Kind: captions
Language: en
I get hundreds, sometimes thousands of
comments on my videos, and today we're
going to be going deep into the comments
on the recent deep dive on taxes. Here
it is. Drew, welcome to the comment
section. Hey, let's do it. These are all
the comments directly on the latest deep
dive. Do the rich pay their fair share?
Doob Tube 71 asks, "This discussion only
considers income taxes. It does not
address the regressive oppressive taxes
in addition to income tax such as sales
taxes, property taxes, employment and
Medicaid tax which economically enslave
the poor and middle class more
disproportionately. Tom, your response.
>> So, he's not wrong. I didn't go into all
the other ways that people get taxed.
This is a big part of the reason why
people don't like a VAT tax, a value
added tax, is it ends up being a
consumption tax. Consumption tax hurts
the uh poor and middle class. They are
not wrong about that in any way, shape
or form. The problem is when people are
talking about um the rich aren't paying
their fair share. It's coming from a
place of populism. We have shifted over
into emotion. It's not actually based on
reality. So if people want to have a
conversation about, okay, the poor and
middle class are hurting. We want to do
things that will help them. I love that.
That is the very thing that I'm trying
to get across is I want people to focus
on what the real problem is. The real
problem is debt and money printing. If
people want to know why the poor and
middle class are suffering, it isn't
because they have to pay tax on the
things that they purchase. It's because
they are stuck in a loop that is pushing
them harder and harder into the have not
category. Uh I try to explain in the
video exactly how that happens. So I'll
leave people to watch that. Uh we
address that very specifically. I've
done literally like a dozen videos at
this point on exactly how that works.
But that's the real problem. And I just
want to remind everybody after World War
II, we had a 90% tax bracket and we took
in less money per taxpayer than we take
in now. So the laugher curve gets
laughed at because I think people just
think it's such a copout.
But this is where you're dealing with
the physics of money. When you try to
tax the wealthy, they stop producing,
they leave, or they find loopholes.
Okay? That just is what happens.
>> So then you say, we'll stop them from
finding loopholes. Okay, but at some
point you're just saying there's a flat
tax otherwise that they will use the
complexity against you. So if you do a
flat tax, then it's like, okay, cool. I
think most people would be fine with a
reasonable flat tax. I know I certainly
would be. The problem is that what
people actually vote for, and we talk
about this in the video, they vote to
punish the rich, not to help the poor.
And so we end up in this cycle where
what they do is this is a populist
moment. They're in their emotions.
They're actually trying to hurt the
rich, not help the poor. They keep
trying to raise taxes, raise taxes,
raise taxes. And when you raise taxes,
people leave. And the only way to stop
them leaving is what's called capital
controls. As soon as you do capital
controls, then the outside world says,
"Yeah, I'm not investing in your country
anymore." And you speed up the spiral.
And that's why understanding tax, the
economy, as this incredibly
like interrelated system where when you
perturb one thing, it has huge and
bizarre consequences in another place.
Mhm.
>> You start to get a sense of, "Oh, this
isn't going to be as easy as I thought,
and you're certainly not going to be
able to punish the rich. You might be
able to help the poor. You're going to
have a hard time punishing the rich
because it ends up breaking the system."
>> It sounds kind of almost like a Jenga
game where it's like you want to take
this one block out and you think, "Yeah,
I'll just punish the rich and I'll be
good." And then it dismantles something
and the balance is off and now other
things.
>> Yeah. If you think about it a slightly
different way and you say it's a Jenga
tower, but I really want to break
>> I want to break 1% of the pieces.
>> I'm not okay with them being in the
Jenga pile. I'm not even okay like
calmly removing them. I want to break 1%
of them. And it the bad news is that 1%
is the absolute foundation of the
economy. So you're saying I'm going to
break all the pieces at the very bottom
of this stack that holds everything else
up. And again, the top 50% pay 97% of
taxes. And it's really like as you go up
and up, you realize actually it's the
top 10% pay the vast majority.
>> So you have this foundational layer of
the people that create the jobs, that
pay the vast majority of the taxes and
there is a reality to be faced that
people emotionally want to see them
punished and when you do that you knock
over the whole Jenga Tower.
>> Aris, now what about Trump's tax cuts
for people that earn more than 500K a
year? What about all the subsidies to
the oil industry? What about all the
corruption and the big corporations
having the means and the lobbyists to
avoid paying their fair share? I kind of
think there's way more on the table
there. Okay, so we're back to they're
not paying their fair share. So, if you
go through the math in the video, it
just isn't true. So, the question
becomes, what do you consider their fair
share? So, the top 50% already pay 97%
of the taxes. The top 1%, I forget what
it is, is like 80% or more. Uh, so do
you want the top 20% to pay all the
taxes, the top 10%? Do you want the top
1%? Like there, where's the number?
Because they're not happy with the top
50%. And again, the top 10% are already
paying north of 85%. So it's like,
where's the number where we already
print money over whatever we tax? So
we're all we only bring in four trillion
in tax. We spend six. So it's like, uh,
I don't understand at what point they'll
be like, okay, that's the number. And
this is where you go, "Oh, this isn't
about them wanting something good for
the poor. This is about them wanting to
hurt the wealthy." Yeah. Once you flip
your switch in your brain to, "Oh, this
is about punishing the wealthy." Then
it's like, "Oh, all the behavior makes
all the sense in the world." When you're
like, you actually want to help the poor
middle class and they're not doing
anything that's going to help the poor
middle class. You're like, what's
happening right now? So the two trillion
that you spend over what you bring in in
taxes hurts the poor middle class. But
nobody's even talking about balancing
the budget. Nobody.
>> So, it's like, uh, this again, this is
all short-term thinking. This is all I
don't care about my kids. Um, this is
all politicians being really
um, grotesque, immoral, because Trump
just flat said,
"Remember guys, you got to pass this
big, beautiful bill
>> because I know you want to reduce
government spending and so do I, but we
have to get reelected." So, you will
mortgage. They added another $5 trillion
to the debt ceiling. you will mortgage
another$ five trillion dollars of your
children's future, push us over 130%
debt to GDP. Uh, historically speaking,
that's all but guaranteeing that we
default on our debt, people stop
investing in America, we turn violent
against each other. Like that you're
basically saying, I just want to kick
the can down the road. Um,
>> and people vote for it. People vote for
it. Politicians go for it. And I nobody
in office is immune to this from where
I'm sitting. If you voted for that,
we've got we've got a problem. Now,
look, as a pundit, I have the um the
easy job of being able to make a
statement like that, not being honest
about the fact that this is how politics
work and so I get to be Polyiana because
I'm not a politician. The reality is,
and this is the thing that I find
absolutely the most disturbing, is the
way that the human mind works, we want
to be seduced. And that's a really nice
way of saying we want our politicians to
lie to us. And so they do. And if we
were to say, "No, we want to be
disciplined. We want our politicians to
always tell the truth." Um,
if we did that and then got that into
office, maybe it would work, but I doubt
it. I I just don't think the human mind
is wired like that. And I think in a
world where um other governments will
use intimidation,
um subtuge, lies, and you don't, you'll
be at such a wild disadvantage.
>> So, it probably just is true that to be
a politician, you're going to have to
lie, dare I say, cheat, and steal. If I
could jump into Ari Snow's head right
now, it seems like
what she's asking for, what they're
asking for is let's take away the
loopholes. Let's get money out of
politics. Let's at least clean up the
political game, take the dirty money out
of it. But what I'm hearing you say is,
yes, that will help a lot of things, but
we still need to balance the budget. And
so this will be kind of moral victories,
things that will make us feel better.
But until we talk about actually
balancing the budget, until we talk
about actually austerity, actually doing
the beautiful deleveraging, it's more
moral victories versus something that
would actually help the poor middle
class.
>> Correct. If if you want to bring back
the poor middle class, you must bring
back manufacturing, a very substantive
portion. Doesn't have to be all of it,
but like you lost north of 2 million
jobs.
This is exactly what made it impossible
for the um average worker to negotiate
their wages because I just go then I'll
just go to Bangladesh, I'll go to uh
China, I'll go to um Paraguay, whatever,
and I'll find somebody that can do your
job. And that's the glory of going
global is for people that are uh
invested for companies.
>> Oh, heyday all day. It's like, "Yeah,
great. You've got no ability to
negotiate your wages. I can go anywhere
I want for the job." So, yeah, you're
screwed. And that's why when you get
protectionist, this is it's a populist
uprising. It's the people that have been
disenfranchised saying, "I'm not going
to stand for this anymore, so I'm going
to vote for a politician that's going to
slap somebody around that's going to be
protectionist." I mean, this stuff is so
predictable. That's the moment that
we're living in right now. And I mean,
if Trump can grow his way out of it,
that'll be phenomenal cuz that's that's
the card on the table that I never talk
about because I don't want to be even
bringing it up now. It's weird. My brain
starts glitching because I know if I
hand people this get out of jail free
card, they're going to play it to their
own detriment.
>> But if it is possible to grow your way
out of this, but Drew, it's so unlikely.
So, I don't want to pretend that it's
not there, but buddy,
>> a lot of things would need to line up in
order to make
>> a lot of things. So, uh, let's go back
to it. So, you would have to bring some
manufacturing back. Uh, you would have
to balance the budget. You would have to
start working the debt backwards to get
to the place where you're not going to
go all the way back to 3% in 10 years,
but you might be able to get there in 25
years, but every year you'd have to be
making meaningful progress. And
remember, part of that meaningful
progress could be growth.
>> But so deregulation is a big thing.
Shout out to all my deregulation haters.
>> The part that you don't want to
deregulate is the part where um you can
create monopolies. Uh where labor is um
>> exploitative.
>> Yeah. Like there there are we don't want
to go back to the guilded age. But once
you realize that the guilded age was had
massive inequality for a very different
reason than today has massive
inequality, then it's like you won't
make the intellectual error of being
like what' we do to get out of the
guilded age problem
>> because it was regulation. But it was
regulation because there was like
nothing like you had one guy like
controlled all of oil. Yeah.
>> And so it's like okay oil the railroads
like just it was like Russian oligarch
style back then. So cool. You did
sensible regulation and you got to the
point where the average worker started
having some power. All amazing. If you
try to use that playbook now when your
real problem is debt and money printing,
you'll be like, why isn't this working?
In fact, it's making the problem worse
because we already have a gazillion
regulations on us.
>> Now, you want to start stripping dumb
regulations. You don't want to strip the
ones that protect people. You want to
start stripping the dumb regulations
that are just unnecessary red tape that
slow everything down.
>> So get rid of that stuff. Unleash growth
like energy. You got to make energy,
man, for all the AI needs. You don't
want to overburden AI. The turnaround on
crypto is brilliant. So it's like, okay,
there's things you want to do there to
make sure that we're going in a good
direction. Um but you don't want to look
at the guilded age and think, oh, let's
just rerun the regulation playbook.
>> Yeah. Um, LMAO01.
One thing I learned today is that Tom
forgot the weight of spending $20 on
taxes when you only have a hundred
versus the weight of spending $20 when
you have 10,000. Out of a 100 solutions,
he picked black and white while ignoring
the rest, displaying them as they would
not help at all. If they wouldn't help,
there would not be policies like the big
ugly bill and so much lobbying to get it
to happen. Showing the questionnaire
study where they picked tax the rich and
displaying this in comparison of how bad
taxing the rich solves the problem is
only the starter how simplistic Tom's
conclusions are. While daily we worry
about how to buy bread, millionaires
worry about how to hoard money. To talk
about it, you have to oversimplify it.
The economy is extremely
complex. I think people hide behind
complexity to um hoard money to be
honest uh to keep people down. I mean,
this is how bankers get bailouts. You
just don't understand what they're
doing. It's really sinister. So, I don't
want to hide behind the complexity. I
want to say here's what I'm saying.
Here's the effect that I think it's
going to have 85%.
>> So, I get it. I am oversimplifying, but
there's a reason. So, you can actually
understand what I'm saying. So, then we
can have a conversation about do do I
get it? Do I get the cause and effect of
all this? So now going to the thing
about we're struggling to buy bread and
you don't understand the waiting of it
all and $20 for somebody who only makes
hundred is just it's such a different
game to somebody that has a ton of money
and they are so right. They are so right
about that. The thing that I just I I am
really trying to be heard debt and money
printing. That's why bread costs $20. I
know that's not literal, but it's like
the reason that the cost of everything
is going up is because of debt and money
printing. And when you take your eye off
that ball or you hide behind
complexities,
>> you you just lose the forest for the
trees. The problem is we have created a
situation where bankers are going to win
no matter what happens. Politicians are
going to win no matter what happens
because they can tax.
>> Sure, it's only the top 50%. But in
taxing the top 50% they are able to
break the middle class because the
purchasing power is just going down down
down down down
>> and the only way to escape that is to
get into assets. So what do the top 50%
do?
>> They get into assets.
>> So now you have this runaway thing where
the people that understand the game,
they're protected from the problem. So
yeah, you're like taking a bunch of
their income, but they're generating a
bunch of wealth. And then those two
things are different. And then over on
this side,
>> they just don't know what's happening.
And so they're getting pummeled. Not
because they're dumb. It's not that.
It's because they don't have time. They
don't have the interest. But however you
find yourself where you're not even
socking away
$10 a month into the stock market,
you're just falling farther and farther
behind. Or worse, if you vote for free
things, guess what they do to give you
that free thing? They print money.
>> The people over here are protected. So
it's like this keeps me awake because
I'm like, okay, this is a person.
They're well-meaning, good intentions,
they're very frustrated. They think I'm
trying to pull a fast one. And I'm
saying you you have to track the cause
and effect. Why is the the price of
bread going up? Why? It's going up
because of inflation. What causes
inflation? Inflation of the money
supply. Is there anything else, Drew,
that causes inflation? No. People are
going to tell you that other things
cause inflation. Inflation is every
price going up. There are going to be
times where selectively something goes
up like at Quest. Uh there was a drought
in California cause the price of almonds
to go up. Cool. It's not inflation.
That's the price of almonds going up due
to a drought. Okay. It's a totally
different ballgame.
>> Or like when the bird flu happened
earlier uh earlier last year, all the
prices of eggs went up because we had to
kill two million chickens or something
like that.
>> Correct. So it's like that's going to be
a temporary thing that will end up
correcting itself just as egg prices
came back down. because uh Trump did
something miraculous because you raise
more chickens and you build the
population back up. So, um if you're
confused about what's causing the
problem, the solutions that you offer
will make no sense.
>> All right, Mr. Jeff 2932. This is the
exact reason the working class eat the
rich. He is pontificating on the
technicalities of financial literacy and
how money and wealth looks in America.
But nothing about none of that stops a
hungry belly from growling. When the
working class bust into your air
conditioned house while you and your
family are discussing financial literacy
at your well-dressed dinner table, you
pause and say, "Well, technically the
people who work more hours at a job than
spending time with their families are
not making a livable wage. Fix it faster
than yesterday because these are the
people who eat the rich and there is
nothing the rich can do about it." Well,
maybe rocketing in this space.
>> Okay, Mr. Jeff's right. This is why I
talk about this so much.
He is right. Now the problem is uh if
Mr. Jeff looks at history, he will
realize, uh oh, every time we eat the
rich, it is bad for an extended period
of time. It is bad. They ate the rich in
Russia, tens of millions starve to
death. Uh they ate the rich in China,
>> 45 million people starve to death. Oh,
and by the way, then decades of
tyrannical rule. Uh they ate the rich in
Argentina for a hundred years. They
became a backwater. They went from uh
more attractive to the average immigrant
than America, that is a true fact,
>> more attractive to the average immigrant
than America to an absolute economic
backwater for 100 years.
And then how are they now pulling out of
that 100-year spiral? Mille came in and
said, "Well, technically," and then
explained how the economy actually
works. And said, "These are the things
we're gonna have to do."
>> And it's brutal, man. And when you hear
some of the quotes like uh people will
go to him and say, "Malay, the these
policies are so ridiculous. People are
going to starve to death." And he says,
"No, they'll find a way not to starve to
death." That's icy, but it's true.
>> Yeah. And it's like we can get into all
that like churches and religion and the
role they play and this should be
handled at the community level and not
at the government level and all that.
People are going to hate it. And that's
why I'm saying once people are in their
emotions, they just want to see the rich
punished. The problem is it's going to
make your life worse.
>> But people would rather that and stay
stuck where they are than go these
[ __ ] are going to get away with
it. I get it, man. But that I I am
literally
worried about the bang bang at the door
and wait. Well, technically it's not
going to get me anywhere. So, but here's
the problem. Uh, Mr. Jeff, I will have
long since left the country.
And that's where we're at. And that's
what people don't understand. The
wealthy will leave. I will get a private
jet and I'll leave. And that's I don't
want that, Drew. But I'm gonna do that
long before people are going to come
knocking at my door.
>> I'm selfish. If there is a thriving
middle class, first of all, I have some
things I'd like to sell you. Uh, and
then also, it stops me from having my
head separated from my body.
>> So, I think you enjoy those two things.
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let's get back to the show. Um, Scag
said something that actually bounces off
of this. I understand the money printing
problem. I get that you don't want to
get rid of entrepreneurs, but acting
like the richest people in this country
aren't the ones printing the money is
crazy. They also fund both sides of this
crazy political system we are in. They
have their thumb on the scale and always
have. I mean, if you expect them to just
be nice because we take less taxes,
guess we can try. But what happens when
they just continue funneling all that
wealth upward? When's our next solution?
>> Okay, this is a great comment. I really
like this. So, getting people to focus
on what's actually the problem. Your
actual problem is politicians,
bankers, and then all of us that vote
for this stuff. And as a reminder for
anybody that doesn't know my backstory,
I've spent a lot more time being broke
than I've spent being wealthy. So, I
understand that people are going to look
at me now and they're going to be like,
"Yeah, well, this guy is wealthy and
yeah, yeah."
>> Uh, but I have spent far more of my life
not having money than I've spent having
money. I get where people are coming
from, but what I like about this is it's
pointing out that there's a reality to
be faced, which is in 1913, the Federal
Reserve Act was passed. That that's the
real question that people should be
asking, not what happened in 1971 when
we broke our final thread of a tie to
gold. It's not like we were 100% tied
then. We were, I think, 10%.
>> Yeah.
>> Uh we broke that final strand.
>> This drama began playing out in 1913. So
in 1913, we create a central bank. Once
you create a central bank, now all money
is fiat. It's not doesn't it's not tied
to anything. If you want to bring it
into existence, you can. And that's why
they had to keep reducing the amount of
gold that it was tied to because they
wanted to print print.
>> And in the beginning though, when you
create a central bank, they're pretty
reasonable with the amount of debt that
they bring on. And so, in the beginning,
you feel like this isn't such a bad
thing. And it's only the people that
have watched this play out in history
that go, "No, no, no. This is exactly
how you steal from the people. Inflation
is theft." And I don't know if any of
the comments are going to be about that,
but like that's the thing that you
really want to attack because if you
don't understand why money printing
equals inflation, why inflation is the
worst thing you can do for the poor and
middle class very specifically, uh then
all of this is going to be confusing,
but that's the design. So modern
monetary theory, which is the fiat
system that we have now, which
>> comes about because you have the Federal
Reserve, the central bank. Once you have
that system, you're able to bring a lot
of money into the system through debt.
Okay? It's great. It actually has huge
advantages. And if we could keep that to
call it 3% of um GDP, you'd be great.
You you wouldn't have problems. But
nobody does that. And so now instead of
being 3% of GDP, we're 122% of GDP. So
at 130% historically, that's been a
breaking point. So, you hit 130% debt to
GDP ratio. If you stay there long
enough, you will go into uh violence.
So, you have a civil war, you have a
revolution. Uh, and I'm talking it's
usually pretty fast, like within 2
years. It's not like you have to stay
there forever. Japan is the only country
that's been able to avoid it. They've
been there for a very long time and they
haven't derailed. So, it's not like an
auto derail thing. Uh, but it's very
problematic. So, it's just
>> Yeah. Anyway, so that that is if we
could stay at 3% everything would be
great. You would use debt to grow, which
is exactly what you want to do. But the
problem is growing is very hard. So
people start at that 3% mark and then
they realize the growth is slowing down.
People start voting for the people that
promise that they can speed it up. Uh
people, politicians very specifically,
then go, well, I know how to speed this
up. I'm going to put easy money into the
system. Easy money uh is basically low
interest rate money. So they start
putting low interest rate money into the
system which is inflationary because
they do it through debt. This is where
like you start to like all of these
concepts become really important. The
bad news is that I know I'm arguing with
people who are in an emotional state.
They will be offended when I say that
but they're in an emotional state. And
if you can get them out of that and get
them to start mapping cause and effect
like what leads to what? Like okay you
want to tax the rich. What do you think
that leads to? Well, Tom, it leads to
more money in the system. No, it
doesn't. You can look at history and you
can see it doesn't play out like that.
>> Uh, so it's like if that's really your
goal, and this is a a thing that I do
with entrepreneurs. Well, I'll say,
"Okay, look, I'll I'll advise you what I
would do in your situation, but once
I've done that, you tell me what you
want to do, and I'm going to tell you
how to do that." Well, so it's like if
if somebody wants to play the game, I
want the uh wealthy to suffer. Okay, we
can play the game. Let's talk about what
we would want to do if we wanted the
wealthy to suffer. It's actually very
easy. Tax wealth. If you want the
wealthy to suffer, tax their wealth
because they're going to have to
liquidate their assets. It will
absolutely destroy them. Uh the assets
will start going down in value across
the board because everybody's trying to
sell them to be able to make the tax
burden. This is why it can be so
devastating for like a farmer when their
parents die. If there's a huge estate
tax, which you see in Europe a lot,
where they're like, "Uh, my dad just
died. He left the farm to me, but now I
owe 40% tax on that farm. the farm
doesn't make those kind of margins. My
dad was land rich, cash poor. So, the
only way for me to pay the tax on this
wealth is to sell the property. So, you
can imagine if everyone had to sell
their wealth all at the same time,
people are like, "Well, I'm just going
to buy all this stuff for a steal." Who
are the people that are going to buy it?
They're going to be the people with that
are flushed with cash. So, that's going
to be banks. It's going to be
governments. It's going to be the ultra
wealthy. And so you would there would be
a tiny tiny tiny people at the top that
would find a way to sort of balance it
out. But to be honest, you would just
start eroding the system because even
those people would be like, "Well,
everything that I buy, if it goes up in
value, I'm going to have to sell it to
make the tax." So you that's how you get
into like despotic kings and queens. Uh
because they're the only ones that will
ultimately they'll be able to hoard
enough money. They leverage a monopoly
on violence to be able to do it. So the
government would essentially start
owning everything because they already
have the monopoly on violence. So it's
like, but that's how you would hurt the
wealthy. So if I just want to be
punitive, cool. We there's a playbook
for that. We know how to do it. The
problem is what ends up happening to
everybody else? They're punished even
more or they're punished just as much.
>> So you end up breaking the system, it
ends up being a communistic regime.
>> If Elon has to sell all his stocks and
backs your 401k, so now you kind of get
hurt even though you're on the other
side and stuff like that. Like
>> correct. So yeah, the very value of the
thing goes down because everybody's
having to sell a whole bunch of it to
make their payments. You stop being able
to aggregate wealth. That's beyond the
scope of this answer, but it's like
there are going to be all these knock on
effects. But the reason I bring that up
is so people understand you can play any
game well, but there are going to be
first of all, there's physics to how you
make it happen. So it's not going to be
based on emotion. It's going to be based
on cause and effect. And then in
addition to that, there's going to be
second and third order consequences. And
if you're not thinking through what
those second and third order
consequences are, the emotion can make
it feel right. And this is why
entrepreneurship can be so valuable for
people because when you have to make
payroll, all of a sudden you get very
cleareyed about what works and what
doesn't work. And the economy is like
entrepreneurship. There are going to be
things that bring prosperity and there
are going to be things that destroy
prosperity. And they're knowable. We can
look back in history. It's a very
complicated system. So, I'm not saying
it's just, oh, just do these three
things and everything's going to work
wonderfully. It's far more complex than
that. But they're knowable. Like,
there's a cycle that repeats that Ray
Dio talks about endlessly. Once you
understand the cycle once you understand
it's tied to debt,
>> uh, you can begin to be far more
predictive. And this is why Ry has built
the largest hedge fund in the world. He
just understands that cycle better than
anybody else. If you understand that
cycle, you can look at any country and
say, "Where are they in the cycle? I
know where this leads." Because again,
just cause and effect. Um, so yeah, you
can punish the rich, you can help the
poor, but often times you can't do the
same thing at the same time. So, uh, if
you want to punish the rich, you're
inevitably going to punish the poor
because that's who generates the money
that pays for everything. Uh, if you
want to help the poor, then you're
probably not going to be able to punish
the rich. So, it's
it just is the way that it works. When
people are in their emotional state and
they want that angle, a lot of times
it's if I punish the rich, it's going to
add more money into the system or maybe
we'll spend more on programs or maybe
they'll we can now afford healthcare and
these other things like that.
>> So I understand that there's a physics
of everything. Can we redistribute the
wealth in a in a better way?
>> So Radalio has a concept called a
beautiful deleveraging. This is how you
go from 122%
um debt to GDP ratio and you start
bringing that back towards the 3%. Is
you're going to do some wealth
redistribution.
The wealthy are going to hate it, but
you're going to have to do it. Uh so for
all the people that are like Tom's just
trying to build the system that's good
for him, I'm banging a drum saying I'm
perfectly happy to see some wealth
redistributed.
>> I'm perfectly happy to see uh increase
in tax, but again, you have to be
careful otherwise people just flee. So,
it's like you have to do these things uh
in a very delicate way. You're going to
have to um do some money printing.
You're going to have to do debt
forgiveness. And you're also going to
have to look at deregulation because if
you don't start growing, you're going to
be in real trouble. So, you're playing
with these stimulatory things, lowering
interest rates, printing money. Um you
are dealing with things that are
confiscatory. So, you're redistributing
some wealth. you are raising taxes on
the wealthy. Cool. You're going to do
all of that. And if I saw that debt to
GDP ratio going down, I'd be ecstatic.
Now, how can people trust that I would
ever want something that takes something
away from me? Because when you cross
130% debt to GDP ratio, there's
violence. And so, who do they go after?
They go after moderate elites first. So,
as a moderate elite, it's like, hey, uh,
I'm the first to get beheaded. So, um, I
really would rather not see us go there.
Now look, money can move. So if I saw us
headed in that direction, I'm gonna
leave. So it just doesn't make any sense
to put myself in danger. And we've seen
this play out so many times over the
last 500 years that it's like it really
is predictable. So there are certain
things that you can see happening. You
go, "Yep, got to go."
>> So um I yeah, I would just tell people
to be careful with that one. Going back
to the initial premise of the question,
I think this is really brilliant. So
there's a book called The Creature from
Jackal Island, which I also did a deep
dive about. You can watch it right here.
Uh that book details how bailout is the
point. So the whole point of modern
monetary theory is to put banks in a
position where they can be super
reckless and they'll get bailed out. Now
what does it mean to be bailed out? It
means that they do this thing that
brings in these insane amount of profits
but it's super risky which is why it's
bringing in all the profits and
eventually it breaks. This is what
happened in 2008.
>> Housing market.
>> Yep. So, uh, they inflated the housing
market massively by doing all of these
subprime mortgages and just taking these
crazy risks that they never should have
done. But the reason that they were
willing to do that is they knew that
they were too big to fail. They knew
that the taxpayer would ultimately pick
up the bill because when a bank gets
bailed out, what they're saying is
they're going to create money out of
thin air. They're going to money print.
When you money print, you create
inflation. When you create inflation,
you steal purchasing power from
everybody equally. But obviously it's
going to be far more devastating for
somebody that you know has like a $100
in their bank account than it's going to
be to somebody that has 100 million or
100 billion in their bank account.
>> So that's where it's like you have to
understand that is their game. They want
to create a system where heads they win,
tails you lose. They literally can't
lose. And this is why people were so
outraged in 2008 during the bailout was
because these guys were paying
themselves billions of dollars in
bonuses for having fleeced the American
public.
>> It it's wild and they can do it in
public because people don't understand
the cause and effect of economics. And
so we find ourselves here. And the great
news is, okay, this person has their
finger on the the right thing, which is
I know I'm being screwed by these
bankers, but they then go a little too
broad. Now, fair enough, people. Here's
the part that nobody is going to like.
It is very rare that somebody can keep
wealth unless they're smart. I'm not
saying that it you can't have a Nepo
baby whose parents are like, "Listen,
just work with this financial manager.
shut up and let them do it. But
ultimately, the financial manager is
smart. You don't hold on to your money
if you're dumb. Full stop. So, you've
got people that they see how the system
is set up and they're going to take
advantage of it. Like, I will tell you
right now, I see what the system is and
I'm going to take advantage of the
system.
>> But, Drew, I am banging the drum about
what we need to do to bring back a
thriving middle class. No one is going
to be able to say that I lied. I might
be wrong about things. No doubt. The
economy is complex. I like to say I
understand the economy extremely well.
Scott Besson would laugh at me. So um
you know there's as the island of my
knowledge grows so grows the shore of my
ignorance. I get the more I learn about
this the more I realize like who wa this
game is very complex.
>> So
>> I don't want anybody to overesteem my
abilities here but I see the system and
I'm playing it and I've made so I built
a company sold it that that generated my
wealth. But I've since then added
millions of dollars to my net worth by
investing that money, by coming to
understand how the economy works,
investing wisely, and then reaping the
benefits. And I'm screaming as loud as I
can. I the thing that I bet on is
inflation. And I just go, where do I
need to be knowing that inflation is
going to happen? I put money there and
it works all day, every day.
>> And so anybody can do it. You can buy a
fraction of a share. So we the modern
stock market is really a miracle because
it's so accessible financially.
Intellectually it's a totally different
game. And I get it. People are trying to
raise their kids. I built a company and
sold it for a billion dollars and didn't
know how to invest money.
>> So I'd put all my time and energy into
making money. I didn't know how to
invest it. So I have nothing but empathy
for people that are like, "Bro, I am
working two jobs. I'm trying to put my
kids through school. Like I'm just
trying to get by." And for the love of
God, I want to hang out with the people
that I love every now and then. I don't
want to spend all my time on this. I get
it. But ultimately, the system is
rigged. It's rigged against you. But you
can play it. And once you understand how
it's rigged, then you can start making
moves. Be careful. Don't get out over
your skis. Don't assume you know
something that you don't. As much as I
think that I understand things now, I am
very cautious in my investments.
>> Next one, the mandate mechanism. Tom,
sincerely love your stuff. You're too
smart to not see how the elitees ability
to borrow against unrealized gains is
the largest major factor contributing to
this problem. By allowing it, you've
incentivized money printing at the
highest level. I'm a huge fan, but
you're ignoring this constantly in your
analysis is making your ar arguments
insincere.
>> Okay, so I love that he brought this up
and I love that his name is the Mandre
mechanism, which is bailouts. Uh, so
this is a great point and this is
probably something that I should talk
more about and so shout out to the
comment section. Um, this kind of stuff
is actually really useful to me. Uh,
okay. So the what he's talking about is
when you have cheap money in the system
and you have assets, you can borrow
against those assets. The way that
modern monetary system is set up is the
bank can make that money out of thin
air. Now, I'm not ignoring this because
I rail against inflation
>> all the time. I'm saying stop printing
money. That that that's my whole thing.
Stop printing money. So, uh debt comes
in three flavors. So, you've got
government debt, you've got private
debt, you've got corporate debt. So,
this is where he's getting private debt.
>> Um so, letting people just go ham ham
ham on private debt is inflationary. And
so 100% this person is not incorrect. So
to make that go away though, you have to
say we once you try to do capital
controls from the top down and you say
we're not going to let people borrow
more than whatever. Uh I think you're
making a mistake. The reason that you're
making a mistake is the trade-off that
you make by having the system that we
have now is that you're saying okay we
want to generate a lot of growth. We
want to make money um easy. So that
there are a lot of businesses, so that
people will start things, build things,
create things, focus on innovation.
Okay, this is hugely advantageous to
that. And the strongest argument that
people almost never make against my
whole railing against modern monetary
theory is that if you go back to a hard
money system, the growth is going to
slow down. It's just really hard to get
additional money. So there, all of this
is a trade-off. Modern monetary theory,
if people could keep it reigned in,
would be amazing. But alas, we don't.
And because people know that they can
get bailed out, they will loan money
even to people that are not worthy of
credit. So, this wouldn't be bad if
people were making a loan and they
actually expected to get not just the
interest paid back, but the principal as
well. And so, if banks were making
sensible loans where it's like, okay,
this is, you know, in 30 years I'm going
to have the interest and all of the
principal back. But the reality is what
they do is they just let people roll it
over, roll it over, roll it over, roll
it over, roll it over because they can
loan out up to Drew, do you know the
answer? Do you know? Okay, if I go to a
bank and I give them $100, do you know
how much they can loan out of that $100?
>> Isn't it all 100?
>> All $100.
>> That's crazy.
>> So, there used to be a limit, and I
think this might be what they're calling
for, and I would be totally here for it.
>> Uh, make them have reserves. Make them
have Drew 80% reserves, 70%, but it's
not zero. Yeah.
>> I think this is awesome. If you go to
banks and you say if somebody gives you
$100, you've got to keep $80
on hand. Word.
>> Yeah.
>> Now, you've still got money that'll come
into this system, that 20%, but you
don't have the absurdity of the 100%.
>> Wouldn't that lock down the money in the
like flow of the system, though, where
there will be less mortgages, less
loans, less smaller credit card lines,
things like that? Yeah. So, this is one
where um
>> I would need to look at it more to know
what the right number is, but I'll tell
you right now, the right number is not
zero. That's wild. Like, you're just
saying, uh, please do a run on the bank.
I if if a bunch of people roll up to any
major bank right now
>> and they say, "Give me my money." It
that bank will collapse. The bank is
insolvent. And uh most of them will hold
around it's like 9.3% or something. But
legally they actively changed it cuz it
used to be 10%.
>> And they actively changed it to zero. So
uh it it is we are in this wild money
printing era where politicians and
bankers are either dumb or corrupt. The
bankers are corrupt. The politicians
could be dumb or corrupt. Uh but it it
is really really insane. But again there
are three flavors of debt. He's only
addressing one of them. But I'm glad
that he brings it up. It is something I
should talk more about.
>> All right, that's all I got.
>> All right, everybody. Thank you for
being a part of the comment section. We
are in there all the time reading these
things. It means the world to us that
you engage with this content. I really
believe that we can together make the
world a better place, but we really do
have to map cause and effect. Until next
time, my friends, be legendary. Take
care. Peace. If you like this
conversation, check out this episode to
learn more. The hashtag eat the rich
racked up over 185 million views on Tik
Tok alone. As wealth inequality hits
absolutely absurd levels, there have
been increased calls to tax billionaires
out of exist.