October 2, 2023 • 24 mins
In this episode, Lisa Boothe hosts a discussion with EJ Antoni about the current state of the economy under Joe Biden's presidency. They criticize Bidenomics, highlighting the negative impacts of excessive government spending, borrowing, and money creation. They discuss rising prices, unaffordable housing, and decreased purchasing power for American families. They also address the role of the Federal Reserve in fueling inflation. The conversation then shifts to the impact of Biden's energy policies on the economy, with EJ criticizing the administration for increasing costs through green energy measures. The Truth with Lisa Boothe is part of the iHeartRadio Podcast Network - new episode debut every Monday & Thursday.
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Speaker 1 (00:00):
We want to share a good friend's podcast with you
this week, Enjoy the Truth with Lisa Booth in the
Clay and Buck podcast Network.
Speaker 2 (00:07):
When Ronald Reagan was running against Jimmy Carter in nineteen eighty,
he asked that famous question, you better off than you
were four years ago? I think for most Americans, the
Americans listening to the podcast, that answer is no. We're
going to talk to EJ and Tony. He recently testified
before a House subcommittee on the impacts of Bidenomics. He's
(00:28):
a public finance economist the Heritage Foundation and a senior
fellow at Committee twin Leash Prosperity. We're going to have
him break down Bidenomics for us. You know, how has
Joe Biden's time in office impacted you, impacted the economy,
and impacted the country. Stay tuned for that conversation with
EJ and Tony.
Speaker 3 (00:52):
Well.
Speaker 2 (00:53):
EJ, thanks so much for coming back on the show.
I guess it wasn't too bad the first time, so
I appreciate you taking the time.
Speaker 3 (00:59):
No, my pleasure, Lisa, thank you for having me.
Speaker 2 (01:01):
So we've got this fight on Capitol Hill right now
over funding what this you know, continuing resolution could potentially
look like. You know, how do you think this is
all going to go down? And what do you think
the resolution will look like?
Speaker 3 (01:15):
Well, it definitely looks like we're going to have a
shutdown at least for a little bit. I just don't
see how Congress is going to be able to reconcile
all of their many differences at this point with only
a couple of days left before before the deadline. In
terms of what this eventually looks like, I think the
only compromise that they're going to be able to really
hammer out will be a slight reduction in spending, which
(01:37):
is a disappointment because we need serious reductions in spending
to get us on any kind of sustainable fiscal trajectory.
But what the end product is probably going to end
up looking like a cross between the most recent fiscal
year and the previous ones. So again that that just
looks like a small reduction in spending.
Speaker 2 (01:54):
Do you think that this will result in a shutdown
for at least in a short period of time.
Speaker 3 (01:59):
Definitely, Again, at least, I just don't see how on
earth they're going to be able to reconcile all of
their differences. There are too many non negotiables on both
sides that are eventually going to have to become negotiables.
But you know, forty eight seventy two hours, I just
don't think that's enough time to get that done.
Speaker 2 (02:16):
You know, you go back to the Reagan Carter debate
in nineteen eighty and he asked that question, are you
better off than you were four years ago? Take us
through what's happened to the economy since Joe Biden has
taken office. Obviously we're not at that four year mark,
but take us through what we've seen so far.
Speaker 3 (02:32):
No, but Lisa, in a lot of ways, Joe Biden
has done as much.
Speaker 2 (02:36):
Feels like it, we're not feels like it's.
Speaker 3 (02:40):
Exactly well, Lisa, to that point, Joe Biden has basically
done as much damage in two and a half years
as Carter did in four If you look at what
he's done to energy markets, what he's done to prices generally,
look at how unaffordable housing is. I was having a
conversation with someone not that long ago, and she was
telling me, I don't understand what young people are complaining
(03:02):
about today with houses, because my first mortgage was twenty
one percent interest. I get that, But guess what, home
prices relative to your income were significantly smaller back then,
And so, believe it or not, housing today is less
affordable than it was when interest rates were three times
as high because the price of the home is also
(03:25):
a big factor in how big your monthly payment is.
And when the price of the home is so high
relative to your income, I mean, housing is just unaffordable.
Half half of Americans today, Lisa cannot qualify for a mortgage.
I didn't say afford a mortgage, I said qualify for it.
Even among those who qualify for a mortgage, you still
have a significant portion who can't afford it. So sorry,
(03:49):
I'm kind of getting ahead of myself here. What has
Joe Biden done to the economy? Nothing good? Unfortunately, what
we've seen are prices steadily rise faster than wages. The
typical American family right now has lost about fifty one
hundred dollars in terms of annual purchasing power. So it's
like if you could roll the clock back to January
(04:09):
twenty twenty one, knock fifty one hundred dollars off that
family salary. That's what they're feeling today. But because prices
have gone up so much the Federal Reserve has belatedly
decided to raise interest rates. That's playing into things like
the exploding cost of housing, but it's also affecting all
(04:29):
kinds of borrowing, Lisa, everything from credit cards to student loans,
to auto loans and everything in between. And as a
result of that, that same typical American family is facing
about another eighteen hundred dollars a year in higher financing
costs because all of those different interest charges have gone
up on all the things that I just mentioned. So
you put all this together, and the typical American family
(04:52):
feels like they're seven thousand dollars poorer today compared to
when Biden took office. I mean, for a lot of families,
that's a whole month's pay.
Speaker 2 (05:01):
Well, I mean that's a significant amount of money. You
recently testified before Congress about Bidenomics. If you had to
sum up Bidenomics, how would you explain it?
Speaker 3 (05:11):
Bidomics is the government spending, borrowing, and creating too much money,
full stop.
Speaker 1 (05:17):
Okay, And that's not good. No, it's not.
Speaker 3 (05:21):
And there's an it's amazing all of the different negative
consequences Lisa that stem from that. If we can just
go back to March for a second, when we had
the banking crisis, which by the way, is still not
over All that has happened from that is that the
Fed papered over the crisis with a bunch of emergency loans.
But those loans are only last for a year, and
(05:41):
when they expire, all those regional banks are going to
be in exactly the same terrible shape according to their
balance sheets that they were then. So all we did
there was kick the can down the road. But how
did we get there in the first place. We got
there because the Federal Reserve created systemic interest rate risk,
which is a fancy way of saying they kept interest
rates way too low for way too long. They promised
(06:04):
inflation was transitory and rates wouldn't go back up, and
they did all of this to finance the massive deficits
that Congress was authorizing by spending money that they didn't have.
And the consequence of that is we've jeopardized our entire
financial system. The dollar has lost value. We have shaking
confidence in the dollar, not just at home but abroad.
(06:25):
Look at all the countries around the world that that
are de dollarizing. In other words, they're no longer going
to use the dollar for settling international transactions, for international trade. Well,
what's going to happen to all of those dollars that
aren't being used that way anymore? They're going to all
come pouring home. I mean, this is just going to
fuel inflation even further.
Speaker 1 (06:43):
But you did papering over.
Speaker 2 (06:45):
Isn't all we do though, you know, I mean, even
dealing with this continuing Resolution, it's papering over. It's not
doing the you know, the proper appropriations process on Capitol Hill.
We papered over government shutdown or you know, during COVID
right lockdowns, shutting businesses down, destroying businesses with this injection
of cash into the economy, which is called inflation, you know,
(07:06):
which is caused inflation.
Speaker 1 (07:07):
So it's like, isn't that.
Speaker 3 (07:08):
All we do?
Speaker 2 (07:09):
Really is that there's no desire, there's no solving problems.
All we do is paper over them, which then creates
new problems.
Speaker 3 (07:16):
Exactly. Could not agree with you more, Lisa, And this
is why, you know, every time the Federal Reserve tries
to draw down its balance sheet, every time it tries
to raise rates, every time it tries to reverse course
and go from loose monetary conditions to tighter monetary conditions.
It quickly realizes that you can't unwind a Ponzi scheme,
and that is essentially what we've done with government finance.
(07:39):
We've turned it into one giant Ponzi scheme, and there
is no way out of that except pain. It can
be long term pain, you can stretch it out over
a very long period of time, like what we've done
with inflation. You can have the pain all at once
when you have these these shocks. That basically is what
happened in the beginning of the rate in years. We
(08:00):
had a big economic shock then. But the nice thing
about that is it gets all the pain out of
the way and it sets you up for longer term prosperity. Unfortunately,
this administration, everyone from the White House to Congress, to
the Treasury to the Federal Reserve, everyone in DC, seems
to rather go the route of just kicking the can
down the road.
Speaker 2 (08:21):
But is that because no one wants to be responsible
for the pain? Right, So, even if Joe Biden or
the next Republican president know that that's what it would
take to turn things around, to put the country back
on a longer sustainable path, in the future. Nobody wants
to be responsible for that pain politically.
Speaker 3 (08:40):
Certainly, that is definitely a big consideration, and that's one
of the reasons why there's a good chance that the
Federal Reserve is basically going to balk next year as
we go into an election. We like to talk about
the Federal Reserve as being politically independent, but let's face it,
they're not. I mean, Jerome Powell wanted to get renominated,
so he kept interest rate slow so Joe Biden would
(09:02):
renominate him, and he got what he wanted and the
rest of us got inflation. And so you're absolutely right.
People don't want to go through the political pain, and
so our political leaders aren't willing to make the tough decisions.
But I mean, frankly, I think, Lisa, there's a lot
of Americans who aren't willing to go through that pain either.
(09:22):
It is a lot easier to get another hit than
to go through detox, and it seems like that is
the preference of most people today.
Speaker 2 (09:29):
Unfortunately, you know, we've got sixty percent of Americans living
paycheck to paycheck. How does that stack up with previous generations?
Speaker 3 (09:38):
Oh goodness, I mean, it's not as bad as say,
the Great Depression, But it's certainly just as bad as
the worst parts of the Carter Years, as the worst
parts of a couple of recessions in the fifties and sixties.
So we have been here before, and we have been worse.
It's not the end of the world, but I mean,
it's clearly not good. And if you ever I wondered
(10:00):
what would happen if, for example, the government just decided
to raise taxes by trillions of dollars one year, Well,
that's basically what we've seen. Not basically, it's literally what
we've seen through inflation. The government has just taxed the
American people into oblivion, and by taking away all of
that what used to be disposable income, the American people
are left with the scraps and are having to try
(10:23):
to make ends meet with that. That's a big reason
why people are taking two three jobs today. Looking at
something like net household wealth, I think is a really
good indicator here, Lisa, because net household wealth is technically
at a record high today, but that's before you adjust
for inflation. As soon as you do that, you find
that it is basically right where it was in the
(10:44):
last quarter of twenty twenty, in other words, when Trump
left office. So virtually all of the increases that we
have seen under Joe Biden are literally just paper money.
It's not real, it's just inflation. All of that additional
household wealth has been confiscated by the government through that
hidden tax and fairness.
Speaker 1 (11:04):
It's not just Biden, you know.
Speaker 2 (11:06):
The last year of you know, Trump's administration too, we
saw a lot of government spending with COVID. How is
Joe Biden's energy policies, I mean, even looking at the
UAW strike obviously, this push for you know, putting a
gun to autobaker's heads, as well as you know, consumers
and into us this push for electric vehicles. You know,
(11:26):
talk about how Joe Biden's green energy policies have shaped
the economy and how they will continue to shape the economy.
Speaker 3 (11:34):
I would distinguish, you know, when we talk about things
like regulatory policy, energy policy, these are all things that
can increase costs. But maybe this is just the academic
in me, but I do want to distinguish that from
from the phenomenon of inflation, which is just prices everywhere
going up because you're actually devaluing the dollar whereas when
we talk about Biden's energy policy, we're talking about individual
(11:57):
things becoming more expensive. The reason I think there's a
lot of overlap there and why people get confused, is
because the price of energy affects everything we do and
everything we buy. So of course, when you make oil,
when you make natural gas, when you make propaane, whatever
the case may be more expensive, you are going to
affect the price of everything else. And what we've seen
under Biden is a repeated throttling of American energy. And
(12:22):
what's really astounding is that these people clearly are not
that concerned about the environment, because they're perfectly fine with
us importing oil and gas from abroad, but not with
us getting it here at home or heaven forbid, we
get enough that we can export, like we did under Trump.
And so as a result of things like removing different
(12:42):
pieces of land that have a lot of deposits, removing
that from exploration, getting rid of a lot of drilling
permits and leases, whether that's up in anwar or other
federal lands, new taxes on oil, on gas, on coal,
all of these things are increasing costs, and again, increase
the cost of energy, you increase the cost of everything else.
(13:03):
And that's precisely what we've seen throughout this administration, in
stark contrast to the last administration, where they essentially did
everything they could to cut red tape to streamline energy
production and distribution, things like pipelines, for example, that had
a tremendous impact on bringing down costs. There's a friend
(13:24):
of mine, he's a professor at a University of Chicago
and economists, and he has estimated that there are literally
tens of thousands of dollars in regulatory costs per family
that have been incurred under the Biden administration versus the
Trump administration. So those costs actually are adding up to
be even more of a burden than inflation.
Speaker 2 (13:46):
It's take a quick commercial break more with EJ and
Tony on the other side.
Speaker 1 (13:53):
So why are they doing it?
Speaker 2 (13:54):
Because to your point, it's not better for the environment,
I mean that whole You know that's a scam when
they say that.
Speaker 1 (14:00):
So why are they doing it?
Speaker 3 (14:02):
At least I suppose the pithy answers. You'd have to
ask them. But if I can put my cinic hat
on for a moment, I.
Speaker 2 (14:07):
Don't think they'll talk to me. Jay, I don't think
that Joe Biden will come on here.
Speaker 1 (14:13):
Probably not would be interested. He's too you go to bed,
it's too.
Speaker 3 (14:17):
Busy hiding in his basement. He won't come on and
talk to you. Well, since it's just you and me here,
let me put on my cinic hat for a moment
and say that this is entirely because of special interests.
I mean, go back to Silindra. That was the prime
example and probably the most famous one where or infamous,
i should say, where you had special interest getting billions
(14:39):
of taxpayer dollars, and those special interests then turned around
and gave a chunk of that back to politicians, mostly Democrats,
but some Republicans too. And sure enough, what did we
see with the so called infrastructure bill that was passed
by Joe Biden that received Republican votes too, unlike the
Inflation Reduction Act, and that contained one hundred of billions
(15:01):
of dollars that are essentially going to go to these
special interests of so called green companies that I mean,
there's nothing green there except the money, the money trail,
and so these companies who are I mean, look at
look at what they've done with uh, with the automakers.
This I think is a great example. We gave Ford
all of these loans that are guaranteed by taxpayers. So
(15:24):
if these different ev projects work out and the automakers
make money, then they can repay the loans, and then
whatever profit they get after that is theirs to keep.
But if things go south, if these projects don't work out,
if they can't sell these cars, or if the research
and development turns out to all be a flop and
they can't even make the cars, guess what, they don't
have to repay the loans. The taxpayers on the hook.
(15:47):
So what are what are the automakers investors going to do?
What are the people work for the automakers, the Union's
going to do. They're going to donate a lot of
money back to the Democrats who funneled all of them
money to the special interests in the first place. It
is just this dirty merry go round of taxpayer dollars.
Speaker 2 (16:06):
You know, I saw that you wrote in a column recently.
You had written talking about interest rates for the government.
In less than a decade, interest payments will crowd out
more than half of existing government spending. What does that
mean for the country and what does that mean for Americans.
Speaker 3 (16:21):
Not to sound hyperbolic here, but this is the doomsday scenario.
And I know a lot of people are probably rolling
their eyes to that and be like, oh, here we go.
Let me say, Conservatives, I think have had egg on
their face for several decades now by being hyperbolic when
talking about the deficit, talking about the debt, and saying, oh,
this is going to end the country in a certain
(16:42):
number of years, whatever the case may be. Here's the thing.
They had the trajectory right, but they had the magnitude wrong.
They're absolutely right that we're heading in the wrong direction.
But no one actually knows where the point of no
return is. It has proven different for different countries at
different periods in time, in different locations around the world.
So I'm not going to say, Okay, five more years
or eight more years, or ten more years of this
(17:03):
and it's the point of no return. I don't know
where that is. What I do know is this is
very very quickly approaching a catastrophic level where the government
is literally going to be primarily paying for its own debt,
not providing goods and services to the American people. We're
not talking about building roads, We're not talking about writing
checks for Social Security and Medicare. We're not talking about
(17:26):
financing the military. We are talking about literally just paying bondholders.
And there is no way out of that, because once
you get that far down the rabbit hole, you are
spending so much on debt financing that you don't have
enough leftover to pay for central services, let alone pay
down the debt, and so you are stuck constantly taking
(17:48):
out more debt, and therefore the interest you pay on
that debt is going to go higher and higher and higher,
until eventually it becomes the entire budget. Now, obviously that's
not going to happen. The government would just default at
that point, like countless governments around the world have before.
But that's the direction we're heading. It's not good. I mean,
just looking at interest the latest interest rates today Lisa,
(18:11):
on different government bonds. Next year, the next fiscal year,
which begins in just a couple of days here October first,
we're going to see interest on the debt hit about
one point five trillion dollars. So the optimistic scenario of
nine hundred billion or even a trillion dollars, forget that,
we are going to go way beyond that very very quickly.
Speaker 2 (18:34):
Well, I appreciate your caution and not being Greta Thumberg
who recently had to deleat a tweet because she said
that the world would end by twenty twenty three, and
then of course we're here. So so he's smart.
Speaker 1 (18:46):
To be cautious, you know.
Speaker 2 (18:48):
I mean, given you know what we've seen, and given
the state of the economy and the country right now,
I mean, how do you put the genie back in
the bottle? You know, how do you rectify the wrongs
of decades?
Speaker 3 (19:02):
Now?
Speaker 1 (19:02):
What do you do moving forward? How do you solve this?
Is it solvable?
Speaker 3 (19:07):
That's a very very good question. I would say it
is solvable. You know, we've gotten ourselves into very tight
spots before. I mean, let's face it, we had a
civil war where the country was quite literally torn apart,
and that to this day remains the most catastrophic event
in American history, at least in terms of lives lost,
(19:27):
depending on how you want to adjust for inflation, perhaps
financially as well. And so we have definitely been through worse.
We can get through this. The question is do we
have the political will to actually make that happen? And
that's where I'm not so sure, because we are at
a point where so many Americans have become dependent upon
(19:48):
the government, so many Americans are not even paying federal
income taxes but getting money from other people's federal income
taxes that you have to wonder are there enough Americans
left who have had enough, who are willing to stand
up and to say no. Because until that happens, the
spineless politicians aren't going to stand up and say no.
(20:08):
The only reason they stand up and say no is
when they know they're going to get fired if they don't.
Speaker 2 (20:13):
Although sadly, I think that's the scenario that a lot
of Democrats want, is they you know, they want people
to be dependent on the government because it gives them
more control, you know. Sadly, I think that's going in
the direction that you know, portion of the country, you know,
with intent right, and then.
Speaker 3 (20:29):
Certainly, I mean we are in a lot of ways
we have surpassed Orwell's nineteen eighty four. And you know,
for those who have read that, the end of the
novel is very clear that you know, there is no
way to put the genie back in the bottle, as
you said, like, once the government gets to this level
of control. There is no turning back. You cannot at
(20:50):
that point put all of the world's evils back into
Pandora's box. And this is one of the reasons why
I and many others are so adamantly opposed to central
bank digital currencies and why we are fighting tooth and
nail to not let that happen, because that is nineteen
eighty four on steroids. That is the government being able
to monitor every single cent, not only how you earn it,
(21:13):
but how you spend it, and even dictating to you
how you can earn it and how you can spend it.
And by the way, this is not like this again,
this is not me being hyperbolic. This is central bankers
and treasury officials from around the world taking off the
mask at this point and just flat out saying, Hey,
wouldn't it be great if we had a central bank
(21:33):
digital currency so that we could do X, Y and
Z things like limit how many airline miles you fly
in a year, to cap how much carbon essentially that
you're spending money on. Wouldn't it be great to have
a central bank digital currency so that we could put
an expiration date on people's savings and earnings in other words,
force them to go out and spend money to quote
(21:53):
unquote stimulate the economy, even things like limiting how much
ammunition or firearms you could buy, you name it, so
that you can't donate maybe to a hate group like
the like the Heritage Foundation. So you know this is
I laughed, But this is a very very serious issue,
and I think it's a very good example of once
you crossed that threshold, there is no going back. Now.
(22:16):
We're not there yet, thank god, And in a lot
of ways, I think federal finance can still be reined in,
can still be corrected, and we can still save the country,
but we do have an uphill, an uphill battle at
this point.
Speaker 2 (22:28):
Now the central banking digital currency is terrifying. So I'm
glad you brought that up, you know, before we go.
I assume your message before Congress was not well received
by some members of the subcommittee. How how was that
and how was it received?
Speaker 3 (22:44):
Oh, my goodness, Lisa, it was like it was like
beating my head against a wall. I mean, honest to goodness,
there's a long list of things that I would much
have rather done in a lot of ways. I mean,
I'm still very grateful that I got the invitation to go,
and I was able to go. But it's just it's
it's saddening and disheartening when half of the people you're
(23:04):
speaking to clearly do not listen to a single thing
you say. And you can tell that both from the
opening statements from the ranking member, for example, and then
from all of the questions from the Democrats who none
of them asked me any questions for some reason. I
can't imagine why. But and then and then you listen
to their closing statements and you realize, oh, my goodness,
(23:27):
you literally didn't hear a single thing I said. You
have your talking points, you know, you want your your
video clip that you can send out in a donor email, basically,
and that's all you're here for. You're not here to
learn the truth. You're not here to see how actual
Americans have been impacted by the very policies that you
put in place, and the policies of which you are
(23:48):
immune from. But you know, you have no problem putting
the American people under your thumb as long as you
don't have to face the ramifications of your own actions.
They clearly just didn't want to hear any I had
to say it was. It was completely ignored. Unfortunately, well
good thing.
Speaker 1 (24:04):
They at least had to listen to it. EJ. Antony.
Speaker 2 (24:08):
We appreciate you taking the time and you know, thanks
for bringing some sanity on all the some fiscal sanity.
Speaker 1 (24:14):
So we appreciate you taking the time.
Speaker 3 (24:16):
No, my pleasure, Lisa, thank you for having me.
Speaker 1 (24:23):
That was EJ.
Speaker 2 (24:24):
And Tony with the Heritage Foundation. Appreciate him taking the
time to come on the show and break that all
down for us. Appreciate you at home for listening every
Monday and Thursday, but you can listen throughout the week.
I want to think John Cassio and my producer for
putting the show together. Feel free to go over to
Apple Podcasts, give us a review.
Speaker 1 (24:40):
Give us a rating.
Speaker 2 (24:42):
Always love reading those Until next time.
We want to share a good friend's podcast with you
this week, Enjoy the Truth with Lisa Booth in the
Clay and Buck podcast Network.
Speaker 2 (00:07):
When Ronald Reagan was running against Jimmy Carter in nineteen eighty,
he asked that famous question, you better off than you
were four years ago? I think for most Americans, the
Americans listening to the podcast, that answer is no. We're
going to talk to EJ and Tony. He recently testified
before a House subcommittee on the impacts of Bidenomics. He's
(00:28):
a public finance economist the Heritage Foundation and a senior
fellow at Committee twin Leash Prosperity. We're going to have
him break down Bidenomics for us. You know, how has
Joe Biden's time in office impacted you, impacted the economy,
and impacted the country. Stay tuned for that conversation with
EJ and Tony.
Speaker 3 (00:52):
Well.
Speaker 2 (00:53):
EJ, thanks so much for coming back on the show.
I guess it wasn't too bad the first time, so
I appreciate you taking the time.
Speaker 3 (00:59):
No, my pleasure, Lisa, thank you for having me.
Speaker 2 (01:01):
So we've got this fight on Capitol Hill right now
over funding what this you know, continuing resolution could potentially
look like. You know, how do you think this is
all going to go down? And what do you think
the resolution will look like?
Speaker 3 (01:15):
Well, it definitely looks like we're going to have a
shutdown at least for a little bit. I just don't
see how Congress is going to be able to reconcile
all of their many differences at this point with only
a couple of days left before before the deadline. In
terms of what this eventually looks like, I think the
only compromise that they're going to be able to really
hammer out will be a slight reduction in spending, which
(01:37):
is a disappointment because we need serious reductions in spending
to get us on any kind of sustainable fiscal trajectory.
But what the end product is probably going to end
up looking like a cross between the most recent fiscal
year and the previous ones. So again that that just
looks like a small reduction in spending.
Speaker 2 (01:54):
Do you think that this will result in a shutdown
for at least in a short period of time.
Speaker 3 (01:59):
Definitely, Again, at least, I just don't see how on
earth they're going to be able to reconcile all of
their differences. There are too many non negotiables on both
sides that are eventually going to have to become negotiables.
But you know, forty eight seventy two hours, I just
don't think that's enough time to get that done.
Speaker 2 (02:16):
You know, you go back to the Reagan Carter debate
in nineteen eighty and he asked that question, are you
better off than you were four years ago? Take us
through what's happened to the economy since Joe Biden has
taken office. Obviously we're not at that four year mark,
but take us through what we've seen so far.
Speaker 3 (02:32):
No, but Lisa, in a lot of ways, Joe Biden
has done as much.
Speaker 2 (02:36):
Feels like it, we're not feels like it's.
Speaker 3 (02:40):
Exactly well, Lisa, to that point, Joe Biden has basically
done as much damage in two and a half years
as Carter did in four If you look at what
he's done to energy markets, what he's done to prices generally,
look at how unaffordable housing is. I was having a
conversation with someone not that long ago, and she was
telling me, I don't understand what young people are complaining
(03:02):
about today with houses, because my first mortgage was twenty
one percent interest. I get that, But guess what, home
prices relative to your income were significantly smaller back then,
And so, believe it or not, housing today is less
affordable than it was when interest rates were three times
as high because the price of the home is also
(03:25):
a big factor in how big your monthly payment is.
And when the price of the home is so high
relative to your income, I mean, housing is just unaffordable.
Half half of Americans today, Lisa cannot qualify for a mortgage.
I didn't say afford a mortgage, I said qualify for it.
Even among those who qualify for a mortgage, you still
have a significant portion who can't afford it. So sorry,
(03:49):
I'm kind of getting ahead of myself here. What has
Joe Biden done to the economy? Nothing good? Unfortunately, what
we've seen are prices steadily rise faster than wages. The
typical American family right now has lost about fifty one
hundred dollars in terms of annual purchasing power. So it's
like if you could roll the clock back to January
(04:09):
twenty twenty one, knock fifty one hundred dollars off that
family salary. That's what they're feeling today. But because prices
have gone up so much the Federal Reserve has belatedly
decided to raise interest rates. That's playing into things like
the exploding cost of housing, but it's also affecting all
(04:29):
kinds of borrowing, Lisa, everything from credit cards to student loans,
to auto loans and everything in between. And as a
result of that, that same typical American family is facing
about another eighteen hundred dollars a year in higher financing
costs because all of those different interest charges have gone
up on all the things that I just mentioned. So
you put all this together, and the typical American family
(04:52):
feels like they're seven thousand dollars poorer today compared to
when Biden took office. I mean, for a lot of families,
that's a whole month's pay.
Speaker 2 (05:01):
Well, I mean that's a significant amount of money. You
recently testified before Congress about Bidenomics. If you had to
sum up Bidenomics, how would you explain it?
Speaker 3 (05:11):
Bidomics is the government spending, borrowing, and creating too much money,
full stop.
Speaker 1 (05:17):
Okay, And that's not good. No, it's not.
Speaker 3 (05:21):
And there's an it's amazing all of the different negative
consequences Lisa that stem from that. If we can just
go back to March for a second, when we had
the banking crisis, which by the way, is still not
over All that has happened from that is that the
Fed papered over the crisis with a bunch of emergency loans.
But those loans are only last for a year, and
(05:41):
when they expire, all those regional banks are going to
be in exactly the same terrible shape according to their
balance sheets that they were then. So all we did
there was kick the can down the road. But how
did we get there in the first place. We got
there because the Federal Reserve created systemic interest rate risk,
which is a fancy way of saying they kept interest
rates way too low for way too long. They promised
(06:04):
inflation was transitory and rates wouldn't go back up, and
they did all of this to finance the massive deficits
that Congress was authorizing by spending money that they didn't have.
And the consequence of that is we've jeopardized our entire
financial system. The dollar has lost value. We have shaking
confidence in the dollar, not just at home but abroad.
(06:25):
Look at all the countries around the world that that
are de dollarizing. In other words, they're no longer going
to use the dollar for settling international transactions, for international trade. Well,
what's going to happen to all of those dollars that
aren't being used that way anymore? They're going to all
come pouring home. I mean, this is just going to
fuel inflation even further.
Speaker 1 (06:43):
But you did papering over.
Speaker 2 (06:45):
Isn't all we do though, you know, I mean, even
dealing with this continuing Resolution, it's papering over. It's not
doing the you know, the proper appropriations process on Capitol Hill.
We papered over government shutdown or you know, during COVID
right lockdowns, shutting businesses down, destroying businesses with this injection
of cash into the economy, which is called inflation, you know,
(07:06):
which is caused inflation.
Speaker 1 (07:07):
So it's like, isn't that.
Speaker 3 (07:08):
All we do?
Speaker 2 (07:09):
Really is that there's no desire, there's no solving problems.
All we do is paper over them, which then creates
new problems.
Speaker 3 (07:16):
Exactly. Could not agree with you more, Lisa, And this
is why, you know, every time the Federal Reserve tries
to draw down its balance sheet, every time it tries
to raise rates, every time it tries to reverse course
and go from loose monetary conditions to tighter monetary conditions.
It quickly realizes that you can't unwind a Ponzi scheme,
and that is essentially what we've done with government finance.
(07:39):
We've turned it into one giant Ponzi scheme, and there
is no way out of that except pain. It can
be long term pain, you can stretch it out over
a very long period of time, like what we've done
with inflation. You can have the pain all at once
when you have these these shocks. That basically is what
happened in the beginning of the rate in years. We
(08:00):
had a big economic shock then. But the nice thing
about that is it gets all the pain out of
the way and it sets you up for longer term prosperity. Unfortunately,
this administration, everyone from the White House to Congress, to
the Treasury to the Federal Reserve, everyone in DC, seems
to rather go the route of just kicking the can
down the road.
Speaker 2 (08:21):
But is that because no one wants to be responsible
for the pain? Right, So, even if Joe Biden or
the next Republican president know that that's what it would
take to turn things around, to put the country back
on a longer sustainable path, in the future. Nobody wants
to be responsible for that pain politically.
Speaker 3 (08:40):
Certainly, that is definitely a big consideration, and that's one
of the reasons why there's a good chance that the
Federal Reserve is basically going to balk next year as
we go into an election. We like to talk about
the Federal Reserve as being politically independent, but let's face it,
they're not. I mean, Jerome Powell wanted to get renominated,
so he kept interest rate slow so Joe Biden would
(09:02):
renominate him, and he got what he wanted and the
rest of us got inflation. And so you're absolutely right.
People don't want to go through the political pain, and
so our political leaders aren't willing to make the tough decisions.
But I mean, frankly, I think, Lisa, there's a lot
of Americans who aren't willing to go through that pain either.
(09:22):
It is a lot easier to get another hit than
to go through detox, and it seems like that is
the preference of most people today.
Speaker 2 (09:29):
Unfortunately, you know, we've got sixty percent of Americans living
paycheck to paycheck. How does that stack up with previous generations?
Speaker 3 (09:38):
Oh goodness, I mean, it's not as bad as say,
the Great Depression, But it's certainly just as bad as
the worst parts of the Carter Years, as the worst
parts of a couple of recessions in the fifties and sixties.
So we have been here before, and we have been worse.
It's not the end of the world, but I mean,
it's clearly not good. And if you ever I wondered
(10:00):
what would happen if, for example, the government just decided
to raise taxes by trillions of dollars one year, Well,
that's basically what we've seen. Not basically, it's literally what
we've seen through inflation. The government has just taxed the
American people into oblivion, and by taking away all of
that what used to be disposable income, the American people
are left with the scraps and are having to try
(10:23):
to make ends meet with that. That's a big reason
why people are taking two three jobs today. Looking at
something like net household wealth, I think is a really
good indicator here, Lisa, because net household wealth is technically
at a record high today, but that's before you adjust
for inflation. As soon as you do that, you find
that it is basically right where it was in the
(10:44):
last quarter of twenty twenty, in other words, when Trump
left office. So virtually all of the increases that we
have seen under Joe Biden are literally just paper money.
It's not real, it's just inflation. All of that additional
household wealth has been confiscated by the government through that
hidden tax and fairness.
Speaker 1 (11:04):
It's not just Biden, you know.
Speaker 2 (11:06):
The last year of you know, Trump's administration too, we
saw a lot of government spending with COVID. How is
Joe Biden's energy policies, I mean, even looking at the
UAW strike obviously, this push for you know, putting a
gun to autobaker's heads, as well as you know, consumers
and into us this push for electric vehicles. You know,
(11:26):
talk about how Joe Biden's green energy policies have shaped
the economy and how they will continue to shape the economy.
Speaker 3 (11:34):
I would distinguish, you know, when we talk about things
like regulatory policy, energy policy, these are all things that
can increase costs. But maybe this is just the academic
in me, but I do want to distinguish that from
from the phenomenon of inflation, which is just prices everywhere
going up because you're actually devaluing the dollar whereas when
we talk about Biden's energy policy, we're talking about individual
(11:57):
things becoming more expensive. The reason I think there's a
lot of overlap there and why people get confused, is
because the price of energy affects everything we do and
everything we buy. So of course, when you make oil,
when you make natural gas, when you make propaane, whatever
the case may be more expensive, you are going to
affect the price of everything else. And what we've seen
under Biden is a repeated throttling of American energy. And
(12:22):
what's really astounding is that these people clearly are not
that concerned about the environment, because they're perfectly fine with
us importing oil and gas from abroad, but not with
us getting it here at home or heaven forbid, we
get enough that we can export, like we did under Trump.
And so as a result of things like removing different
(12:42):
pieces of land that have a lot of deposits, removing
that from exploration, getting rid of a lot of drilling
permits and leases, whether that's up in anwar or other
federal lands, new taxes on oil, on gas, on coal,
all of these things are increasing costs, and again, increase
the cost of energy, you increase the cost of everything else.
(13:03):
And that's precisely what we've seen throughout this administration, in
stark contrast to the last administration, where they essentially did
everything they could to cut red tape to streamline energy
production and distribution, things like pipelines, for example, that had
a tremendous impact on bringing down costs. There's a friend
(13:24):
of mine, he's a professor at a University of Chicago
and economists, and he has estimated that there are literally
tens of thousands of dollars in regulatory costs per family
that have been incurred under the Biden administration versus the
Trump administration. So those costs actually are adding up to
be even more of a burden than inflation.
Speaker 2 (13:46):
It's take a quick commercial break more with EJ and
Tony on the other side.
Speaker 1 (13:53):
So why are they doing it?
Speaker 2 (13:54):
Because to your point, it's not better for the environment,
I mean that whole You know that's a scam when
they say that.
Speaker 1 (14:00):
So why are they doing it?
Speaker 3 (14:02):
At least I suppose the pithy answers. You'd have to
ask them. But if I can put my cinic hat
on for a moment, I.
Speaker 2 (14:07):
Don't think they'll talk to me. Jay, I don't think
that Joe Biden will come on here.
Speaker 1 (14:13):
Probably not would be interested. He's too you go to bed,
it's too.
Speaker 3 (14:17):
Busy hiding in his basement. He won't come on and
talk to you. Well, since it's just you and me here,
let me put on my cinic hat for a moment
and say that this is entirely because of special interests.
I mean, go back to Silindra. That was the prime
example and probably the most famous one where or infamous,
i should say, where you had special interest getting billions
(14:39):
of taxpayer dollars, and those special interests then turned around
and gave a chunk of that back to politicians, mostly Democrats,
but some Republicans too. And sure enough, what did we
see with the so called infrastructure bill that was passed
by Joe Biden that received Republican votes too, unlike the
Inflation Reduction Act, and that contained one hundred of billions
(15:01):
of dollars that are essentially going to go to these
special interests of so called green companies that I mean,
there's nothing green there except the money, the money trail,
and so these companies who are I mean, look at
look at what they've done with uh, with the automakers.
This I think is a great example. We gave Ford
all of these loans that are guaranteed by taxpayers. So
(15:24):
if these different ev projects work out and the automakers
make money, then they can repay the loans, and then
whatever profit they get after that is theirs to keep.
But if things go south, if these projects don't work out,
if they can't sell these cars, or if the research
and development turns out to all be a flop and
they can't even make the cars, guess what, they don't
have to repay the loans. The taxpayers on the hook.
(15:47):
So what are what are the automakers investors going to do?
What are the people work for the automakers, the Union's
going to do. They're going to donate a lot of
money back to the Democrats who funneled all of them
money to the special interests in the first place. It
is just this dirty merry go round of taxpayer dollars.
Speaker 2 (16:06):
You know, I saw that you wrote in a column recently.
You had written talking about interest rates for the government.
In less than a decade, interest payments will crowd out
more than half of existing government spending. What does that
mean for the country and what does that mean for Americans.
Speaker 3 (16:21):
Not to sound hyperbolic here, but this is the doomsday scenario.
And I know a lot of people are probably rolling
their eyes to that and be like, oh, here we go.
Let me say, Conservatives, I think have had egg on
their face for several decades now by being hyperbolic when
talking about the deficit, talking about the debt, and saying, oh,
this is going to end the country in a certain
(16:42):
number of years, whatever the case may be. Here's the thing.
They had the trajectory right, but they had the magnitude wrong.
They're absolutely right that we're heading in the wrong direction.
But no one actually knows where the point of no
return is. It has proven different for different countries at
different periods in time, in different locations around the world.
So I'm not going to say, Okay, five more years
or eight more years, or ten more years of this
(17:03):
and it's the point of no return. I don't know
where that is. What I do know is this is
very very quickly approaching a catastrophic level where the government
is literally going to be primarily paying for its own debt,
not providing goods and services to the American people. We're
not talking about building roads, We're not talking about writing
checks for Social Security and Medicare. We're not talking about
(17:26):
financing the military. We are talking about literally just paying bondholders.
And there is no way out of that, because once
you get that far down the rabbit hole, you are
spending so much on debt financing that you don't have
enough leftover to pay for central services, let alone pay
down the debt, and so you are stuck constantly taking
(17:48):
out more debt, and therefore the interest you pay on
that debt is going to go higher and higher and higher,
until eventually it becomes the entire budget. Now, obviously that's
not going to happen. The government would just default at
that point, like countless governments around the world have before.
But that's the direction we're heading. It's not good. I mean,
just looking at interest the latest interest rates today Lisa,
(18:11):
on different government bonds. Next year, the next fiscal year,
which begins in just a couple of days here October first,
we're going to see interest on the debt hit about
one point five trillion dollars. So the optimistic scenario of
nine hundred billion or even a trillion dollars, forget that,
we are going to go way beyond that very very quickly.
Speaker 2 (18:34):
Well, I appreciate your caution and not being Greta Thumberg
who recently had to deleat a tweet because she said
that the world would end by twenty twenty three, and
then of course we're here. So so he's smart.
Speaker 1 (18:46):
To be cautious, you know.
Speaker 2 (18:48):
I mean, given you know what we've seen, and given
the state of the economy and the country right now,
I mean, how do you put the genie back in
the bottle? You know, how do you rectify the wrongs
of decades?
Speaker 3 (19:02):
Now?
Speaker 1 (19:02):
What do you do moving forward? How do you solve this?
Is it solvable?
Speaker 3 (19:07):
That's a very very good question. I would say it
is solvable. You know, we've gotten ourselves into very tight
spots before. I mean, let's face it, we had a
civil war where the country was quite literally torn apart,
and that to this day remains the most catastrophic event
in American history, at least in terms of lives lost,
(19:27):
depending on how you want to adjust for inflation, perhaps
financially as well. And so we have definitely been through worse.
We can get through this. The question is do we
have the political will to actually make that happen? And
that's where I'm not so sure, because we are at
a point where so many Americans have become dependent upon
(19:48):
the government, so many Americans are not even paying federal
income taxes but getting money from other people's federal income
taxes that you have to wonder are there enough Americans
left who have had enough, who are willing to stand
up and to say no. Because until that happens, the
spineless politicians aren't going to stand up and say no.
(20:08):
The only reason they stand up and say no is
when they know they're going to get fired if they don't.
Speaker 2 (20:13):
Although sadly, I think that's the scenario that a lot
of Democrats want, is they you know, they want people
to be dependent on the government because it gives them
more control, you know. Sadly, I think that's going in
the direction that you know, portion of the country, you know,
with intent right, and then.
Speaker 3 (20:29):
Certainly, I mean we are in a lot of ways
we have surpassed Orwell's nineteen eighty four. And you know,
for those who have read that, the end of the
novel is very clear that you know, there is no
way to put the genie back in the bottle, as
you said, like, once the government gets to this level
of control. There is no turning back. You cannot at
(20:50):
that point put all of the world's evils back into
Pandora's box. And this is one of the reasons why
I and many others are so adamantly opposed to central
bank digital currencies and why we are fighting tooth and
nail to not let that happen, because that is nineteen
eighty four on steroids. That is the government being able
to monitor every single cent, not only how you earn it,
(21:13):
but how you spend it, and even dictating to you
how you can earn it and how you can spend it.
And by the way, this is not like this again,
this is not me being hyperbolic. This is central bankers
and treasury officials from around the world taking off the
mask at this point and just flat out saying, Hey,
wouldn't it be great if we had a central bank
(21:33):
digital currency so that we could do X, Y and
Z things like limit how many airline miles you fly
in a year, to cap how much carbon essentially that
you're spending money on. Wouldn't it be great to have
a central bank digital currency so that we could put
an expiration date on people's savings and earnings in other words,
force them to go out and spend money to quote
(21:53):
unquote stimulate the economy, even things like limiting how much
ammunition or firearms you could buy, you name it, so
that you can't donate maybe to a hate group like
the like the Heritage Foundation. So you know this is
I laughed, But this is a very very serious issue,
and I think it's a very good example of once
you crossed that threshold, there is no going back. Now.
(22:16):
We're not there yet, thank god, And in a lot
of ways, I think federal finance can still be reined in,
can still be corrected, and we can still save the country,
but we do have an uphill, an uphill battle at
this point.
Speaker 2 (22:28):
Now the central banking digital currency is terrifying. So I'm
glad you brought that up, you know, before we go.
I assume your message before Congress was not well received
by some members of the subcommittee. How how was that
and how was it received?
Speaker 3 (22:44):
Oh, my goodness, Lisa, it was like it was like
beating my head against a wall. I mean, honest to goodness,
there's a long list of things that I would much
have rather done in a lot of ways. I mean,
I'm still very grateful that I got the invitation to go,
and I was able to go. But it's just it's
it's saddening and disheartening when half of the people you're
(23:04):
speaking to clearly do not listen to a single thing
you say. And you can tell that both from the
opening statements from the ranking member, for example, and then
from all of the questions from the Democrats who none
of them asked me any questions for some reason. I
can't imagine why. But and then and then you listen
to their closing statements and you realize, oh, my goodness,
(23:27):
you literally didn't hear a single thing I said. You
have your talking points, you know, you want your your
video clip that you can send out in a donor email, basically,
and that's all you're here for. You're not here to
learn the truth. You're not here to see how actual
Americans have been impacted by the very policies that you
put in place, and the policies of which you are
(23:48):
immune from. But you know, you have no problem putting
the American people under your thumb as long as you
don't have to face the ramifications of your own actions.
They clearly just didn't want to hear any I had
to say it was. It was completely ignored. Unfortunately, well
good thing.
Speaker 1 (24:04):
They at least had to listen to it. EJ. Antony.
Speaker 2 (24:08):
We appreciate you taking the time and you know, thanks
for bringing some sanity on all the some fiscal sanity.
Speaker 1 (24:14):
So we appreciate you taking the time.
Speaker 3 (24:16):
No, my pleasure, Lisa, thank you for having me.
Speaker 1 (24:23):
That was EJ.
Speaker 2 (24:24):
And Tony with the Heritage Foundation. Appreciate him taking the
time to come on the show and break that all
down for us. Appreciate you at home for listening every
Monday and Thursday, but you can listen throughout the week.
I want to think John Cassio and my producer for
putting the show together. Feel free to go over to
Apple Podcasts, give us a review.
Speaker 1 (24:40):
Give us a rating.
Speaker 2 (24:42):
Always love reading those Until next time.
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