Episode Transcript
[00:00:14] Speaker A: Hello, welcome to Call It Like I See it presented by Disruption Now, I'm James Keys and in this episode of Call It Like I See it, we're going to take a look at all this back and forth coming out of Washington D.C. about the debt ceiling and, and the need to raise it to prevent some crazy catastrophe or as Joe Biden calls it, the meteor headed to crash into our economy.
And later on we're going to discuss whether our brains were built to handle the level of uncertainty that we live with on a day to day basis in the modern world.
Joining me today is a man who can't stop until he sees his name on a blimp. Tunde. Ogun Lana Tunde. Are you ready to tell the folks why it's like the more money we get, the more problems we see?
[00:01:05] Speaker B: Always, man. That's what we're here to talk about. Money and problems. Just like Biggie.
[00:01:10] Speaker A: Money and problems, man. Money and problems hand in hand. Now we're recording this on October 5, 2021. And since this debt ceiling issue seems to have been picking up steam in the past few weeks, we wanted to take a look and have a discussion on what's actually happening from a machination standpoint. Essentially, we have the Republicans in the Senate refusing to agree to allow a vote to raise the debt ceiling, which they can do because the filibuster rules in the Senate allow a senator or senators to block votes on issues unless 60 of the 100 agree to allow the vote. So issues have to be settled essentially by more than just a 5,149 margin.
So we're at this stalemate with the Senate unable to even have a vote on whether we want to raise the debt limit.
I wanted to get into whether this is just politics, so to speak, and people trying to use leverage to create advantage here and there or some of this, or how much of this is our government just basically about to drive us off of a cliff?
So to get us going. Tunde, what's your reaction to these fights?
Do you see this stuff as fair political gamesmanship or is this like evidence of dysfunction?
[00:02:28] Speaker B: Evidence of dysfunction. If I can be direct with my answer.
[00:02:33] Speaker A: Tell me why. Tell me why.
[00:02:35] Speaker B: Okay. Thought this was gonna be a short show.
Well, because I would say this the evidence of dysfunction. That's a good question to ask me. The evidence to me would be that this is something that's been historic in our country's history since we've had debt, right?
So obviously, probably 100 plus years of our country having generally two parties that bicker and fight about things generally. But when it came to things like this topic of making sure the nation can repay its debts, there was never an argument about it.
That changed, let's say, about 10 years ago or so I remember with the Tea Party wave coming into Congress.
Remember it was 2011 when a senator from Texas read Green Eggs and Ham on the floor of the Senate as a way to stage a filibuster to prevent a vote from happening to raise the debt ceiling. That was the beginning of this. Watching this type of hyper partisanship enter areas that I think traditionally had not been entered in this negative political discourse, which is our financial structure and legislation around that when it comes to things specifically like this debt ceiling. And then also certain things that I would say on the international stage that we hadn't seen before in terms of the way that both parties may pick at each other on foreign soil. That was something.
[00:04:09] Speaker A: Criticizing the President when he's abroad and stuff like that.
[00:04:12] Speaker B: Yeah, those are things that traditionally didn't happen in United States politics.
So what happens is that debt ceiling is now from a political kind of bludgeon angle has been conflated and combined with this idea of future spending.
But I decided to really go to the source and say, what is the debt ceiling limit? And I went to both the treasury website as well as the Congressional Budget Office, and it's a pretty simple definition. I mean, it's just one paragraph that says a couple things. In one of the sentences, that limit does not authorize new spending commitments. It simply allows the government to finance existing legal obligations that Congress and presidents of both parties have made in the past. So then I started looking at some of the financial numbers. We've got 28.5 trillion in debt in this country and 700 billion of that was racked up by the current President, Joe Biden.
And that means 27 and change. Trillion was racked up by everybody else before. Not everybody, but I would say from Bill Clinton, George W. Bush, Barack Obama and Donald J. Trump. So that's just, you know, it's not. That's why this is dysfunctional, because this is really about doing things like paying interest on our debt that we've already racked up with the war on terror and all the things we've talked about. And everyone knows it's happened in the last 20, 25 years.
And the other thing I wanted to look at is the fiscal year.
And then I'll get off my high horse here. And a lot of people may not realize the US Budget for Our country does not operate on a calendar year. It operates on a fiscal year. And that fiscal year is October 1st to October 1st. That's partially why the debt ceiling limit needed to be raised by September 30th.
So what happens is this is actually the last budget of the Trump administration because it was October 1st of 2020 when the current budget, with the current deficit of 2 trillion was created. And so that's why, again, it just smacks as more dysfunction and disingenuous that the legislation is basically on the eve of the end of that fiscal budget year to say we need to pay for these debts. This additional.
[00:06:28] Speaker A: We've already, we've already accrued, you know.
[00:06:32] Speaker B: And this is deficit spending. And so, you know, that's why, again, this isn't less. I'm not blaming President Trump for this. I'm not blaming any president. This is more of this is why it's unhealthy and it's dysfunctional, because these are things that prior to 10 years ago, weren't political footballs. Both parties just kind of did this in kind of in silence and just didn't get the news. I mean, that's why, like, we never heard of a debt ceiling before 10 years ago.
[00:06:55] Speaker A: Yeah, yeah.
At political football, like you said it was, even if individual senators may oppose or something like that, there wasn't an effort to block a vote on it, so to speak. Like, we're just not going to take a vote on it. And I think it's evidence of dysfunction, but in more of a mechanical way. I think the dysfunction that we're seeing actually is that is the, is this filibuster rule, like, it, instead of the filibuster rule is in place to make people talk about things, to make the parties so that one party doesn't just govern with 51 votes, or in this case, we have a 5050 split, and then if there's a tie in the vote, the vice president breaks the tie. So the filibuster rule was created for that. Now people talk about the people who created it and why they created it, and Jim Crow. And it was created for some pretty nefarious purposes to make sure that the majorities couldn't do things to bring more equality, so to speak. But you don't have to get into all that for right now, the filibuster has broken our government because we're in this partisan mode where, where if the filibuster is intending to say, well, you're not going to get anything done unless both parties can come together and talk about things. Even if you only have 51 people that are agree of 51 out of 100, which is a majority that actually agree, if you even wanna have a vote, you gotta have 60, you gotta have more than that simple majority because of that. And then because of the way our, the directions our politics have taken, we actually cannot get votes on things. So there are all this legislation that's sitting out there now that could conceivably pass the 51 vote margin that can't even get voted on. So the Senate just doesn't function anymore. It's just all this. And so all of this back and forth that we're seeing between Joe Biden and Charles SCHUMER and Mitch McConnell is not about whether McConnell and Republicans will actually vote for it in favor of the debt ceiling. It's only on whether the Senate itself, itself will take a vote on it. And so to me, that's the level, that's the dysfunction that we're seeing. It's literal dysfunction. It's not like, oh, these guys, they're just on their duff. And it's like literally you need 60 votes in a 100 seat place to do anything.
And right now, the way our politics are, it's almost if one side wants to do something, then the other side is saying, we just don't wanna do it. We don't want. And this I always point to the big departure here being Rush Limbaugh and really laying down the gauntlet, saying, I don't want Obama to succeed. I don't want the President of the United States to succeed the President of my country. And I think we're kind of in this mode now where there are people who are okay with if it's not their party, then we want them to not succeed in things, even if that hurts the country or take the country down. So I think that that is the dysfunction that we're seeing in this instance. And it could be manifested in different ways, but it really comes back to the filibuster and this need to. For 60 votes to do anything.
[00:10:03] Speaker B: Yeah. And one of the things that I just want to say as you say that about Limbaugh saying it about Obama, or even we could go back to McConnell saying his goal is to basically block everything to make him a one term president.
I want to be clear for the audience, you know, we don't say these things because we advocate for Democratic policies over Republican and all that.
It's not about a partisan look at it.
I think James and I have expressed that having A healthy conservative and liberal debate is actually the best thing for this country. But one can't deny at this point that the two parties behave very differently from their leadership. And you're right, James. One party has an attitude that if we're not in control, our opposition just is illegitimate to even deal with.
And another party seems to not know how to deal with their own opponent in negotiating anything or their own like. Or their own people internally.
[00:11:01] Speaker A: Like, you and I look at these things, you know, like, we look at it as a center left and center right type of mentality, irrespective of political party. The political parties, you know, like, they have groups of a lot of different people. But you know, just from the standpoint of ultimately, I mean, and this is something you and I agree on, ultimately, we want a functional government.
And so when the government isn't functioning, you have to be able to take off a partisan lens and just say, okay, well, what's happening? And that doesn't mean you take off the partisan lens. That doesn't mean you refuse to call out things that are actually happening when people are banding together and saying, okay, well, this is how we're doing this, this is how we're doing that. So, yeah, this isn't like. I think that there is. And we're gonna get into, you know, like, there. There are issues that both parties have with this, but the issues are different. You know, like, the difference is going to. Going to determine how we speak about it because the types of issues that are. That are being that each party is bringing into this or the types of problems is what exactly, or excuse me, is how we're going to actually talk about those parties. If the Democrats can't get everybody on the same board on their own side, then it's like, well, hey, you know, you guys gotta do a better job of, like, government.
And if the Republicans are saying, we wanna work to make sure this doesn't work, and it's like, well, hold on, you gotta get on an American side here. We need it to work. It can't just be, oh, well, since the Democrats are in charge, that we don't want it to work. Like, that's not helpful for the nation.
[00:12:29] Speaker B: Yeah, no, that's why I just wanted to say that just because there's some. I could see people listening to us and saying, oh, they're only advocating for one side or the other and all this. And it's like, no, this is just dysfunctional. And it's the sad part.
[00:12:44] Speaker A: Yeah, Democrats filibuster isn't partisan. Like that's not saying.
[00:12:48] Speaker B: Yeah, no, that's what I mean. Like Democrats are dysfunctional internally within their own party and getting kind of disagreeing and all that and getting things done. And Republicans are united within their own party, but then dysfunctional with operating at a government level with their opponent, you know, just compromising. And it's just, and that's my point. It's just, it's a mess all around and it's sad to watch from the outside. And the loser is us, you know, the United States and our country.
[00:13:17] Speaker A: So now let's, so we'll assume that this ultimately get resolved. But even if it does, do you think this kind of like this dysfunction, like you said, with where the Democrats on the inside, like internally are, have dysfunction and we'll get into that in a second, whereas the Republicans, from an overall standpoint, a governmental standpoint, their actions are bringing about dysfunction.
Is that a problem if this ultimately gets resolved and we get the debt ceiling raised and we keep moving along?
[00:13:49] Speaker B: Yes, because I think, look, however this resolves in the short run, I mean, it's already begun to resolve itself. One was they did a short term fix to kick the can two months down to December from here in October.
So I'm sure we'll be set up for this fight again in two months. And that's why I do think this is problematic.
And it's just, it's embarrassing, to be honest with you. I mean, you know, I remember when we were pulling out of Afghanistan and all, there's so many people talking about how embarrassing it was because, you know, it was embarrassing that we got 130,000 people out in two weeks. Unfortunately, you know, 13 service members and 75 Afghans were killed in that last week.
But that country was a disaster the whole time we were there. And we've all known it's been a disaster for 100 years. So I'd say this is more embarrassing to me as an American. Just like January 6th was embarrassing, just like a lot of things that have happened within our government halls have been embarrassing because we're supposed to be the beacon of freedom and democracy. We are also supposed to be the world's superpower, both military and financial. And here we are that we can't agree on paying our bills to and putting continually for a decade, putting our country at the risk of default. That to me is embarrassing.
[00:15:02] Speaker A: It's not like people like this stuff is all in private either. This is like happening publicly. And so if you were trying to figure out whether freedom and Democracy and a republic form of government with democratically elected officials was a good way to run your country. If you look at America, that's not a beacon of, oh, yeah, let's do it like that. It'd be like, no, of course not.
So, yeah, I agree with you that from the standpoint of just this doesn't look like we know what we're doing.
It looks like we are bad at this government thing because of the way this thing is happening. And so, yeah, and also I think that the part of our government being able to function properly, one of the benefits that we've had over the last however long is, let's say 20, 30 years, is that even all the ups and downs, there has been a relatively stable level of confidence that our economy would continue to grow overall. And now even in the financial crisis and the extreme measures that were taken to try to maintain that in an emergency standpoint, there has been, and there was restored, I guess, shortly thereafter. It didn't last for, like in the Great Depression where you had this bottomed out confidence for years. And then people like, oh, I don't know, I don't know.
And so the functioning of our government is a part of that and saying, hey, those guys up top, those are serious people. If things need to be done, they'll get done. And it's like, well, hold on. If this keeps happening, eventually we're not gonna get that from the citizens, from the Capitol, from whoever is like, I don't know that these people are gonna get this stuff done. And then we don't want that. We don't want to be considered that type of government that where if things are serious and need to get done, they don't get done.
[00:16:45] Speaker B: Well, we're looking like it. And I would say this too, because I was thinking about it and preparing for today when you had shared with me some of the questions. And I thought this is. Again, I don't think it's intentional, but unintentionally our leaders are doing the greatest service for people that we always say are our adversaries, like authoritarian regimes or regimes like China and Russia in terms of superpowers like them. And then smaller, let's say the Eastern Europe, European bloc countries that seem to want to go back to more authoritarian style, or let's say African nations or Southeast Asian nations that have a dictatorship.
What they're doing is they can point to America finally and say, see, none of that stuff works. All this democracy, all this arguing and messiness, this is why it's easier they'll say things like former leader here said, I alone can fix it. Why deal with all these people that are arguing? You know, just give me all the power and I'll make it better. Yeah, and you know, this is like, you know, the sliding into Palpatine territory, right? Like the empire in Star wars that let's just have one central figure and not have any of this noise and messiness of a free democracy. And so you know this, we keep playing chicken, at some point the two cars will crash and God forbid we miss a debt payment one day that will be it. When, when, when the rest of the world can look and say, yeah, that experiment of America failed.
[00:18:13] Speaker A: Well now tell me this and it.
[00:18:15] Speaker B: Will be our fault.
I'll leave it at that.
[00:18:18] Speaker A: How bad though could things get? So what are the stakes here? I don't know. We always talk about this stuff kind of in theory and like oh, the debt ceiling. And I think a lot of times there's a level of discomfort like people have personal debt and understand how they manage it and stuff like that. And a lot of people aren't comfortable, myself included, with the level of debt we have as a nation. You know, like, and you know, $28 trillion is a lot of money and if 20 years ago it was in the single digits at least, you know, and then that was a lot and then now it's like it's ballooned. And so I think there's a level of discomfort in general in dealing with the issue. Just cuz it's so like overwhelming to think about. But how, how big are the stakes here? You know, like what are we talking, Is this a meteor? Like, like Joe Biden says or what, what's what, what happens here if you miss a payment or something like that. And I understand you can't say for sure, but just in general, just your knowledge.
[00:19:12] Speaker B: Yeah, I mean I think whatever diabolical analogies can be used are probably appropriate in the event we were to miss a debt payment. So we're not there yet and hopefully we never get there.
But you got to kind of look at it from the aspect of risk to the investor. So a lot of people don't understand how our system works. And you're right.
Just to peel it back, the idea of 28 trillion is massive. Right? I mean that's such a, it's like when they talk about, you know, the next galaxy is, you know, 20,000 light years away and you're trying to figure out how far that really is. I mean 28 trillion is a huge Number.
[00:19:47] Speaker A: Yeah, you might as well say a gazillion. You know, it's so big, so it's hard to. Yeah.
[00:19:52] Speaker B: So how do we pay that back and all that? And it's true. I mean, can we pay it back through raising taxes on the 1% and all that? No, I mean, this is. We're at a point of debt that it will be difficult to imagine how to pay it back and all that. But I'm sure financial engineering experts can figure it out like they figured out a lot of things. Now, the advantage we've had for the last, let's say 20 years or so is that historically interest rates have been much lower than they have been in the past 200 years. So we're racking up that debt at least at a time when the average kind of rate to pay it back is somewhere between literally 0 and 2% generally.
And so that's where I think that as long as we have an economy that's growing and getting technical here with things like the gross domestic product, the GDP, meaning the annual output of our.
[00:20:44] Speaker A: Economy, exceeds almost 21 trillion.
[00:20:48] Speaker B: Yeah. Exceeds the level of our debt payments, expenses and all that, we could probably do something like this indefinitely. But it would take a lot of inflation as well, because you'd want to have an idea or an environment where, let's say 30 years from now, the future equivalent of 30 trillion would feel like 5 trillion today.
So that's why inflation is probably going to be necessary for us to deal with this over time.
But let me go back to that idea, like I said, about risk, because a lot of people don't understand how this works. So government issues bonds to finance itself. That's the big difference between us as individuals, like our families, and any central government. And when I say central government, it could be a country like the uk, United States, Canada, Australia, all these other countries all have central banks that issue bonds.
[00:21:38] Speaker A: And let me say this real quick, because you're talking, you have these bonds, but this is in addition to what we all understand, which is the tax revenue that is being brought in. So the tax revenue itself is not enough basically on each year to, for the, for the government to pay all the expenses it needs to pay that year. So what the government does and what's again, this has been a trend that has been increasing over time, over the last 40 years, but even more so over the last 20 years is the government, in addition to the tax revenue, issue those bonds, which then it has to pay back, but that gives it cash immediately to make up the difference between the tax revenue and the expenses or what they want to spend, basically.
[00:22:19] Speaker B: That's great because you just brought us back to the debt ceiling.
You defined why the debt ceiling is about paying back those previous bonds that we. Yeah, correct. So what happens, though, and just for brevity, that you can also have municipalities like in states like the state of Florida, state of Michigan, or a city, issue bonds. And what are bonds? Bonds are loans to the organization. In this case, we're talking about treasury bonds, which means that investors, people like me and you will buy a bond.
And the government, we lend our money to the government, they pay us back an interest rate. So think about it similar to the way banks and credit card companies look at us as individuals, as a risk based on our credit score.
And if we take a mortgage or a credit card, if I have an 800 or 850 credit score, my interest rate is very low for paying back the money I borrowed because I'm considered a low risk. But if I have, let's say, a 600 credit score, my interest rate will be much higher because I'm considered a higher risk because I have history of not paying back things on time.
[00:23:27] Speaker A: So right now the US Has a good credit score. And if we miss a payment, basically, or if we start even talking about this stuff, you would think can put.
[00:23:37] Speaker B: People on edge and it shows, like, dysfunction. Right? Like, so the dysfunction in our government would be like looking at dysfunction in someone's home life and saying, well, this makes me nervous. I don't know if they can pick.
[00:23:48] Speaker A: I don't know if I want to loan them this mortgage.
[00:23:50] Speaker B: Correct.
[00:23:51] Speaker A: Yeah.
[00:23:53] Speaker B: And that's what I was going to say, just to finish off, is that there's also credit ratings agencies in the investment world. So unlike the numbers, the 600 to 850 numbers I just gave, they have it in letters. Triple A down to double A, single A, triple B. And then you hear the term, People have heard the term like junk bonds. And that's considered bonds issued by an issuer with really bad credit rating. So the idea is that if we were to default, just to finish, kind of bring it back to the home stretch here. If we were to default on our debt.
Investors. And when I'm talking investors, I'm talking investment banks, foreign nations, sovereign wealth funds. People talk about China having a trillion dollars of our bonds, things like that. That's who really buys our bonds as well as us. Most of the debt in this country is owned by Americans through money market accounts, 401k funds, that buy debt and all that kind of stuff. So what would happen is we would be seen as a riskier credit risk lending us money, which would then drive our rating down, which would cause the interest rates that we pay on our debt to go up. So that means everything would become more expensive for us as consumers. Because that's the last part I'll get off my high horse here.
People don't appreciate that our lending rates for consumer debt, from credit cards all the way to mortgages, are tied to the interest rates of the 10 to 30 year bond in the United States. So if those were going to go.
[00:25:17] Speaker A: Literally go on for three hours about.
[00:25:20] Speaker B: This, that's why I just ended to say that's where it would have an effect us at the ground level. Like you're saying that it's galaxy brain stuff about trillions and debt and debt ceiling. People don't realize how this is going to affect me at home. And that's what I'm getting at is at the end of the day this could cause interest rates to rise.
[00:25:35] Speaker A: Well, it could do that because you have the interest rate issue. It also could just grind the economy to the halt because again, like we just said, the government's issuing bonds to keep everything afloat. And so if they no longer able to do that, or if they're able to do it much less, or if the amount of money that's required on an annual basis goes up because the interest rates go up and that means that the interest payments are higher on the debt we already have.
It's just, it snowballs into oblivion basically. So it is as bad as they say it is. And that is as long as we have this economy that is in government that is in large part not in large part in part financed on ongoing borrowing, then we have to keep our credit score very, very, very, or our credit rating very high. And so yeah, I mean it appears to me to be just as dire as it's said to be. But up until now it's always felt at least some, I know and around in the 2000 and tens when Obama was in office and they were saber rattling. There were some times it felt like they were going to drop the ball as well because the Republicans again were like, no, we're not doing the debt limit and so forth. And I think it was raised three times during the Trump administration, three times in the four years. So this normally does happen on an ongoing basis. And I actually am fine with and think there's room for a discussion on. Well, hold on, let's try to figure out, so how, why, how to do things where we don't need to keep raising the debt limit. I'm here for that discussion, but I don't think raising the debt limit is a part of that discussion, so to speak. Like, that discussion needs to be had after we raise the debt limit when we put together this next budget for starting October 1st, or if we're looking at 2022, we put together the next budget. Let's try to figure out a way we, during the Trump administration, for example, lowered taxes, so lowered revenue and increased borrowing to cover that cost.
And so it's like, well, hold on, that's going to make us have to increase the debt limit faster. And so just in the same way, like right now there's fights over, okay, well, once we raise the debt limit, then they're going to increase spending. And so then we're going to.
All of those things need to be talked about, but not at the time of the debt limit, actual discussion, because that deals with the decisions we've already made, so to speak. We have to pay back the stuff that we've already decided to spend. And then when we make the budget, Congress has a say as far as what the actual budget is going to be moving forward, which will affect whether we need to raise it in the future. And so I think that aspect of it, one part is making sure you can pay back what you've already borrowed, and that's the debt limit. And then when you're talking about the budget for the next year, that's where you figure out whether or not you're going to be deficit spending or whether or not you can, I mean, this is kind of a pipe dream at this moment, but whether you can have a surplus, which last time we had that was, you know, Bill Clinton.
And so with that, though, there's one other point I wanted to make, and that's what just going looking at that dysfunction again and how I talked about the filibuster, one of the things that I think we have to look at in the way that the government is operating right now is the level of partisanship. And I know you had something to say on this as well. But the level of partisanship means that everything is on the margins, basically, because the distribution of our government is not evenly, but relatively evenly, and it goes back and forth distributed between the two parties. And so if we're gonna have that, if there's not going to be broad agreements on basic things like this, like not pet projects or anything like that, but just like on the debt limit or on the idea of putting together a budget or things like that, then each of the parties has to respond to that reality. Now, Mitch McConnell and the Republicans have demonstrated that they understand that's the new reality and they're prepared to do what they need to do in order to, to operate in that new reality. But I'll say this, I think we're up creek with the Democrats as well because they don't seem to understand this reality that they're going to have to make plans to do this if they control the House, the Senate and the White House, that they're going to have to. If the Republicans are saying they're not lying and saying, hey, we may vote, we may not, the Republicans are saying we won't vote for it. And more importantly, we won't even vote to allow you, we won't even allow you to have a vote on this through the filibuster. They're gonna have to make other arrangements. Like they can't just throw up their hands and say, oh well, the Republicans won't help us, it's their fault.
So I think we need to expect more. Like obviously we can say the Republicans, hey, that's messed up. This is something we always used to do together. But also the Democrats, they can't be flat footed all the time. They need to actually come up with solutions here. And so that's the thing that's also, I think that's dysfunction as well. Is that how Mitch McConnell's been telling you for months he's not gonna vote, do allow a vote here? How have you, how come you don't have an alternative yet? Like what's going on? You're still asking him the same question.
[00:30:35] Speaker B: That's the sad part that is just, it's dysfunctional. You're right. And that's what I mean. This is like an abusive relationship. Like the Democrats are the better wife that keep hoping that their husband's gonna change and have no backbone to stand up for themselves. And the Republicans already authoritarian right now in the modern politics. And I know that people hearing this will tell me that Democrats were once this or that and Republicans did this. I'm not talking about that. I'm just about talking, talking 2021 and this recent kind of generation call it.
[00:31:05] Speaker A: You see it.
[00:31:06] Speaker B: Yeah, exactly.
But I wanted to get back real quick to the deficit spending because it's a very interesting observation you make because you're right, the last time we had a true budget surplus was the year the 2000, 2001. Era where we had a $200 billion surplus. And Americans were told by then candidate bush during the 2000 election that it was their money and they deserved it back. And then he immediately did the stimulus and a tax cut in the first year or two of his administration. And then we went to war. Two wars.
[00:31:39] Speaker A: Yeah. And then we went back to the.
[00:31:40] Speaker B: So that really started the deficit.
So by 08, he went from a $200 billion surplus to a $4 trillion fiscal deficit and a $1.4 trillion budget deficit. And that, you know, and it ballooned under Obama and ballooned under Trump and is gonna keep ballooning now. So I think, you know, that early 2000s, clearly decisions were made that led to this. And.
[00:32:07] Speaker A: Well, let me say something just with you right there, because, you know, this is like, you know, you made that point about Afghanistan and how, like, basically everyone knew, all the serious people knew for a long time what needed to be done, but nobody wanted it to be done on their watch.
[00:32:19] Speaker B: Yeah.
[00:32:20] Speaker A: So that they get blamed. Cause they didn't wanna get blamed for how it was going. Everybody knew how it was gonna look when you did it. And Obama was like, I don't necessarily want to do that and have everybody blaming me for. When this looks messy. Trump, like, even though both of them ran on the idea of getting out of Afghanistan, when they got in, they were like, I don't want. This is going to look messy. I don't want it on me. Biden actually did it. It's the same kind of thing here. Like, once Bush, basically. And again, that was. It was. It wasn't. He wasn't the first person to do it, but he did it at a level that hadn't been done really before. And it's almost like everybody now is drunk on this. This deficit spending, where, you know, it's like, if we want to tighten our belts and our budgets and try to get out of this, somebody's going to have to come up with a budget that is going to be. Or. And a tax policy. Taxes are going to go up and spending is going to go down. And nobody wants to be the one.
[00:33:08] Speaker B: That gets in front of the American.
[00:33:09] Speaker A: People and say that. Because when they do, everybody now is like, oh, look at this deficit. Or look at all this debt. Look at all this debt. Then as soon as a leader gets in front of you people and says, look, we're going to get rid of. We're going to. We got to. We got to get under control here. But people are gonna be killing them. But just like With Afghanistan, people gonna be killing them.
[00:33:24] Speaker B: Like, oh, it's gonna make Afghanistan look like child's play. Seriously. Because Afghanistan was overseas. It was something that, like you said.
[00:33:32] Speaker A: This is gonna be in your pocket.
[00:33:34] Speaker B: Yeah, that's what I mean. Like, this is here and this is gonna be. And unfortunately, what would probably most likely happen is that I won't speak for you. I'll speak for me. Cause I entrepreneur, I own a business. I play every legal tax game and loophole that I can.
And I'm thankful for the Republican Party and the tax code as an entrepreneur, because I've benefited a lot.
[00:33:58] Speaker A: They put a lot, a lot of nuggets in there for you, big time.
[00:34:01] Speaker B: And I drive trucks through them with my cpa. And it's great.
And it's unfortunate for people because I've benefited the last decade and I know that others through the tax code have not.
And a lot of people like me have. And that's okay. But when this worm turns, most likely the way it's going to go is people in my socioeconomic class will figure it out and be okay still, and the little guy will get hurt and punished for this drunken spending we've done. And that's the sad part of all this, is it will end ugly. And if it's not done in a smooth way. And I mean, I don't know where the dysfunction comes. Exactly. And that's where I'm getting at.
[00:34:46] Speaker A: You can't do anything in a smooth way right now.
[00:34:48] Speaker B: Exactly. And so, because your point is very valid, where we've had this deficit spending, and this is where we get a little bit to QE here, the quantitative easing was the Federal Reserve's program for helping us through the great financial crisis, primarily 2009-2014.
And what happened is because of the dysfunction back then under the Obama administration and the inability for that administration and the Republican majorities in Congress to agree on anything, the only way that the budget got somewhat improved over his, the budget deficit over his tenure was really the sequester. The fact that the Bush tax cuts weren't permanent. And in 2012, they sunset it back to the prior to 03.
And that's the only thing that raised revenue a little bit. So what happened is the Federal Reserve had to keep what they called quantitative easing, this kind of buying of bonds and assets in the economy to help fund our deficit spending. So that's been going on to the tune of about 100 to 120 billion a month, give or take. Because the pandemic last year in 2020 did kind of force them to have to raise it because of the economic hit.
[00:36:04] Speaker A: Yeah.
[00:36:05] Speaker B: And that's why this isn't a point necessarily, Fingers, because the decades a long time, there's some things that were necessary like the pandemic that really blew a hole in the economy that was outside.
[00:36:17] Speaker A: This with the quantitative easing. There are a lot of mechanisms. That's one of them. And we're going to talk about that in more detail in a future show. But there are a lot of mechanisms that are at play and that was another one that was used to kind of keep us afloat through all these things. And these things have traditionally and are supposed to be break glass in case emergency.
The problem that we've had with the deficit spending and the increased debt and even with quantitative easing, which like I said we'll get into in a future show because there's some things, some notable things coming up with that, and we got the best man here to talk about that is that we're not doing these things on an emergency basis or in a sense we're behaving as if it's always an emergency. And so we're always have all these emergency measures in place to keep things going.
But you can't always be under emergency because you're gonna break the system eventually if you operate in that way. And so ultimately, and it's almost in a sense, it's almost like the human body, if your body's always in fight or flight mode, then you're gonna burn yourself out. And so we can end the economic discussion there and actually transition to the discussion on our bodies. And you and I were discussing earlier this week and shared a piece where it was from the Harvard Business Review and it discussed how our brains and they're looking at, they're studying basically humans, human beings and how our brains aren't wired for the level of uncertainty that we deal with on a day to day basis and how that kind of is breaking us in ways that obviously being broken is not conducive, but conducive to a healthy life. So it's causing problems with us and it's not necessarily because of anything that an individual is doing wrong. It's kind of a setup of our society. So what was kind of your, you know, what you pulled away or what stood out to you in this piece?
[00:38:04] Speaker B: No, it was great. I think it explains a lot as to where we are as a society today with levels of, you know, what I would say are considered maybe negative, negative outcomes and symptoms to our current you know, I guess ecosystem of living as human beings today. And so what I mean is the rates of depression, kind of negative mental health issues, the discourse we have with each other kind of like we just talked about. It's interesting segue from the last topic. Right. The level of dysfunction at the top is primarily there because of the level of dysfunction at the bottom. Right. You've got.
[00:38:42] Speaker A: And the bottom meaning the individual pieces.
[00:38:46] Speaker B: Correct. All of us as a citizenry. Yeah. There's so much infighting, there's so this social media stuff, the stuff we talked last week or two weeks ago with this, this Facebook stuff, and just the inability for us to manage each other as neighbors in a society.
I think a lot of that is a result of the unpredictability and uncertainty of our modern society. And you and I have talked about this in different ways in different shows when we've talked about historic stuff compared to now, which is let's say 1000 years ago in the year 1021.
No matter where you are in the world, you could be in Europe in some, you know, being a peasant or a serf somewhere. You could be a tribesman in the Serengeti, in Kenya, you know, chasing buffalo, or you could have been an Aztec before, you know, the conquistador showed up somewhere in South America. But there's a high probability that your grandparents life and your grandchild's life would be very similar around that period. Right.
They had clubs and axes, they had horses, they had this, they had that. Think about our life.
My grandfather, well, my grandfather I believe was born in 1912.
And I don't have grandkids yet. So my future grandkids will be born at some point in the next decade or two, hopefully. So my point is, is that think about the difference in those lives, right?
100 years ago plus 1912, you barely had the Wright brothers getting off the ground.
Most cities in this country had no electricity. And that means most cities around the world didn't have electricity. Most places didn't have plumbing. There was no such thing as television or radio really yet, or telephone. So long story short, the world was a lot different than it is today where we're having now civilians going to space and communicating on the Internet. And it'll be a lot different when my grandkids are born. So the point is, is that it made me realize that it's true. We have evolved again. We get back to this a lot on our show, right? We've evolved in a way as humans over eons of time, that now our society is reflecting back certain things that our natural evolutionary makeup aren't designed to handle. And it goes back to things like we talk about with fight or flight and all these responses that secrete certain chemicals and hormones naturally. We weren't on those all the time. It's like you just said about the last subject when you said, can't always be under emergency, right?
[00:41:21] Speaker A: Emergency comes from a fiscal.
[00:41:23] Speaker B: And we're like constantly under emergency now just as humans. Like everything, the news, the social media, the people and everything's a big deal all the time. And this is unhealthy.
[00:41:34] Speaker A: It'll break us, basically. To me, I would piggyback, actually, on what you were just saying as far as the.
When you talked about how different the lives are of ours versus our grandparents or whatever. And like, yeah, if you go back a thousand years or 500 years or 2,000 years, no matter where you were in the world, the lessons from your parents or your grandparents could directly apply to your life and cover, like, 95% of what you were going to encounter. You know, like, it's like the things you're going to encounter. There's a certain level of predictability that can be put in place just from learning from the people around you. Like, they've been through the same stuff as you right now. The stuff that we're going through, the stuff that our kids go through, they're going through things that kids today are going through, things that parents didn't go through, period. And it's a large part of their life. It's not a small part of their life. It's like the way they engage socially, the way they interact socially. Humans are social creatures, and so the way that we do so many things is changing. And so that, like, parents can. Can't say to kids, okay, I've been there. I've done that. There are certain overriding principles that you can do. So I think that the uncertainty that we see is. And the article gets into. It's interesting because it gets into ways to deal with it, because I think that's always helpful when we're looking at it. But the uncertainty that we see is something basically that has become the way our society lives today.
And if our brains and bodies are used to recognize patterns, then we want to implant or impress that. Excuse me. On the life that we're in right now and the society we're in right now. But it's harder to do that if you grew up in a village a thousand years ago and there were a hundred people and everybody kind of knows Each other. Everybody kind of knows each other's parents. Everybody kind of like there's a level of familiarity. And then. And that's how humans lived for 10,000 years. And then now you go into these big heterogeneous societies where so many people are different and so many people. That takes an adjustment. And that takes, that changes how you can make assumptions about people, make assumptions about things, how you can. How you can know who to trust and know who not to trust. All of those things create pressure points that press on our brains basically, as we're trying to navigate through the world. And I mean, I think that there are going to be some, some, Some negative results from that is kind of something to be anticipated, which again, and I'll let you jump back in, but that's why I think it's important that they even gave some thoughts in there as far as how to deal with that.
[00:44:03] Speaker B: Yeah, it's interesting because as you're talking, it makes me realize, because I'm thinking, okay, let's say thousands of years ago and all that, obviously the Earth was still the same.
And there are unpredictable things that happen. Right. Like a hurricane or an earthquake, but generally our climate generally has been stable over short periods of time, meaning like a human life. I understand that there's ice ages and all that, but those happen over thousands of years.
So generally things like the seasons and let's say when we became agrarian, you know, and farming and planting at certain times of the year and harvesting at other times of the year and all that, those again became predictable activities and things. And so it's interesting, like, back in those days, that's where religion covered a lot of the unpredictability, because you might have been hanging out for 20 years.
[00:44:55] Speaker A: It solves it for, like, in their minds, it solves it for them. Like, why did it rain? Oh, because we killed this virgin. And so therefore.
[00:45:01] Speaker B: Or why did it. Why did. Every year was great and then we just had an earthquake. Right. Because that might be the anomaly. And like, you're saying somebody cheated on.
[00:45:08] Speaker A: Their wife or something.
[00:45:09] Speaker B: Yeah. God was angry or whatever the case. And that is how humans operated for so long. And I think just, you know, and it's also interesting too, because we have 8 billion humans plus now on the Earth. And that's also something that's not normal historically. Right. I mean, we. It took us till, I bet, I think 1900, the year 1900, to get to about a billion from whenever humans started, you know, And I think that there's estimates that around the time of Jesus, let's say 2,000 years ago there was, there was well under like 100 million people on the whole planet.
So think about all the stories we've heard from thousands of years and the biblical stories. I mean, the Earth was an open, vast place, which then people weren't also bumping into each other as much because one thing is humans are pretty unpredictable and irrational. So I think having a lot more of us around interacting with each other also creates more uncertainty within just our own discourse in each other. And it just. Yeah, it's interesting because I feel like either we'll figure it out and we'll be able to survive on a planet with 15 billion people and we'll know how to deal with the climate and how efficiencies and all this stuff, or we won't. And maybe in a few hundred years, you know, we've destroyed ourselves and we're back to, you know, 3, 4 million people on the whole planet living as hunter gatherers, agrarian folks, because just we couldn't handle ourselves. And. Well, I'm not sure there's like in between, like it's either going to go one way or the other.
[00:46:37] Speaker A: Well, I think you can see, I think people adapt. And so like you can see and in our society actually illustrates this in stark terms. The difference between people who have become accustomed to living in large groups, urban areas, suburban areas, and the people who haven't and are still largely living rural areas. Like there is a very, very, very oftentimes and looking at it across the numbers now, individuals can always be different, but as far as looking at it over the numbers, there's a very different way that a lot of times people look at how the world should be run or things that should be in place. Like people that have become used to being around a lot of different people behave in some ways, not in all ways, but in some ways there is a difference. And so I think people can as the reality, as the new reality becomes more pervasive, so to speak.
Now our systems are going to have to be updated in order to make sure that the knowledge that's accumulated can actually be implemented. And we can't run things in a way like we would run things if we all lived on farms anymore, you know, but at the same time, people adapt, people learn. And so I have confidence that we'll be able to get there eventually. The question always is whether or not we get there in time before something, before we fundamentally change things or change things fundamentally change to where our society, our earth, can't handle the number of people anymore. But one of the things. And I mean, we can get ready to get out of here. But I did. One of the points that they made in this piece talked about as far as how to deal with this, that really stood out to me was that the idea of setting expectations with what's called realistic optimism. And so I think, like, this is actually.
This is something I've implicitly lived with my whole life. And so it really stuck out to me that this is like a thing, and it has a name. And what it is basically is that it's kind of been a belief that things will work out, but not necessarily that it'll be easy. And so there's work to be done. And it may be difficult, but if you put the work in and you really keep your nose to the grindstone, then things will turn out in a good way.
And, like, that's kind of, like, again, that's kind of been the way I've approached life in a lot of ways. And so. And it's kind of kept me sane. And so seeing that, like, in terms of, like in a presentation, in kind of an academic situation was very interesting to me because I do find that is very helpful for managing kind of how you deal with the ups and downs of the world, because crazy stuff happens. Like, if you're ever in a situation that you're thinking everything is going to go smoothly, you're in for disappointment a lot of times. And so understanding that things won't necessarily go smoothly, but if you stay on, if you keep pushing, then things will. That you get a breakthrough eventually helps manage the time, the ups and downs, and it gives you still something to keep focused on in the future that you want and get purpose and meaning and so forth. And so, yeah, I thought that that was one that was just like, wow. Like that. That is very helpful, I can say firsthand. But again, it was really cool to see that kind of discuss something I've had in my mind. I try to put in my kids and so forth. So I just. I wanted to mention that because it was meaningful to me. Yeah.
[00:49:49] Speaker B: And the other thing that I think stuck out in there was the confirmation, again, through this type of research, that the more uncertainty and unpredictability that a human being is faced with, the less creative and, you know, and kind of.
It's almost like all of us, we go back to more of a feral, if I can put it that way, kind of state of existence. Because when our flight or fight responses are triggered so much, it is truly that you're more in this survival mode.
[00:50:21] Speaker A: Yeah. And when you're in emergency measures all the time.
[00:50:24] Speaker B: Yeah, yeah. And when you're in survival mode, you can't relax. Right.
Your subconscious is constantly, constantly more concerned about its own threat, dealing with threats and all that, than it is about creativity and being relaxed and all that. So I think again, as our society has more of these quote unquote threats encroaching on it in terms of people thinking that everything is like, we're talking about all these emergency measures, everything's diabolical all the time. And this, and I think we've talked about this, the ecosystem of our media and social media and how we relate to all of that, and it's always in our face.
It stops us from actually having our minds in our emotional state for having the ability to kind of just create and look for new ideas and do things in a calm way and in a constructive way. So I think if we keep going down this road as a society, we shouldn't be surprised that those of us who are concerned about the direction over the last, let's say, 10, 15, 20 years of kind of the societal discourse, we shouldn't be surprised if it continues to spiral down that this. This kind of direction.
[00:51:39] Speaker A: Yeah, I mean, you know, I think one of the things we fix.
[00:51:42] Speaker B: How we deal with.
[00:51:42] Speaker A: How we deal with. Yeah. How we deal with each other. And. Yeah, I think then that's. And we can get out of here. But one of the things I think was when we talked about the Facebook files, and actually there's been more come out on that as far as the actual whistleblowers come forward. And that is, I think, the real sinister or concerning thing, I should say not even sinister, is just that this kind of how our brains work is kind of what Facebook and other types of things take advantage of too. And these are the things they poke at in order to keep our attention. Like, they're not doing it necessarily necessarily to. For a ultimate sinister purposes. They just wanna keep our attention. But it's the negative results that come from doing these things in order to keep our attention so that they can advertise to us, you know, like there are outcomes that are negative that almost you can say, I mean, it's not this anymore, but initially it would've been unintended consequences. Then they learned what would happen and they were like, hey, the money's good, so we can't stop. So I think that's part of the.
This stuff coming out will help us deal with this because it's like, well, what's the limit on how much someone can try to provoke us or anger us, get into our emotions to keep our attention? How much is too much? What do we need to do as a society to say, okay, that's too much? You can't do this to people in order just to keep their attention as far as how you curate and present information to them. So we'll see. I mean, like, all of this stuff, we are literally building the plane as we're flying it. So, you know, all of this stuff requires us to. To. To react as more information comes available as we see how things affect us and so forth. So from there, I think we can get out of here.
[00:53:20] Speaker B: I would just say, hold on. If we're building it as we're flying, then I just hope that those who are in charge of building are much more handier than myself because you asked me to build a plane while it's flying.
[00:53:30] Speaker A: Hey, man, I just hope we don't need 60 votes in order to figure out whether to turn the engine. Engine on.
[00:53:35] Speaker B: I just need a parachute because that plane ain't flying if I'm. Yeah, so while it's flying.
[00:53:40] Speaker A: Yeah, so.
But yeah, we can get out of here from that. But until next time, I'm James Keys.
[00:53:45] Speaker B: I'm tuned to Aquana.
[00:53:46] Speaker A: All right, thanks for joining us on this episode of Call It Like I See It. Subscribe, Rate, Review. Give us 5 stars, tell us what you think, and we'll talk to you next time.
