1 00:00:01,040 --> 00:00:04,520 Speaker 1: Welcome to you. Stuff you should know Fronhouse stuff works 2 00:00:04,519 --> 00:00:12,399 Speaker 1: dot com right, and uh, this is stuff you should 3 00:00:12,400 --> 00:00:16,760 Speaker 1: know Financial times. Yeah, and you know what, Usually I 4 00:00:16,840 --> 00:00:21,200 Speaker 1: shy away from finance, as you know. Yeah, this was 5 00:00:21,560 --> 00:00:26,079 Speaker 1: This was good though, like timely and easy to understand. 6 00:00:26,760 --> 00:00:29,440 Speaker 1: And I don't think a lot of people. Oh that's 7 00:00:29,440 --> 00:00:31,400 Speaker 1: not true. I don't know how many people I know 8 00:00:31,480 --> 00:00:33,560 Speaker 1: when people say that, I don't think many people. Most 9 00:00:33,600 --> 00:00:36,440 Speaker 1: people don't understand what I understand. But I think if 10 00:00:36,440 --> 00:00:39,280 Speaker 1: you were like me before, you probably didn't know what 11 00:00:39,320 --> 00:00:41,559 Speaker 1: the death ceiling was. And it's really not that difficult. 12 00:00:41,760 --> 00:00:43,599 Speaker 1: I mean, yeah, I had an idea what the death 13 00:00:43,640 --> 00:00:46,080 Speaker 1: ceiling was. It certainly didn't understand the nuts and bolts 14 00:00:46,120 --> 00:00:49,280 Speaker 1: of it. And I also didn't understand that it's fairly 15 00:00:49,320 --> 00:00:52,879 Speaker 1: straightforward the whole thing, yeah, or that our company or company, 16 00:00:53,720 --> 00:00:56,960 Speaker 1: how's that proportian slip our country? The way they do 17 00:00:57,000 --> 00:01:00,600 Speaker 1: business is just it's it's kind of staggered. Oh, it's 18 00:01:00,600 --> 00:01:03,520 Speaker 1: an enormous shell game. It's pretty weird that's being held 19 00:01:03,520 --> 00:01:06,280 Speaker 1: together with duct tape and bubble gum. It's disheartening and 20 00:01:06,319 --> 00:01:09,680 Speaker 1: frightening and all that stuff. So um chuck. The debt 21 00:01:09,720 --> 00:01:11,800 Speaker 1: ceiling has been around for a while, and we'll talk 22 00:01:11,800 --> 00:01:14,400 Speaker 1: about the history of it in a little while, But um, 23 00:01:14,440 --> 00:01:16,880 Speaker 1: it really kind of came into focus in two thousand 24 00:01:16,920 --> 00:01:20,959 Speaker 1: eleven there was a big fight over raising the debt ceiling, 25 00:01:20,959 --> 00:01:23,720 Speaker 1: which to that point had happened more than a hundred 26 00:01:23,760 --> 00:01:29,679 Speaker 1: times since the beginning of the twentieth century UM, and 27 00:01:29,720 --> 00:01:32,720 Speaker 1: it had been routine at any given point in time, 28 00:01:32,800 --> 00:01:35,080 Speaker 1: like it was just that ceiling needs to be raised, 29 00:01:35,080 --> 00:01:38,080 Speaker 1: Congress says, okay, raise it, and that's that. In two 30 00:01:38,440 --> 00:01:42,839 Speaker 1: eleven UM, thanks to a faction of the Republican Party 31 00:01:42,840 --> 00:01:47,200 Speaker 1: known as the Tea Party, the this very normal procedure 32 00:01:47,680 --> 00:01:50,480 Speaker 1: or routine i should say procedure of raising the death 33 00:01:50,520 --> 00:01:55,080 Speaker 1: ceiling was basically like held up and the therefore the 34 00:01:55,120 --> 00:01:58,760 Speaker 1: function of government was basically held hostage. And it happened 35 00:01:58,760 --> 00:02:05,240 Speaker 1: again in two thousand thirteen to even greater effect. But um, 36 00:02:05,560 --> 00:02:11,800 Speaker 1: what's crazy to me? After understanding and investigating what the 37 00:02:11,840 --> 00:02:16,680 Speaker 1: debt ceiling is and what's going on, I'm chilled to 38 00:02:16,760 --> 00:02:19,799 Speaker 1: say that I understand it from both sides now, Like 39 00:02:19,919 --> 00:02:22,639 Speaker 1: I get where both sides are coming from and why 40 00:02:22,720 --> 00:02:26,360 Speaker 1: the debt ceiling is this. It is literally the full 41 00:02:26,400 --> 00:02:31,519 Speaker 1: chrome on which the entire federal government, the entire country, 42 00:02:32,080 --> 00:02:34,520 Speaker 1: and not just the operations of the government, but the 43 00:02:34,520 --> 00:02:37,600 Speaker 1: whole U. S economy, and in turn, the global economy 44 00:02:38,120 --> 00:02:42,400 Speaker 1: sits rests. And if you hold up the debt ceiling, 45 00:02:43,280 --> 00:02:47,119 Speaker 1: you hold the entire global economy hostage. If you hold 46 00:02:47,200 --> 00:02:49,720 Speaker 1: up the process of raising the debt ceiling, yes, yeah, 47 00:02:49,800 --> 00:02:51,840 Speaker 1: you might hold it up like a buttress. If you 48 00:02:51,960 --> 00:02:54,959 Speaker 1: hold yes, if you're doing that, then your back hurts. 49 00:02:56,080 --> 00:02:59,040 Speaker 1: But that's that's the point. That's why it was pretty 50 00:02:59,080 --> 00:03:02,200 Speaker 1: shrewd to target the debt ceiling. But it's not just shrewdness. 51 00:03:02,720 --> 00:03:05,679 Speaker 1: Like I I understand that the people who held it 52 00:03:05,760 --> 00:03:10,560 Speaker 1: up were characterized as political terrorists. I think even if 53 00:03:10,600 --> 00:03:12,959 Speaker 1: you take that aside or not, like, it was pretty 54 00:03:13,000 --> 00:03:16,920 Speaker 1: smart that to target that, not just because that's a 55 00:03:16,960 --> 00:03:19,400 Speaker 1: great thing to hold hostage, but because you can make 56 00:03:19,440 --> 00:03:23,040 Speaker 1: a case like they're in is the greatest symbol or 57 00:03:23,120 --> 00:03:26,320 Speaker 1: functional symbol of all of the problems that are plaguing 58 00:03:26,360 --> 00:03:30,360 Speaker 1: the United States today or the solution to all of 59 00:03:30,400 --> 00:03:33,280 Speaker 1: its problems. Man, you are right down the middle on 60 00:03:33,320 --> 00:03:35,480 Speaker 1: this one, aren't you. I I truly understand it from 61 00:03:35,480 --> 00:03:38,560 Speaker 1: both sides. It's really weird. I think that's a healthy perspective. 62 00:03:38,800 --> 00:03:41,120 Speaker 1: I guess so, and maybe that's what it is. I'm like, well, 63 00:03:41,160 --> 00:03:47,680 Speaker 1: I feel healthy, healthy perspective. Uh yeah, it definitely beats uh, 64 00:03:48,880 --> 00:03:52,640 Speaker 1: hardline partisan views on things. I think when it comes 65 00:03:52,640 --> 00:03:57,160 Speaker 1: to something this huge and complicated, Well, the irony is 66 00:03:57,200 --> 00:03:59,440 Speaker 1: that the people who were holding it up or about 67 00:03:59,440 --> 00:04:02,720 Speaker 1: his hardline partisans as you can get you know. Yeah, 68 00:04:02,880 --> 00:04:07,720 Speaker 1: but the prospect of attacking the debt ceiling and focusing 69 00:04:07,840 --> 00:04:11,760 Speaker 1: light on it is I think a very smart move politically. Yeah. 70 00:04:12,200 --> 00:04:15,120 Speaker 1: So it may not make friends on the playground, No, 71 00:04:15,280 --> 00:04:18,760 Speaker 1: it definitely will not. It is effective. Yeah, okay, so Chuck, 72 00:04:18,800 --> 00:04:20,840 Speaker 1: let's talk about this. Let's talk about the debts. Let's 73 00:04:20,839 --> 00:04:23,640 Speaker 1: talk about the federal government in general and how it operates. Yeah. 74 00:04:23,640 --> 00:04:26,520 Speaker 1: There's a thing that I didn't know exist until recently. Um, 75 00:04:26,520 --> 00:04:28,880 Speaker 1: that is issued every day called the Daily Treasury Statement. 76 00:04:29,360 --> 00:04:31,279 Speaker 1: And if while we're doing this, this sounds just like 77 00:04:31,320 --> 00:04:33,840 Speaker 1: a company or just like given your own personal finance, 78 00:04:33,880 --> 00:04:36,120 Speaker 1: as as it is, it's just a large a lot 79 00:04:36,200 --> 00:04:39,680 Speaker 1: more zeros, a lot more zeros. But it's the principles 80 00:04:39,720 --> 00:04:43,320 Speaker 1: the exact same. Yeah. Um, the daily Treasury statement is 81 00:04:43,320 --> 00:04:46,760 Speaker 1: basically just the balance sheet of what we spend in 82 00:04:46,800 --> 00:04:49,400 Speaker 1: a day as a government and what we take in 83 00:04:49,400 --> 00:04:52,080 Speaker 1: in a day. So let's just pick a day at 84 00:04:52,160 --> 00:04:56,240 Speaker 1: random that's featured in this article. Okay, let's say October. Okay, 85 00:04:56,279 --> 00:04:59,520 Speaker 1: October three of last year, not too long ago. It's 86 00:04:59,520 --> 00:05:02,640 Speaker 1: a third a The sun was shining here in Atlanta. 87 00:05:02,960 --> 00:05:05,040 Speaker 1: The federal government took in about a hundred and ten 88 00:05:05,080 --> 00:05:09,200 Speaker 1: billion and revenue. We were in Los Angeles. Yeah, the 89 00:05:09,240 --> 00:05:12,360 Speaker 1: sun was shining there. Took it in about a hundred 90 00:05:12,400 --> 00:05:16,039 Speaker 1: and ten billion dollars from things like massive amounts of 91 00:05:16,040 --> 00:05:20,080 Speaker 1: taxes that we have to pay my words, bailout loan 92 00:05:20,080 --> 00:05:25,880 Speaker 1: payments from tarp uh selling old jet planes and things 93 00:05:25,920 --> 00:05:30,040 Speaker 1: and guns to other countries, about twenty seven million dollars 94 00:05:30,080 --> 00:05:33,800 Speaker 1: made on that day alone. Uh. And then we spent 95 00:05:35,160 --> 00:05:38,920 Speaker 1: a hundred and forty three billion dollars. So if we 96 00:05:39,000 --> 00:05:41,159 Speaker 1: took in a hundred and ten and we spent a 97 00:05:41,200 --> 00:05:43,400 Speaker 1: hundred and forty three billions, and we spent a hundred 98 00:05:43,400 --> 00:05:50,240 Speaker 1: and forty three on hundreds, if not thousands, of programs 99 00:05:50,240 --> 00:05:53,640 Speaker 1: just all sorts of everything from Social Security to think 100 00:05:53,680 --> 00:05:56,280 Speaker 1: made up the lions share of the the spending that day, 101 00:05:56,320 --> 00:06:01,400 Speaker 1: which was billion um down to tax refunds and not 102 00:06:01,440 --> 00:06:05,080 Speaker 1: just programs, but like you know, the electric bill at 103 00:06:05,080 --> 00:06:08,760 Speaker 1: the White House, right exactly, paying the private in the army. Yes, 104 00:06:08,920 --> 00:06:12,200 Speaker 1: like you know, everything the government pays for, which includes 105 00:06:12,200 --> 00:06:15,720 Speaker 1: a lot of programs. Uh. So that is a difference 106 00:06:15,880 --> 00:06:20,039 Speaker 1: of thirty three billion dollars in that one day, A 107 00:06:20,080 --> 00:06:23,960 Speaker 1: bad a negative difference, right, So that's a deficit we 108 00:06:24,040 --> 00:06:26,479 Speaker 1: ran on that day. We ran a deficit, which is 109 00:06:26,480 --> 00:06:31,320 Speaker 1: not unusual. Thirty three billion dollar deficit on October three. Okay, 110 00:06:31,360 --> 00:06:34,120 Speaker 1: So the rest of the three d and sixty four 111 00:06:34,200 --> 00:06:38,600 Speaker 1: days of that year fiscal or otherwise calendar, even if 112 00:06:38,600 --> 00:06:40,080 Speaker 1: we didn't let's say we had a day where we 113 00:06:40,160 --> 00:06:44,039 Speaker 1: ran a surplus. Um. You take all of those together, 114 00:06:44,279 --> 00:06:47,560 Speaker 1: You take your surpluses and your deficits for all those days, 115 00:06:48,000 --> 00:06:50,360 Speaker 1: and you add them up, and you have whether you 116 00:06:50,800 --> 00:06:53,920 Speaker 1: have a surplus or a deficit for the year. If 117 00:06:53,920 --> 00:06:56,200 Speaker 1: everything equals out, you have what's called the balanced budget 118 00:06:56,320 --> 00:06:59,240 Speaker 1: for that year, which is just doesn't happen, not not 119 00:06:59,400 --> 00:07:02,440 Speaker 1: very frequently. No, I don't see I haven't seen any balance. 120 00:07:02,520 --> 00:07:07,640 Speaker 1: I've seen like for the most part, though, we've been 121 00:07:07,680 --> 00:07:10,960 Speaker 1: in a death sit especially since um, well for many 122 00:07:10,960 --> 00:07:14,120 Speaker 1: many years. Well I've got some numbers actually, uh in 123 00:07:15,120 --> 00:07:17,840 Speaker 1: and this I'm not saying this president is good. This 124 00:07:17,880 --> 00:07:21,720 Speaker 1: president is bad because Congress in the House have probably 125 00:07:21,720 --> 00:07:23,360 Speaker 1: more to do with it than the president does. Well. 126 00:07:23,360 --> 00:07:27,040 Speaker 1: Not only that, it's possible some presidents have inherited the 127 00:07:27,040 --> 00:07:30,800 Speaker 1: the benefits of policies from other presidents, like economists don't know. Yeah, 128 00:07:31,040 --> 00:07:34,080 Speaker 1: like it very contentious to man when people start I 129 00:07:34,120 --> 00:07:36,840 Speaker 1: read a few articles. It's really pretty interesting to see 130 00:07:36,880 --> 00:07:42,560 Speaker 1: people's takes on the economies of the presidency. But in ninete, regardless, uh, 131 00:07:42,680 --> 00:07:45,880 Speaker 1: Bill Clinton inherited a two hundred and fifty five billion 132 00:07:45,920 --> 00:07:51,240 Speaker 1: dollar deficit. Uh. In two starting, we had the first 133 00:07:51,240 --> 00:07:55,480 Speaker 1: budget surplus since nineteen sixty nine, and then two years 134 00:07:55,560 --> 00:07:58,280 Speaker 1: later in two thousand, we hit the high water mark 135 00:07:59,160 --> 00:08:02,480 Speaker 1: of two hundred already six billion dollars surplus in two thousand. 136 00:08:04,240 --> 00:08:07,200 Speaker 1: I mean, that's mind boggling these days. Yeah, man, to 137 00:08:07,200 --> 00:08:09,880 Speaker 1: think about that. That means that the government, after paying 138 00:08:09,920 --> 00:08:12,440 Speaker 1: all of its bills, still had two hundred and thirty 139 00:08:12,520 --> 00:08:15,960 Speaker 1: six billion dollars left over. Yeah. And and people today 140 00:08:16,000 --> 00:08:18,800 Speaker 1: still are like Clinton got lucky because the internet boom 141 00:08:19,000 --> 00:08:21,840 Speaker 1: or no. Clinton's policies were wide or no, it was 142 00:08:21,920 --> 00:08:26,920 Speaker 1: the Republican controlled house in Congress that forced him. It 143 00:08:27,040 --> 00:08:29,040 Speaker 1: was it was kind of a lot of stuff. I 144 00:08:29,080 --> 00:08:32,920 Speaker 1: think the rational approaches, There was a lot of stuff. Regardless, 145 00:08:33,160 --> 00:08:36,200 Speaker 1: those were great years. Uh. And then so in two 146 00:08:36,200 --> 00:08:40,520 Speaker 1: thousand and two hundred thirty six billion dollars surplus. Clinton 147 00:08:40,600 --> 00:08:43,240 Speaker 1: left office with a hundred and twenty seven billion dollars surplus, 148 00:08:43,880 --> 00:08:45,839 Speaker 1: and just a year later we had a hundred and 149 00:08:45,920 --> 00:08:49,960 Speaker 1: fifty seven billion dollar deficit. And by the time Obama 150 00:08:50,000 --> 00:08:52,520 Speaker 1: came into office in two thousand nine, we had a 151 00:08:52,640 --> 00:08:57,040 Speaker 1: one point two trillion dollar deficit when he came into office. Yes, 152 00:08:57,240 --> 00:09:01,160 Speaker 1: and now it's at about seven fifty nine billion, depending 153 00:09:01,160 --> 00:09:03,200 Speaker 1: on what numbers you look at. That's just the deficit, 154 00:09:03,280 --> 00:09:06,680 Speaker 1: not the national debt. Okay, all right, So this is 155 00:09:06,840 --> 00:09:10,000 Speaker 1: this is a very big point of um clarification that 156 00:09:10,040 --> 00:09:14,800 Speaker 1: we need to make. That's the annual budget, right, Yeah, 157 00:09:14,800 --> 00:09:18,920 Speaker 1: that's the deficit. Now, when you take all of those 158 00:09:18,960 --> 00:09:22,559 Speaker 1: annual budgets over all the years, all the money we've 159 00:09:22,600 --> 00:09:24,640 Speaker 1: ever owed, all the money we've ever came out on 160 00:09:24,720 --> 00:09:27,480 Speaker 1: top with, come out on top with, and you put 161 00:09:27,520 --> 00:09:31,800 Speaker 1: it all together, you have what's called the national debt. Yeah, 162 00:09:31,800 --> 00:09:34,680 Speaker 1: that's basically the money we borrow to cover those losses. 163 00:09:35,000 --> 00:09:39,040 Speaker 1: If if we ever had if you ever took all 164 00:09:39,080 --> 00:09:41,240 Speaker 1: of those years together and we had a surplus, then 165 00:09:41,280 --> 00:09:44,160 Speaker 1: you would call it the national surplus. I don't think 166 00:09:44,200 --> 00:09:48,520 Speaker 1: that's ever happened, or ever will happen. I don't think 167 00:09:48,520 --> 00:09:52,800 Speaker 1: that's ever happened. Yeah, since we started borrowing money, even 168 00:09:52,840 --> 00:09:56,680 Speaker 1: though we've had budget surpluses, right, because let's say we've 169 00:09:56,800 --> 00:09:59,880 Speaker 1: we've had a good year two fifty billion dollars surp 170 00:10:00,120 --> 00:10:04,079 Speaker 1: us year. That's a great year, but we also maybe 171 00:10:04,080 --> 00:10:06,880 Speaker 1: had five trillion dollars in national debt that that had 172 00:10:06,880 --> 00:10:10,840 Speaker 1: to be thrown at. Right, So, when you take all 173 00:10:10,880 --> 00:10:12,920 Speaker 1: of those deficits, in all the surpluses, and you add 174 00:10:12,920 --> 00:10:15,040 Speaker 1: them all together, what you come up with is how 175 00:10:15,120 --> 00:10:17,480 Speaker 1: much in the hole the United States is, and that 176 00:10:17,640 --> 00:10:20,080 Speaker 1: is the national debt. And as it stands right now, 177 00:10:20,920 --> 00:10:26,760 Speaker 1: it's add about seventeen trillion, two hundred and eighty two billion, 178 00:10:27,400 --> 00:10:34,160 Speaker 1: five hundred and seventy five million, zero forty four thousand, 179 00:10:34,400 --> 00:10:38,200 Speaker 1: seven hundred and fifty five dollars and thirty five cents. 180 00:10:38,720 --> 00:10:42,920 Speaker 1: That's as of January two thousand, fourteen, and with every 181 00:10:42,960 --> 00:10:45,400 Speaker 1: minute getting more and more so it's tired now than 182 00:10:45,400 --> 00:10:47,560 Speaker 1: it was when you read it, which is a pretty 183 00:10:47,600 --> 00:10:52,200 Speaker 1: significant amount, especially if you consider that in two thousand 184 00:10:53,240 --> 00:10:56,160 Speaker 1: it was at about five trillion. Yeah, you know a 185 00:10:56,280 --> 00:10:57,960 Speaker 1: number is bad when you have to look at it 186 00:10:58,000 --> 00:11:01,920 Speaker 1: from right to left and counting to zeros, like I 187 00:11:01,960 --> 00:11:04,760 Speaker 1: gotta see what the thousands of millions of billions? Okay, 188 00:11:04,960 --> 00:11:08,280 Speaker 1: oh that's trillions. Yeah, so if you if you think 189 00:11:08,320 --> 00:11:10,400 Speaker 1: about that, I mean, think about that, chuck in. In 190 00:11:10,640 --> 00:11:16,720 Speaker 1: just fourteen years, like we've gone up well over twelve 191 00:11:17,320 --> 00:11:23,160 Speaker 1: trillion dollars in debt, twelve trillion dollars, our national debt 192 00:11:23,600 --> 00:11:27,880 Speaker 1: has increased by that much. And so now we kind 193 00:11:27,920 --> 00:11:31,280 Speaker 1: of come to my intro again, if you'll indulge me 194 00:11:31,320 --> 00:11:35,959 Speaker 1: for a second, if you look at the increase. Right, 195 00:11:36,080 --> 00:11:38,640 Speaker 1: of course, there were there were two wars that we 196 00:11:38,720 --> 00:11:43,400 Speaker 1: fought there EXPI that definitely did that didn't help anything 197 00:11:43,400 --> 00:11:45,840 Speaker 1: at all. Like it started, Flint was not at war. 198 00:11:45,920 --> 00:11:47,800 Speaker 1: So that was a lot of people to say, you know, 199 00:11:47,920 --> 00:11:50,160 Speaker 1: those were eight peaceful years. I think they call it 200 00:11:50,200 --> 00:11:56,920 Speaker 1: a piece okay, Yeah. Clayton preferred the surgical um air strike. 201 00:11:57,160 --> 00:11:59,680 Speaker 1: That was his big thing, rather than troops and relying 202 00:11:59,720 --> 00:12:04,600 Speaker 1: on though. Um. But it was so wars they cost 203 00:12:04,720 --> 00:12:07,000 Speaker 1: quite a bit of money, so we were fighting not one, 204 00:12:07,040 --> 00:12:09,520 Speaker 1: but two wars. Then all of a sudden you have 205 00:12:09,760 --> 00:12:13,600 Speaker 1: the global markets just go into the toilet. And now 206 00:12:13,600 --> 00:12:15,760 Speaker 1: all of a sudden, you have a lot of people 207 00:12:16,000 --> 00:12:19,760 Speaker 1: who are unemployed, which means your tax revenue goes down, 208 00:12:21,000 --> 00:12:26,000 Speaker 1: and you have in the in the office a president 209 00:12:26,080 --> 00:12:31,599 Speaker 1: who believes in spending your way out of a crisis, 210 00:12:31,960 --> 00:12:35,200 Speaker 1: a debt crisis. And this is why the Tea Party 211 00:12:35,280 --> 00:12:40,280 Speaker 1: hijacked the the debt ceiling because a lot of people 212 00:12:40,320 --> 00:12:43,120 Speaker 1: are saying, we don't agree with you. There's a lot 213 00:12:43,160 --> 00:12:45,520 Speaker 1: of people who believe in austerity, which is you cut 214 00:12:45,600 --> 00:12:49,640 Speaker 1: government spending to get your way out of a crisis. Um. 215 00:12:49,679 --> 00:12:52,480 Speaker 1: And if you look at Greece, that pretty much proved 216 00:12:52,520 --> 00:12:54,800 Speaker 1: that you can't do that, that it will just completely 217 00:12:54,840 --> 00:12:58,200 Speaker 1: destroy your economy and possibly your entire government. And that 218 00:12:58,320 --> 00:13:01,880 Speaker 1: was actually based on a paper by a couple of economists, 219 00:13:02,400 --> 00:13:08,200 Speaker 1: um who came out with this data that any government 220 00:13:08,360 --> 00:13:12,080 Speaker 1: whose debt to income ratio was if your debt was 221 00:13:12,760 --> 00:13:15,440 Speaker 1: you GDP, you didn't grow as fast and so all 222 00:13:15,440 --> 00:13:18,240 Speaker 1: of a sudden you had all these people saying austerity, austerity, 223 00:13:18,320 --> 00:13:21,000 Speaker 1: And then it turned out that this grad student from 224 00:13:21,040 --> 00:13:23,960 Speaker 1: I believe m y u Um got ahold of the 225 00:13:23,960 --> 00:13:26,360 Speaker 1: original data set and basically saw that they didn't carry 226 00:13:26,440 --> 00:13:30,160 Speaker 1: like a zero and got an incorrect thing. And the 227 00:13:30,160 --> 00:13:35,880 Speaker 1: the government of Greece almost toppled because of this incorrect paper. Yeah, 228 00:13:36,440 --> 00:13:38,800 Speaker 1: but at the time, there are a lot of people saying, well, 229 00:13:38,840 --> 00:13:42,400 Speaker 1: first of all, we don't agree with deficit spending as 230 00:13:42,400 --> 00:13:46,359 Speaker 1: a means of getting out of an economic problem. Um. 231 00:13:46,400 --> 00:13:50,280 Speaker 1: But also you have some other people saying we maybe 232 00:13:50,320 --> 00:13:52,720 Speaker 1: that works, maybe it doesn't. History hasn't proven that yet. 233 00:13:52,880 --> 00:13:55,760 Speaker 1: We still think as twelve trillion dollar increase in the 234 00:13:55,840 --> 00:13:59,280 Speaker 1: national deficit is too much, so we need to curb 235 00:13:59,320 --> 00:14:03,200 Speaker 1: this runaways spending. And one way to do that is 236 00:14:03,240 --> 00:14:06,959 Speaker 1: to target the debt ceiling. Yeah, and debt ceiling, I 237 00:14:07,000 --> 00:14:10,480 Speaker 1: don't even think we've even said specifically, is basically the 238 00:14:10,520 --> 00:14:16,320 Speaker 1: maximum amount of of deficit that we can incur. And 239 00:14:16,360 --> 00:14:19,680 Speaker 1: we literally it's got a ceiling. When we borrow or 240 00:14:19,720 --> 00:14:21,800 Speaker 1: when we have a deficit that hits that, we're at 241 00:14:21,840 --> 00:14:24,400 Speaker 1: the debt ceiling. And the only way to to change 242 00:14:24,440 --> 00:14:27,800 Speaker 1: that is, uh for Congress, like we said, to to 243 00:14:27,920 --> 00:14:30,760 Speaker 1: raise the debt ceiling, which has happened, Um, how many 244 00:14:30,760 --> 00:14:34,320 Speaker 1: times I think at least a hundred times since it started. Well, 245 00:14:34,360 --> 00:14:38,400 Speaker 1: since nineteen sixty they voted seventy eight times. So let's 246 00:14:38,440 --> 00:14:41,280 Speaker 1: call that modern times. Yeah, because okay, So, no matter 247 00:14:41,320 --> 00:14:43,560 Speaker 1: what your politics are, no matter what's going on, no 248 00:14:43,600 --> 00:14:46,560 Speaker 1: matter whose president, this is the way the federal government 249 00:14:46,600 --> 00:14:48,360 Speaker 1: is set up. You have a bunch of money going out. 250 00:14:48,760 --> 00:14:50,840 Speaker 1: You have a bunch of money coming in, usually in 251 00:14:50,840 --> 00:14:53,120 Speaker 1: the form of income tax or like you said, selling 252 00:14:53,120 --> 00:14:56,280 Speaker 1: old fighter jets or that kind of thing. Um, And 253 00:14:56,400 --> 00:15:00,240 Speaker 1: the amount you have coming in very very rarely seeds 254 00:15:00,280 --> 00:15:02,800 Speaker 1: the amount you're putting out. So there's two things you 255 00:15:02,840 --> 00:15:06,560 Speaker 1: can do. You can increase your income, or you can 256 00:15:06,600 --> 00:15:10,600 Speaker 1: cut your spending and raise taxes right so, um the well, 257 00:15:10,680 --> 00:15:13,440 Speaker 1: increasing income by raising taxes right exactly, or you can 258 00:15:13,480 --> 00:15:16,640 Speaker 1: cut your spending. We have two political parties. One is 259 00:15:16,680 --> 00:15:21,600 Speaker 1: completely attached to not increasing taxes, the other one is 260 00:15:21,680 --> 00:15:26,120 Speaker 1: completely attached to not cutting spending, especially on entitlement programs. 261 00:15:26,680 --> 00:15:30,120 Speaker 1: So it doesn't matter who's in office these days. The 262 00:15:30,160 --> 00:15:33,040 Speaker 1: way that things operate is you just go borrow more money. 263 00:15:33,480 --> 00:15:36,360 Speaker 1: That's how you fund the government. That's how it's been done, 264 00:15:36,440 --> 00:15:40,920 Speaker 1: that's how you've gotten around the politics to this point. Yeah, 265 00:15:41,080 --> 00:15:43,080 Speaker 1: and we could, you know, Congress could erase that, you 266 00:15:43,120 --> 00:15:46,400 Speaker 1: know by like you said, raising taxes that's not popular, 267 00:15:47,520 --> 00:15:50,280 Speaker 1: or cutting spending and that that's not popular. So it's 268 00:15:50,280 --> 00:15:52,640 Speaker 1: really kind of a bad situation. So what we have 269 00:15:52,800 --> 00:15:57,600 Speaker 1: is the U. S. Treasury, which issues death that's right, 270 00:15:57,760 --> 00:16:02,720 Speaker 1: US Treasury securities to people regular old schmos. Well not 271 00:16:02,800 --> 00:16:06,120 Speaker 1: regular lord schmos. No, we can well, that's true, that's true. 272 00:16:06,240 --> 00:16:11,520 Speaker 1: You can go buy a US Treasury bond, banks, corporations, governments. UM. 273 00:16:11,560 --> 00:16:16,080 Speaker 1: It's basically a very low interest rate loan and uh, 274 00:16:16,200 --> 00:16:20,480 Speaker 1: you know, up until recently a very very safe one, right, 275 00:16:20,600 --> 00:16:22,520 Speaker 1: and you would still think it's pretty safe. But you know, 276 00:16:23,120 --> 00:16:25,280 Speaker 1: that could go off the cliff. It could. And that 277 00:16:25,320 --> 00:16:28,400 Speaker 1: was the big problem in October of two thousand thirteen 278 00:16:28,480 --> 00:16:30,520 Speaker 1: is a lot of people were saying, like, um, we're 279 00:16:30,520 --> 00:16:33,880 Speaker 1: gonna default on our loan obligations. Yeah, we'll get to 280 00:16:33,920 --> 00:16:36,840 Speaker 1: that though, because that's the bad news at the end. 281 00:16:37,640 --> 00:16:40,200 Speaker 1: This is the bad news in the middle. Uh, China 282 00:16:40,240 --> 00:16:42,720 Speaker 1: and Japan, for instance, UM each owned more than a 283 00:16:42,720 --> 00:16:46,760 Speaker 1: trillion dollars in Treasury securities as of July last year, 284 00:16:48,240 --> 00:16:51,040 Speaker 1: So a lot of people borrow money from the United 285 00:16:51,080 --> 00:16:54,560 Speaker 1: States at pretty low rates. I think it's it's worth 286 00:16:54,680 --> 00:16:59,920 Speaker 1: explaining again, like a Treasury bond, is you chuck going 287 00:17:00,080 --> 00:17:02,920 Speaker 1: to buy going to the U. S. Government saying here, 288 00:17:02,920 --> 00:17:05,720 Speaker 1: I'll give you some money. You give me a promisory 289 00:17:05,800 --> 00:17:08,240 Speaker 1: note that says you'll repay it with a little bit 290 00:17:08,320 --> 00:17:11,520 Speaker 1: extra big right at the at the end when this 291 00:17:11,560 --> 00:17:14,480 Speaker 1: thing matures, and the government says, thanks, we're gonna take 292 00:17:14,520 --> 00:17:16,480 Speaker 1: this money and we're going to use it to pay 293 00:17:16,480 --> 00:17:20,080 Speaker 1: our bills. Because Congress is going over and saying, yes, 294 00:17:20,160 --> 00:17:22,240 Speaker 1: we want to keep our national parks open, and we 295 00:17:22,320 --> 00:17:28,760 Speaker 1: want to um, we want to fund um like security whatever, um. 296 00:17:28,800 --> 00:17:31,000 Speaker 1: And we have bills to pay. So thanks for the money. 297 00:17:31,160 --> 00:17:33,440 Speaker 1: We're gonna pay the bills because that's what Treasury does. 298 00:17:33,560 --> 00:17:36,159 Speaker 1: Congress spend the money. Treasury pays the money, and if 299 00:17:36,160 --> 00:17:39,320 Speaker 1: you're under that ceiling, then it's it's it's all good. Yeah, 300 00:17:39,320 --> 00:17:41,000 Speaker 1: it's fine, just figure out a way to pay the bills. 301 00:17:41,000 --> 00:17:43,480 Speaker 1: And it's just like a big company. And Treasury also 302 00:17:43,520 --> 00:17:46,160 Speaker 1: has more than one financial security. They have all sorts 303 00:17:46,160 --> 00:17:48,879 Speaker 1: of ones that different that mature at different times and 304 00:17:48,920 --> 00:17:52,920 Speaker 1: all that, and um, they do a pretty good job 305 00:17:52,960 --> 00:17:57,000 Speaker 1: of figuring out how to raise money. But the problem 306 00:17:57,119 --> 00:18:01,160 Speaker 1: is for every Treasury bill that they sell, Chuck, that's 307 00:18:01,680 --> 00:18:04,600 Speaker 1: that much more in debt. The federal government has just 308 00:18:04,640 --> 00:18:08,240 Speaker 1: gone yeah, okay with the debt ceiling. Like you said, 309 00:18:08,440 --> 00:18:12,560 Speaker 1: there is a certain limit to the amount of outstanding 310 00:18:12,600 --> 00:18:15,920 Speaker 1: debt the Treasury Department can issue, and it's just like 311 00:18:16,040 --> 00:18:20,040 Speaker 1: a credit card limit to an extent. Yeah, there's there's 312 00:18:20,080 --> 00:18:23,439 Speaker 1: one pretty big difference is um. But it is a 313 00:18:23,440 --> 00:18:25,240 Speaker 1: helpful way to think about it because most people have 314 00:18:25,280 --> 00:18:27,879 Speaker 1: credit cards. But the bank sets your credit card limit 315 00:18:27,880 --> 00:18:31,439 Speaker 1: because they say, Josh, you know you're risky as a spender. 316 00:18:31,440 --> 00:18:32,719 Speaker 1: We don't want to give you a credit card more 317 00:18:32,760 --> 00:18:35,200 Speaker 1: than like Tim Grant. Let's say, yeah, so the bank 318 00:18:35,359 --> 00:18:37,840 Speaker 1: puts the cap on it. There. Um. On the other 319 00:18:37,840 --> 00:18:42,120 Speaker 1: side of the coin, foreign governments that by treasury securities 320 00:18:42,320 --> 00:18:45,960 Speaker 1: are like, I'll take all you got basically, so it's 321 00:18:46,000 --> 00:18:49,320 Speaker 1: a reliable investment. And the credit limit is imposed by 322 00:18:49,320 --> 00:18:51,880 Speaker 1: the borrow instead of the lender. Right, that's the big 323 00:18:51,920 --> 00:18:55,080 Speaker 1: difference with with your credit card. It's the person lending 324 00:18:55,080 --> 00:18:57,960 Speaker 1: you the money that wants to say that that says no, 325 00:18:58,119 --> 00:19:02,639 Speaker 1: you can't borrow anymore. With the debt ceiling, it's us 326 00:19:02,680 --> 00:19:05,679 Speaker 1: saying no, we can't. We can't go borrow anymore. We 327 00:19:05,760 --> 00:19:07,920 Speaker 1: could issue as much as we wanted, and people would 328 00:19:07,920 --> 00:19:12,440 Speaker 1: buy teabills all day long because they're so safe. That's right, 329 00:19:12,480 --> 00:19:15,320 Speaker 1: supposedly or at the moment they are. All right, you 330 00:19:15,320 --> 00:19:16,760 Speaker 1: want to talk about the history a little bit, Well, 331 00:19:16,800 --> 00:19:19,320 Speaker 1: hold one, before we talk history, let's do a message 332 00:19:19,320 --> 00:19:28,400 Speaker 1: break real quick, okay, And now we are talking about 333 00:19:28,440 --> 00:19:30,640 Speaker 1: the history of the death ceiling, right. I think that's 334 00:19:30,640 --> 00:19:34,879 Speaker 1: where we left off. Back in the day, UM, Congress 335 00:19:35,000 --> 00:19:37,639 Speaker 1: used to be a little tighter with this, a lot tighter. 336 00:19:37,680 --> 00:19:42,320 Speaker 1: In fact, we could not sell securities without explicit approval. 337 00:19:43,280 --> 00:19:47,240 Speaker 1: UH Treasury wanted to borrow some money, so Congress would say, Hey, 338 00:19:47,600 --> 00:19:50,240 Speaker 1: what kind of security should we sell? Large or small? 339 00:19:50,359 --> 00:19:53,440 Speaker 1: What should the interest rate be? Um? How many should 340 00:19:53,440 --> 00:19:55,439 Speaker 1: we sell? And they kind of worked it out that 341 00:19:55,480 --> 00:20:00,320 Speaker 1: way up until UH war In War Revenue Act of 342 00:20:02,200 --> 00:20:04,359 Speaker 1: basically said, you know what, in times of war, we 343 00:20:04,400 --> 00:20:07,720 Speaker 1: need to loosen the chains a little bit, and let's 344 00:20:07,720 --> 00:20:10,040 Speaker 1: say we can borrow up to five hundred million dollars 345 00:20:10,359 --> 00:20:14,560 Speaker 1: by some of these securities to fund the Spanish American War, right, 346 00:20:15,160 --> 00:20:17,359 Speaker 1: And then after that they were like, okay, that worked, 347 00:20:17,400 --> 00:20:20,359 Speaker 1: but let's just leave that be. And then there was 348 00:20:20,400 --> 00:20:23,399 Speaker 1: World War One, and there was the First and Second 349 00:20:23,480 --> 00:20:26,919 Speaker 1: Liberty Bonds Acts, which basically did the same thing to 350 00:20:26,960 --> 00:20:30,119 Speaker 1: help fund World War One, and it worked really well. 351 00:20:30,160 --> 00:20:34,560 Speaker 1: And the secretaries of the Treasury, um, I think Andrew 352 00:20:35,119 --> 00:20:40,240 Speaker 1: Carnegie Mellon. Andrew Mellon, Yeah, you can understand why I 353 00:20:40,280 --> 00:20:43,720 Speaker 1: would be confused there, um. And Henry Morgan Thou later 354 00:20:43,840 --> 00:20:46,840 Speaker 1: on in the nineteen twenties and thirties basically said why 355 00:20:46,920 --> 00:20:49,280 Speaker 1: not just do this to fund the government as as 356 00:20:49,280 --> 00:20:52,520 Speaker 1: a whole instead of just in times of war? And 357 00:20:52,720 --> 00:20:54,640 Speaker 1: now today, if you could go back and sit down 358 00:20:54,720 --> 00:20:58,520 Speaker 1: with him, you could say, because it gets out of 359 00:20:58,560 --> 00:21:02,199 Speaker 1: control when you do, because it's right. Um. But they 360 00:21:02,320 --> 00:21:05,840 Speaker 1: got uh was it Franklin? Yeah, fdr Yeah, they got 361 00:21:06,000 --> 00:21:09,680 Speaker 1: Roosevelt on on board, and they got Congress to pass 362 00:21:09,840 --> 00:21:13,800 Speaker 1: this for the first time ever, an aggregate debt limit, 363 00:21:13,960 --> 00:21:17,160 Speaker 1: which is all the debts that the U s ode 364 00:21:17,760 --> 00:21:21,119 Speaker 1: as long as it was beneath a certain amount um. 365 00:21:21,600 --> 00:21:24,479 Speaker 1: The Treasury could do whatever it wanted to pay its 366 00:21:24,560 --> 00:21:26,560 Speaker 1: bills as long as it didn't need to borrow any 367 00:21:26,600 --> 00:21:28,520 Speaker 1: more than that. And that was the first time that 368 00:21:28,640 --> 00:21:31,840 Speaker 1: a debt ceiling was ever set in nine I think, yeah, 369 00:21:31,920 --> 00:21:34,320 Speaker 1: thirty nine, and that was It's pretty similar to kind 370 00:21:34,320 --> 00:21:37,439 Speaker 1: of the debt ceiling that we have today. Not too different. Uh, 371 00:21:38,040 --> 00:21:41,000 Speaker 1: Congress approved spending. Treasury figures out how to pay for 372 00:21:41,080 --> 00:21:43,080 Speaker 1: it all. As long as you're under that, it's all good. 373 00:21:43,600 --> 00:21:45,320 Speaker 1: The problem is when you bump up against it, like 374 00:21:45,440 --> 00:21:49,600 Speaker 1: we've been doing over and over again lately, it seems like, yeah, so, 375 00:21:50,520 --> 00:21:52,960 Speaker 1: like you said, that is a problem, you just vote 376 00:21:53,000 --> 00:21:56,840 Speaker 1: to raise it. Yes, and again. This has been pretty routine. 377 00:21:57,119 --> 00:22:02,120 Speaker 1: You know, a hundred times since the the the nineteen thirties, 378 00:22:04,040 --> 00:22:07,280 Speaker 1: a hundred times these things been lifted. Um, and you 379 00:22:07,440 --> 00:22:10,600 Speaker 1: just say, okay, well, just go issue some more debt. 380 00:22:10,920 --> 00:22:13,560 Speaker 1: People want the debt, people want to lend us money, 381 00:22:14,240 --> 00:22:16,800 Speaker 1: So go issue some more debt and we can keep 382 00:22:16,840 --> 00:22:19,159 Speaker 1: paying our bills. Because here's the thing with the debt ceiling. 383 00:22:21,080 --> 00:22:23,200 Speaker 1: When you raise the debt ceiling, a lot of people 384 00:22:23,240 --> 00:22:25,359 Speaker 1: are like, well, if you don't raise the debt ceiling, 385 00:22:25,400 --> 00:22:30,760 Speaker 1: it curbs spending. That's true. Indirectly, what the Treasury is 386 00:22:30,800 --> 00:22:34,760 Speaker 1: doing is paying for stuff that we've already received on credit, 387 00:22:35,359 --> 00:22:38,160 Speaker 1: whether it's you know, meals for soldiers from a private 388 00:22:38,240 --> 00:22:45,360 Speaker 1: contractor to you know, a bunch of like Boeing jets, whatever, 389 00:22:45,800 --> 00:22:48,520 Speaker 1: We've already received these things, and now Treasury has to pay. 390 00:22:49,400 --> 00:22:53,400 Speaker 1: So if if you don't extend the debt ceiling, then 391 00:22:53,480 --> 00:22:57,359 Speaker 1: you're defaulting on uh payments. You have to make bills, 392 00:22:57,400 --> 00:23:00,440 Speaker 1: you have to pay, just like you your credit card exactly. 393 00:23:00,680 --> 00:23:02,840 Speaker 1: And that's not good. And it's kind of the same 394 00:23:02,880 --> 00:23:06,760 Speaker 1: thing happens really if we default. Uh, Well, here's what happens. 395 00:23:06,800 --> 00:23:08,520 Speaker 1: If we don't raise the debt ceiling and we are 396 00:23:08,600 --> 00:23:14,840 Speaker 1: in danger of defaulting, we uh defaulting would basically start 397 00:23:14,960 --> 00:23:19,200 Speaker 1: raising all other interest rates across the board, well, the 398 00:23:19,320 --> 00:23:23,320 Speaker 1: Marke loan rates, UH, basically anything your average Joe would 399 00:23:23,320 --> 00:23:25,399 Speaker 1: go and get alone for your your rates are going 400 00:23:25,440 --> 00:23:27,240 Speaker 1: to go up, right, And the reason why is because 401 00:23:27,320 --> 00:23:31,440 Speaker 1: the ten year Treasury note um is what the home 402 00:23:31,520 --> 00:23:36,920 Speaker 1: loan rates are tied to. And if the value or 403 00:23:36,960 --> 00:23:41,880 Speaker 1: the credit rating of a T bill goes down, then 404 00:23:42,320 --> 00:23:44,879 Speaker 1: the people who are lending money and return for a 405 00:23:44,920 --> 00:23:46,720 Speaker 1: T bill are going to be able to say, like, yeah, 406 00:23:46,760 --> 00:23:48,320 Speaker 1: I'll give you some money, but you're a little more 407 00:23:48,440 --> 00:23:50,280 Speaker 1: risky than you were before. So I want to hire 408 00:23:50,359 --> 00:23:53,440 Speaker 1: percentage rate and interest, which means it's more expensive for 409 00:23:53,520 --> 00:23:56,920 Speaker 1: the government to borrow money. And if the percentage of 410 00:23:57,040 --> 00:23:59,920 Speaker 1: interest goes up on the T bill, anything that's attached 411 00:24:00,000 --> 00:24:03,800 Speaker 1: to that, like home loans, business loans go up as well, 412 00:24:04,160 --> 00:24:08,840 Speaker 1: which means what well, that means everybody suffers and the 413 00:24:08,920 --> 00:24:13,880 Speaker 1: whole country goes into an economic drag and maybe even worse. Yeah, 414 00:24:13,880 --> 00:24:15,280 Speaker 1: it could get a lot worse. Did you see that 415 00:24:15,400 --> 00:24:19,200 Speaker 1: that thing I sent to you from Forbes. Yeah, so 416 00:24:19,560 --> 00:24:21,919 Speaker 1: a lot of people were saying in October, like, oh, 417 00:24:22,040 --> 00:24:24,960 Speaker 1: going over defaulting on our debt, that's not that big 418 00:24:25,000 --> 00:24:28,000 Speaker 1: of a deal. You know, it's a colossal deal. It 419 00:24:28,040 --> 00:24:30,480 Speaker 1: doesn't matter what your politics are. One thing could happen 420 00:24:30,560 --> 00:24:32,880 Speaker 1: is we could actually lose our credit triple a credit rating, 421 00:24:32,880 --> 00:24:36,280 Speaker 1: which would be horrible. It would be horrible because people 422 00:24:36,359 --> 00:24:38,960 Speaker 1: who buy TEA bills would be able to say, I 423 00:24:39,040 --> 00:24:41,320 Speaker 1: want to hire interest, right, yeah, they still want to 424 00:24:41,359 --> 00:24:43,439 Speaker 1: borrow the money. They would just stick it to us, 425 00:24:43,760 --> 00:24:46,239 Speaker 1: right right. But the thing is to make it more 426 00:24:46,320 --> 00:24:48,760 Speaker 1: attractive because fewer people would want to borrow money, so 427 00:24:48,840 --> 00:24:50,520 Speaker 1: to make it more attractive, the government would have to 428 00:24:50,640 --> 00:24:53,640 Speaker 1: raise interest rate on what it paid back. Right um, 429 00:24:54,400 --> 00:24:58,359 Speaker 1: Also the T bills. If everything just went off the 430 00:24:58,440 --> 00:25:00,399 Speaker 1: cliff and and the government said, you know what, we 431 00:25:00,480 --> 00:25:03,920 Speaker 1: can't pay back this debt, any T bill you hold 432 00:25:04,280 --> 00:25:07,119 Speaker 1: would be as valueless as any other T bill. No 433 00:25:07,200 --> 00:25:10,080 Speaker 1: one would know what they were maybe going to eventually 434 00:25:10,160 --> 00:25:13,520 Speaker 1: repay what was worth what they so they would all 435 00:25:13,600 --> 00:25:17,680 Speaker 1: in effect become worthless. The problem is not only do 436 00:25:17,920 --> 00:25:21,359 Speaker 1: entire federal govern or foreign governments rely on tea bills 437 00:25:21,440 --> 00:25:26,400 Speaker 1: for you know, their reserves, so do banks. Banks also 438 00:25:26,520 --> 00:25:30,159 Speaker 1: used T bills as collateral for overnight loans. Sometimes companies 439 00:25:30,200 --> 00:25:32,439 Speaker 1: cash them in because they need to be more liquid. 440 00:25:32,680 --> 00:25:35,359 Speaker 1: Right So, there's a lot of use of T bills 441 00:25:35,440 --> 00:25:39,119 Speaker 1: that's totally entrenched in the economy. And if all of 442 00:25:39,200 --> 00:25:42,600 Speaker 1: a sudden they went valueless because the government defaulted on 443 00:25:42,720 --> 00:25:47,200 Speaker 1: its loans obligations on its debt, then that would be 444 00:25:47,320 --> 00:25:51,080 Speaker 1: that like the the entire banking system would lose at 445 00:25:51,160 --> 00:25:55,639 Speaker 1: least a third of its collateral it's it's reserves, and 446 00:25:56,119 --> 00:25:59,200 Speaker 1: they would actually probably be hold holding these things illegally 447 00:25:59,280 --> 00:26:00,920 Speaker 1: so they'd have to get rid of them, so they'd 448 00:26:00,920 --> 00:26:03,280 Speaker 1: be selling these things off for whatever they could, and 449 00:26:03,400 --> 00:26:08,200 Speaker 1: a genuine collapse of the markets. Whereas this Ford writer 450 00:26:08,680 --> 00:26:12,920 Speaker 1: puts it, um it would make the what happened in 451 00:26:12,960 --> 00:26:15,040 Speaker 1: two thousand and eight after the Lehman debacle look like 452 00:26:15,080 --> 00:26:20,080 Speaker 1: a children's exercise. It would be catastrophic cats and dogs 453 00:26:20,160 --> 00:26:24,800 Speaker 1: living together. And that's really not hyperbole, Like that's obviously 454 00:26:24,880 --> 00:26:27,480 Speaker 1: the worst case scenario. But the point is these T 455 00:26:27,680 --> 00:26:31,080 Speaker 1: bills are so entrenched in the global economy. They'd just 456 00:26:31,200 --> 00:26:36,240 Speaker 1: be if they became valueless, so too would the global economy. Yeah, 457 00:26:36,280 --> 00:26:41,520 Speaker 1: I wonder how you regain your credit rating. I don't know, sure, 458 00:26:41,560 --> 00:26:44,600 Speaker 1: it's probably much the same as an individual, you know. 459 00:26:45,640 --> 00:26:49,720 Speaker 1: Uh So, one thing that would happen if we decided 460 00:26:49,760 --> 00:26:52,720 Speaker 1: not to raise the debt ceiling is Congress would have 461 00:26:52,800 --> 00:26:55,359 Speaker 1: to operate within a budget, which means the things that 462 00:26:55,400 --> 00:26:58,200 Speaker 1: we were talking about before, like huge spinning cuts or 463 00:26:58,280 --> 00:27:03,040 Speaker 1: raising taxes both probably or both. And that's just tricky politics. 464 00:27:03,160 --> 00:27:05,520 Speaker 1: People would get upset, like what programs do you cut? 465 00:27:05,960 --> 00:27:09,720 Speaker 1: Whose taxes do you raise? It's just a very dangerous game. 466 00:27:10,000 --> 00:27:12,960 Speaker 1: They'd be very very deep cuts too. Yeah, and the 467 00:27:13,040 --> 00:27:15,880 Speaker 1: problem is is any time, um, the federal government makes 468 00:27:15,960 --> 00:27:18,680 Speaker 1: huge cuts so to do corporations, and then all of 469 00:27:18,720 --> 00:27:21,040 Speaker 1: a sudden, unemployment goes up, so you have to raise 470 00:27:21,080 --> 00:27:23,800 Speaker 1: taxes even further because there's fewer people who are employed 471 00:27:23,880 --> 00:27:26,960 Speaker 1: paying taxes, and or they may fall onto the teeth 472 00:27:27,000 --> 00:27:30,800 Speaker 1: of the government as well. Yeah, because they're unemployed. Yeah. Man, 473 00:27:31,680 --> 00:27:35,720 Speaker 1: should we be worried, No, because they're going to vote 474 00:27:35,800 --> 00:27:38,240 Speaker 1: to raise the dead every time. Yeah, there's no way 475 00:27:38,280 --> 00:27:41,280 Speaker 1: that they would ever default. It would just be too again, 476 00:27:41,440 --> 00:27:45,439 Speaker 1: catastrophically bad. Yeah. I think though, you can be worried 477 00:27:45,440 --> 00:27:48,679 Speaker 1: about continuing on like this. Yeah, I mean that has 478 00:27:48,760 --> 00:27:51,680 Speaker 1: to pay. Uh, you gotta pay it at some point 479 00:27:51,720 --> 00:27:53,679 Speaker 1: down the road. Yeah. You know. Um, there was one 480 00:27:53,720 --> 00:27:55,920 Speaker 1: thing we didn't quite touch on that I think really 481 00:27:55,960 --> 00:27:59,760 Speaker 1: kind of reveals just what a big shell game this is. Right. So, again, 482 00:28:00,000 --> 00:28:01,720 Speaker 1: if you don't want to raise taxes and you don't 483 00:28:01,760 --> 00:28:04,920 Speaker 1: want to cut um programs, you just go to the 484 00:28:04,960 --> 00:28:08,119 Speaker 1: treasury to get more money. Well, if the treasury doesn't 485 00:28:08,160 --> 00:28:10,920 Speaker 1: have that much more money, you can also go to 486 00:28:11,040 --> 00:28:15,920 Speaker 1: your own accounts and take whatever you can. So Social Security, 487 00:28:16,000 --> 00:28:18,840 Speaker 1: for example, there's a trust fund and you're not allowed 488 00:28:18,880 --> 00:28:22,359 Speaker 1: to take from Social Security except to a certain amount. Right, 489 00:28:22,640 --> 00:28:25,119 Speaker 1: So say social Security at any time has to have 490 00:28:25,560 --> 00:28:29,520 Speaker 1: two billion dollars. What that's a ridiculously low number. Let's 491 00:28:29,520 --> 00:28:32,640 Speaker 1: say it's two billion, and then one day social Security 492 00:28:32,760 --> 00:28:36,399 Speaker 1: has two billion, one million and its accounts. Federal government 493 00:28:36,480 --> 00:28:39,040 Speaker 1: takes that extra hundred million because it's over and above 494 00:28:39,120 --> 00:28:43,000 Speaker 1: the legal mandate and then uses it for whatever else. Well, 495 00:28:43,040 --> 00:28:47,040 Speaker 1: it gets social Security from payroll, right from payroll taxes 496 00:28:47,200 --> 00:28:51,080 Speaker 1: through you being employed. So it's another that's basically like 497 00:28:51,160 --> 00:28:54,280 Speaker 1: a hidden tax, that's like a hidden way of generating revenue. 498 00:28:54,840 --> 00:28:59,600 Speaker 1: Increasing social Security tax isn't actually helping social Security, it's 499 00:29:00,000 --> 00:29:03,520 Speaker 1: helping fund this the government. That's just like hemorrhaging money 500 00:29:03,640 --> 00:29:07,320 Speaker 1: left and right. Yeah, it sounds like you know the 501 00:29:07,360 --> 00:29:10,040 Speaker 1: old saying robbing Peter to pay Paul. That's exactly right. 502 00:29:10,760 --> 00:29:12,360 Speaker 1: That's why al Gore was talking about in the two 503 00:29:12,400 --> 00:29:14,760 Speaker 1: thousand election with the famous lock box thing, like put 504 00:29:14,840 --> 00:29:17,600 Speaker 1: social Security in a lockbox, like if it has a surplus, 505 00:29:17,720 --> 00:29:20,360 Speaker 1: you can't touch it. And then that way, so social 506 00:29:20,360 --> 00:29:22,680 Speaker 1: Security will be able to actually pay for the people 507 00:29:22,720 --> 00:29:25,640 Speaker 1: it's supposed to in thirty years rather than being robbed 508 00:29:26,000 --> 00:29:29,120 Speaker 1: to fund the federal government, which won't either raise taxes 509 00:29:29,280 --> 00:29:32,360 Speaker 1: or cut spending or both. Yeah, I think most people. 510 00:29:33,640 --> 00:29:35,240 Speaker 1: I don't know when it's gonna happen, but at some 511 00:29:35,320 --> 00:29:37,960 Speaker 1: point someone's not going to get their Social Security that 512 00:29:37,960 --> 00:29:40,200 Speaker 1: they paid into. Oh yeah, well, I think we're definitely 513 00:29:40,240 --> 00:29:43,000 Speaker 1: in that generation. Think. Yeah, I don't think it's going 514 00:29:43,040 --> 00:29:44,880 Speaker 1: to keep going on much longer, or if we do, 515 00:29:44,920 --> 00:29:47,440 Speaker 1: it'll be such a paltry amount that it'll just be laughable, 516 00:29:48,280 --> 00:29:50,520 Speaker 1: not like other people getting rich office security. Now, well, 517 00:29:50,560 --> 00:29:52,920 Speaker 1: I mean there's no and you certainly can't just live 518 00:29:53,000 --> 00:29:54,600 Speaker 1: on it. And I mean you can't, I'm sure in 519 00:29:54,680 --> 00:29:56,600 Speaker 1: certain parts of the country, but for most people it's 520 00:29:56,640 --> 00:29:59,040 Speaker 1: a supplement to something. But I think it would just 521 00:29:59,120 --> 00:30:04,360 Speaker 1: be like bucks or something for us who knows, I'm depressed, 522 00:30:06,560 --> 00:30:11,880 Speaker 1: don't don't be depressed. Why take action? Yeah, by you know, 523 00:30:12,000 --> 00:30:14,600 Speaker 1: taking care of your own personal finances in spite of 524 00:30:14,960 --> 00:30:18,080 Speaker 1: the government, I guess so. But I mean, yeah, yeah, 525 00:30:18,200 --> 00:30:20,520 Speaker 1: it's weird, And this one is. I think it's great 526 00:30:20,560 --> 00:30:25,320 Speaker 1: because everybody's involved, like all political factions are involved in this, 527 00:30:26,080 --> 00:30:29,160 Speaker 1: and everybody has an opinion, you know, like of how 528 00:30:29,280 --> 00:30:32,680 Speaker 1: to do this best. But I feel like, aside from 529 00:30:32,800 --> 00:30:35,840 Speaker 1: the people who are ready to push this into default, um, 530 00:30:35,960 --> 00:30:40,600 Speaker 1: everybody has an understanding like this is a very fragile 531 00:30:40,720 --> 00:30:44,040 Speaker 1: game of Jenga going on right now, and we could 532 00:30:44,160 --> 00:30:46,800 Speaker 1: conceivably go on like this, but it would be better 533 00:30:46,880 --> 00:30:50,920 Speaker 1: to fix it, but we need to do it surgically. Yeah, jinga, 534 00:30:51,000 --> 00:30:53,840 Speaker 1: that's a good analogy, because the wooden tower feels like 535 00:30:53,920 --> 00:30:56,600 Speaker 1: it's could topple at any moment. Yeah. Okay, so you 536 00:30:56,680 --> 00:30:59,440 Speaker 1: got anything else? Uh nope? All right, Well that was 537 00:30:59,520 --> 00:31:01,360 Speaker 1: the debts you. If you want to learn more about it, 538 00:31:01,440 --> 00:31:03,960 Speaker 1: you can type those words into the search part How 539 00:31:04,000 --> 00:31:07,440 Speaker 1: Stuff Works dot Com. Since I said search far, which 540 00:31:07,520 --> 00:31:12,640 Speaker 1: means it's time for listener mail. That's right. I'm gonna 541 00:31:12,680 --> 00:31:16,280 Speaker 1: call this shout out to my gmo or as he 542 00:31:16,360 --> 00:31:20,920 Speaker 1: calls her momo, his grandmother. Hey guys, I had I 543 00:31:21,000 --> 00:31:24,200 Speaker 1: had your How Dying Works podcast my playlist for quite 544 00:31:24,240 --> 00:31:26,560 Speaker 1: some time now, afraid to listen to your take on 545 00:31:26,720 --> 00:31:28,800 Speaker 1: what is happening in my life at the moment. I 546 00:31:28,920 --> 00:31:31,320 Speaker 1: lost my father to a rare form of cancer at 547 00:31:31,360 --> 00:31:33,040 Speaker 1: the beginning of the summer, and I'm currently caring for 548 00:31:33,120 --> 00:31:35,520 Speaker 1: my grandmother who was in the closing days of her life. 549 00:31:35,920 --> 00:31:38,440 Speaker 1: I'm an avid listener, and when the title appeared on 550 00:31:38,480 --> 00:31:40,920 Speaker 1: my podcast list, I began to avoid the topic. I 551 00:31:41,040 --> 00:31:43,720 Speaker 1: decided to finally listen to your take on the end 552 00:31:43,760 --> 00:31:45,560 Speaker 1: of life today, and I have to let you know 553 00:31:45,600 --> 00:31:47,680 Speaker 1: how much I appreciated your take on death and dying. 554 00:31:48,360 --> 00:31:50,320 Speaker 1: It's a topic that is never far from my mind 555 00:31:50,400 --> 00:31:52,960 Speaker 1: these days, and I found the information you provided both 556 00:31:53,000 --> 00:31:56,880 Speaker 1: informational and uplifting. Thanks for informing me that death is 557 00:31:56,920 --> 00:31:59,880 Speaker 1: a process, not an event. I got a lot of information, 558 00:32:00,240 --> 00:32:02,760 Speaker 1: as I always do from your show, but a surprising 559 00:32:02,760 --> 00:32:06,120 Speaker 1: amount of comfort and reassurance. I also know you guys 560 00:32:06,160 --> 00:32:07,960 Speaker 1: don't do shout outs a lot, but I took the 561 00:32:08,040 --> 00:32:10,760 Speaker 1: challenge at the end of the show seriously. I would 562 00:32:10,800 --> 00:32:12,160 Speaker 1: like to ask if you'd give a shout out to 563 00:32:12,240 --> 00:32:16,520 Speaker 1: my grandmother Mamo. It's a great grandmother name who was 564 00:32:16,560 --> 00:32:19,680 Speaker 1: the person who originally instilled the curiosity and love of 565 00:32:19,840 --> 00:32:22,600 Speaker 1: learning and me that led me to your podcast in 566 00:32:22,680 --> 00:32:24,840 Speaker 1: the first place. Please let her know how grateful I 567 00:32:24,880 --> 00:32:27,840 Speaker 1: am for all the things she's given me, and caring 568 00:32:27,880 --> 00:32:29,080 Speaker 1: for her at the end of her life is the 569 00:32:29,120 --> 00:32:33,240 Speaker 1: greatest gift I could ever ask for. That is from 570 00:32:33,480 --> 00:32:37,680 Speaker 1: Chris Howell. So, Mamo, I hope you're still with us 571 00:32:37,720 --> 00:32:41,800 Speaker 1: and listening. Thank you for raising an awesome grandson and 572 00:32:41,880 --> 00:32:45,960 Speaker 1: instilling that curiosity. And Chris, if Mama was no longer 573 00:32:46,040 --> 00:32:49,560 Speaker 1: with us, then uh godspeed. I hope uh, I hope 574 00:32:49,600 --> 00:32:55,400 Speaker 1: that end process was comforting nice somehow very nice. Yeah, 575 00:32:55,520 --> 00:32:59,440 Speaker 1: thanks Chris, Thanks Mamo. That's some. That was a great one. Yeah, 576 00:32:59,480 --> 00:33:01,800 Speaker 1: that was a good one. If you have something, some 577 00:33:02,240 --> 00:33:04,600 Speaker 1: nice email that will knock our socks off like that, 578 00:33:04,800 --> 00:33:07,920 Speaker 1: you can tweet to us at s y s K podcast. 579 00:33:08,320 --> 00:33:11,080 Speaker 1: You can join us on Facebook dot com, slash stuff 580 00:33:11,080 --> 00:33:13,200 Speaker 1: you Should Know. You can send us a regular old 581 00:33:13,240 --> 00:33:16,280 Speaker 1: email to Stuff Podcast at Discovery dot com, and you 582 00:33:16,360 --> 00:33:18,440 Speaker 1: can hang out with us at our website. It's called 583 00:33:18,520 --> 00:33:25,760 Speaker 1: Stuff you Should Know dot com. For more on this 584 00:33:25,960 --> 00:33:28,440 Speaker 1: and thousands of other topics, is it how stuff works 585 00:33:28,480 --> 00:33:37,720 Speaker 1: dot com With over a hundred thousand titles to choose 586 00:33:37,760 --> 00:33:40,600 Speaker 1: from Audible dot com, as a leading provider of downloadable 587 00:33:40,640 --> 00:33:43,680 Speaker 1: digital audio books and spoken word entertainment. Go to Audible 588 00:33:43,760 --> 00:33:47,760 Speaker 1: podcast dot com, slash no stuff, k N O W 589 00:33:48,160 --> 00:33:50,400 Speaker 1: S t U f F to get a free audio 590 00:33:50,480 --> 00:33:52,520 Speaker 1: book download of your choice when you sign up today.