:04
months is we've got all these new
00:09:05
sources of revenue. I had an interview
00:09:07
with Doug Bergam. He talked about
00:09:08
unlocking America's assets. We've got
00:09:11
this balance sheet with lots of assets.
00:09:12
We're going to do land leases and all
00:09:13
sorts of other things. We we met with
00:09:15
Lutnik. He's going to sell the Trump
00:09:17
gold card, the immigration card. We met
00:09:19
with Bessant. He's got these ideas on
00:09:21
how we're going to drive. Everyone's got
00:09:22
great theory on how we're going to grow
00:09:24
GDP and actually grow government
00:09:25
revenue. But until those dollars start
00:09:28
to flow in, we have to get our fiscal
00:09:30
house in order. We have to cut spending.
00:09:33
When those dollars start to flow in,
00:09:35
then you can start to spend. But you
00:09:37
can't spend ahead because otherwise the
00:09:39
cost of the debt and the economics
00:09:41
uncertainty is going to limit our
00:09:43
ability to execute on the back end on
00:09:44
that revenue generation. And I'm very
00:09:46
worried about no one kind of paying
00:09:48
enough attention to this. So, I just,
00:09:49
you know, I feel very passionate having
00:09:51
seen this bill that we're just not on
00:09:52
the right track.
