Brian Crombie Radio Hour - Epi 1427 - Trump's Big Spending Agenda with Sam Sivarajan

Tonight on The Brian Crombie Hour, Brian interviews Sam Sivarajan about his article “Why Trump’s big spending agenda is a worrying sign for investors on both sides of the border”.
Sam Sivarajan is a speaker, independent wealth management consultant and author of three books on investing and decision-making. Sam discusses the significant impact of rising debt and deficits in the United States and Canada, highlighting the unsustainable nature of current spending. 

Sam emphasizes that the U.S. could soon spend more on interest than on defense, while Canada and Ontario are also facing substantial debt-related costs, which could limit funding for essential services like healthcare, education, and infrastructure. They agreed that now is not the time to increase deficits, as it resembles "spiking the punch bowl" rather than "taking it away”. Sam also covers the qualities needed in leaders today, emphasizing the importance of understanding complexity and interconnection rather than just managing risk. He highlights the need for leaders who invest in people, rebuild trust, and embrace reform, while also noting that citizens can influence their leaders. Sam uses the analogy of experienced mountain climbers who stop respecting the mountain to illustrate how leaders should maintain respect for complexity.

Episode Transcript

Speaker 1 (00:00):
The views expressed in the following program are those of
the participants and do not necessarily reflect the views of
Saga nine sixty AM or its management.

Speaker 2 (00:17):
Egive me everyone, my name is Brian Crombie, and I
welcome you tonight to the Brian Crombie Radio Hour on
SAGA nine sixty. I'm endlessly fascinated by and curious about
the world around us, about business, politics, the arts, culture, developments,
social issues and the people who are shaping the future.
Every night I have the privilege of coming to you
and diving into conversations with change makers, thought leaders, entrepreneurs,

(00:41):
politicians and everyday heroes to unpack their ideas and stories
that matter. What's the future of our economy, How do
we build stronger communities? What can we learn from sports
and music, theater or the arts? How does policy shape
real lives? What does leadership look like today? If it's
interesting and relevant and we're talking about you'll hear about

(01:03):
it here from me and from others that I have
the real opportunity to interview. These are real conversations, in
depth conversations. These are ideas we're sharing. This is the
Brian Crombie Radio Wire and tonight We've got a really
good guest, a really interesting guest for you. Stay with us.
My guest tonight is Sam Severagen. He is a guest,

(01:24):
he's been a guest on my show before. He's an
incredibly good author, he's a keynote speaker, he's a behavioral
finance expert, he's an author, he's a podcast host, and
he's a really interesting gentleman that writes very provocative columns
and the one most recently was challenging our economy and
challenging where we're going, and so I thought it'd be

(01:45):
great to have him on to challenge us all into
what's happening. So, Sam, welcome to the show.

Speaker 3 (01:51):
Brian, pleasure to join you as always.

Speaker 2 (01:53):
And you're calling in from Austria. I understand.

Speaker 3 (01:57):
I am. We're spending a working hall in the beautiful
city of Vienna, Austria, and so I'm quite privileged to
be able to spend a bit of time in Toronto
and a bit of time in Vienna, and I'm grateful
for that opportunity.

Speaker 2 (02:12):
You wrote most recently about I guess it was the
Big Beautiful Bill, but most importantly about the rising debt
deficits in the United States. And what you described is
I think reckless spending. What's the impact of that, both
on the US but also more importantly on us here
in Toronto, Ontario and Canada.

Speaker 3 (02:31):
Yeah, I think Brian, the numbers are absolutely staggering, and
we're no longer talking about abstract theory but hard principle.
The US, for example, as a result of this one
big beautiful bill, is projected to spend nearly a trillion
US dollars a year on interest alone on their debt.

(02:52):
That's two and a half billion dollars every single day
just to service the existing debt. Into perspective, that's more
than they spend today on their entire defense budget. And
that's clearly not sustainable if the US wants to continue
to grow and prosper. But here's what I think should

(03:13):
really worry Canadians. We're not far behind, and we're kidding
ourselves if we think this is just an American problem.
For instance, in twenty twenty four, our federal government spent
fifty four billion Canadian dollars just on debt interest, more
than the entire Canada Child benefit or our national defense budget.

(03:36):
And Ontario alone spent over fifteen billion dollars on debt interest,
and that's more than Ontario allocates for colleges and universities combined.
So I encourage our listeners to think about what this
means practically rising debt ties government sends just like it
does individual households. There's less money for healthcare, are less

(04:00):
money for education, less money for infrastructure or climate action,
as we're well aware dealing with the consequences in the
last few weeks. And when rates rise or investors lose confidence,
which they will, this cost of inaction is going to
become real and real fast. So I lived through the
nineties debt crisis in Canada as you have, Brian, and

(04:24):
I also watched the market turmoil with the UK bound
market volatility in twenty twenty two under Liz Trust. So
markets don't give you a gentle warning. They move quickly
and when they do, your options shrink dramatically. Even today,
three years later, UK bond yields are elevated because of

(04:45):
a lack of faith as a result of Trust's mini budget,
which got or kicked out of office as the shortest
serving UK Prime minister in history.

Speaker 2 (04:54):
So you know, I studied canes and sort of deficits
and pluses, and I thought that the whole attitude that
someone said, maybe it was Kine's about taking the punch
bowl away when the party gets started or it goes
on too long. You know, we've got both in Canada
the United States, particularly in the United States, low unemployment,

(05:15):
the growth in the GDP, the economy seems to be okay,
the stock market is at an all time high. Why
is now the right time to increase deficits and the
debts so much? And isn't that really almost spiking the
punch bowl? Not even close to take it away?

Speaker 3 (05:33):
So sorry? Are you asking? Why is now the time
to not raise the deficit?

Speaker 2 (05:37):
And why?

Speaker 3 (05:38):
No?

Speaker 2 (05:38):
The opposite? Why would? Why would Donald Trump? Why would?
Why would the US Congress? Why would the Americans think
now is the right time to do that? Like, I
just don't understand.

Speaker 3 (05:47):
Yeah, look I don't either, And I think this is
part of the problem that I tried to talk about
in the article. In my experience in the finance world,
whether it's in wealth man been or investment banking, we
used to have a saying that you don't fix a
leaky roof when it's raining, The idea being that you

(06:08):
put your fiscal house in order when the times are
good and not wait until times are bad. Let me
give you an example from history. The New Zealand in
the nineteen eighties was facing international pressure. There was a
run on the currency. They had a huge level of debt.

(06:31):
The debt interest was gobbling up a huge amount of
their budget. And they had just voted in Labor government.
So this is a left leaning progressive government that had
a lot of plans on what they were going to
do to expand you know, social services, infrastructure and everything else.
Within a few weeks of being elected, this government had

(06:53):
to do one of the most radical reforms in New
Zealand's history, like liberalized a lot of the economy, privatized
a lot of their national companies, et cetera. And they
had to do it not because this was political ideology.
It actually split their Labor Party, but it was what
was needed if the country wasn't going to bank go bankrupt.

(07:16):
And you know, they did it because they were forced
to do it. And I think your question about why
we're raising deficits in a good time, et cetera, whether
it's Canada or whether it's the US, is also the
reason that sort of worries me. And I guess that
prompted that article is if we're not going to try
to get a control of our finances and dictate our

(07:39):
future when we can, when it's in our control, when
we can make those choices, We're going to wait and
the market is going to tell us what we're going
to correct, and when we're going to correct, what we're
allowed to spend on and what we're not allowed to
spend on. And I guess the question is do we
want that?

Speaker 2 (07:55):
But it's not, is it? You know, I've heard several
Republican politicians and commentators of the course the last couple
of days, you know, respond to criticism about what's going
on with well, look at the stock market, it's at
a high. You know, you quoted Liz Trust and her
short lived government in the UK. The stock market and
the bond market responded very quickly to what they thought

(08:16):
was was was ill advised as strategies back in the
nineteen nineties, which you also referred to. You know, I
think there was a Wall Street Journal article that called
it the Canadian peso crisis, that was saying the Canadian
dollar was comparable to the Mexican pesa which was just
recently at that time under a huge amount of attack.
But right now in the United States, it appears that

(08:39):
everything's great. The stock market thinks this is wonderful. The
stock markets at a high, and you know, people have
said that this will lead to inflation, this will lead
to the teris will lead to inflation. But inflation's you know,
under control. So why is not the Why isn't the
market responding.

Speaker 3 (08:56):
I think there's lots of theories and discussions, and I
think you're going to get the proponents of this type
of bill and this type of spending arguing for it.
I think the reality is complex, but I think we
can still draw some comfort from fundamentals on it. The

(09:19):
I've seen a lot of very smart commentators make the
point that the US is basically printing money. Okay, the
FED is printing money with the you know, various forms
of quantitative easing. Ever since the two thousand and eight recession.
They've not stopped, They've just called it different names. So
there's the US market is a wash with liquidity, and

(09:41):
that liquidity has some place to need, someplace to go.
So there's asset price inflation that you're finding, whether it's
in the stock market, or whether it's in housing prices,
et cetera. That isn't tied to the real economy. And
I think history shows that eventually fundamental will rule. We've
saw that, whether it's dot com, we've saw that, whether

(10:04):
it's AI companies, we've saw that, whether it's with fintech startups.
I think that there is always a tendency for markets
to get ahead of themselves, irrational exuberance, as Alan Greenspan
said it at one point, to get ahead of itself.
But eventually fundamentals rule, and fundamentals are going to depend

(10:24):
especially at a debt level. Think about it from an
individual perspective, our household perspective. The moments that the banks
think that you can't afford to repay is when they
turn off the tabs. The moment that the creditors for
the US for instance, which by the way, are predominantly
international central banks and international economies, the very ones that

(10:47):
are being threatened now with the erafs, etc. The moment
they decide that it's too much of a financial risk
to be investing in US treasuries or US debt, it
is going to turn on the hairpin. The market reaction
and sentiments. So I don't disagree that currently the market

(11:08):
is doing great and it seems to be enjoying this
call it benefit of this bill and spending, et cetera.
I think the question that investors and policymakers and us
as average consumers need to ask ourselves is and I
think you had the right analogy. Before there's a punch

(11:30):
bowl that is going around, is it when is it
time to take the punch bowl? Or do we think
that the party is here to stay and will never
go away?

Speaker 2 (11:40):
Well, it seems like Donald Trump and the Republican Party
in the United States thinks the party is going to
go on for a while. So maybe we have to
wait to the hangover before we have the reckoning. You know,
you mentioned a couple of lessons. Are there other lessons
from history that we should be looking at? Liz Trust
and the UK government is one Canada in the nineteen nineties.
Has this happened in the United States? Is the United

(12:01):
States had a reckoning that they've had to deal with?
Are there are other lessons that you'd like to point
us to.

Speaker 3 (12:06):
I mean, we've all had reckonings, right, I mean, it's
the idea of debt and everything else. This was the
Gilded era in the nineteen twenties in the US, for example,
where you know stock markets rocketed up, where you know
some of the great turns of phrase that we've got today.
Where I think it was the JP Morgan, the financier,

(12:29):
not the bank who said that he knew that we
were in trouble when the shoeshine boy was giving him
stock tips, right, I mean, and I think we get
we've experienced all of this before. And I think this
gets to the heart of what I call the institutional
memory crisis. In the article, so our grandparents lived through

(12:52):
the Great Depression, War and financial crises around the world.
It didn't matter what country you were in, we were affected.
Prudence wasn't a theory to that generation, it was a
survival instinct. They understood what happens when systems break down completely. Now,
your listeners might like to read a book by a
series of historians, William Strauss and Neil Howe called The

(13:14):
Fourth Turning, and this connects to what they're calling the
Fourth Turning. It was a book written in the nineteen
nineties and they talk about predictable eighty ninety year cycles
where each generation plays a different role. For the first generation,
or the generation that builds the institutions, is followed by
those who maintain them, than those than by those who

(13:36):
question them, and finally by those who must rebuild them
when those institutions collapse according to them, and I believe
a lot of that. We're entering that final phase now,
the rebuilding phase, but we're trying to avoid the hard
work of actually rebuilding, and I think that's the problem.
You know, both Canada and Ontario, for instance, are seeing

(13:57):
rising debt levels, but without that same urgency, sense of
urgency or long term vision. We have people making decisions
at the policy level, but at companies today that have
never known anything but prosperity. They've never experienced what happens
when debt spirals out of control and institutions lose public trust.

(14:17):
I mean you talked about the nineties. I mean in
the nineties we Canada faced the real debt wall. Interest
payments consumed over thirty cents of every tax dollar and
our debt to GDP ratio exceeded seventy percent. Now we're
not there right now, but the ninety five Liberal budget
had to make brutal cuts. It was painful, but we

(14:38):
course corrected and we had prosperity for a long time
after that. I think the question is have we forgotten
that pain?

Speaker 2 (14:46):
You know, that happened not just in Canada, but in
the United States at that time. I'm not sure exactly when,
I can't remember, but Bill Clinton became president of the
United States instituted a lot of fiscal discipline as well,
and by the end of the nineteen nineties, the US
and Canada were both in surplus, and so much so
that I remember people were worried that too many surpluses

(15:06):
would be the problem and we'd run out of opportunities
for people to invest in government bonds. And they were
predicting at the time, like it's astounding to think, but
they were predicting, you know, like the surpluses that would
go on forever and a complete elimination of the debt.
So it was sort of a worldwide situation at the time. Today,

(15:28):
we've got a policy situation in Canada where we're going
to increase our defense spending fairly dramatically. We have not
been spending two percent of GDP on defense. We've now
committed to spend the two percent of GDP on defense,
and at the same time, NATO has increased that commitment
to three percent and five percent if you include some
infrastructure spending. How are we going to be able to

(15:50):
afford that? What's that going to be doing? Isn't that
justification for increasing the debt? And if we do that,
which you know, people are saying, we've got a war
in Eastern Europe, We've got a war in the Middle East.
It's read an article this past week and the New
York Times that was suggesting we may actually be in
a Third World War already and not sort of recognizing
and realizing it yet. Don't we have to spend a

(16:10):
lot of more money? And if we have to spend
a lot of more money on defense, should that be
debt or should that somehow be financed differently?

Speaker 3 (16:20):
So, I think I'll answer that question in a number
of different ways without getting into the politics of it.
So your point about defense spending having to increase, Yes,
that's two percent or five percent of GDP, but translate
that into what really matters to us as Canadians. That
the figure that I saw, and don't quote me on it,

(16:41):
but it's somewhere to thirty to forty percent of federal
budget revenues, Okay, tax revenues of what they're dealing with
every year, et cetera. So the five percent of GDP
is a completely different figure from the fact that this
has to be financed out of the budget that the
government has each and every year. And if we're talking

(17:01):
it being thirty to forty percent, that means it is
crowding out. What is it crowding out? You know, we
don't We're talking about not enough spending on healthcare. We're
talking about not enough spending on infrastructure. We're talking about
not enough spending on you know, critical things that we
need to do to build productivity. So I think the
argument that I would use to say that do we

(17:22):
need to spend defense, I'm not going to argue against it.
I'm simply pointing out the fact that, you know, yes,
if we have to take on debt, you have to
take on debt. But the idea of having dry gunpowder
resonates with me. So, for example, when we had COVID
and we took on increased our debt dramatically, that made sense.

(17:45):
You do you don't sit there and be dogmatic and
say we're not going to increase the debt when we're
in the facing an emergency. But in my mind, fiscal prudence,
whether that's a family or whether that it's a government,
dictates that when the emergency has passed, you try to
take steps to kind of restore some of that dry gunpowder. So,

(18:09):
you know, the COVID has been over for the last
two years, shall we say possibly three, has there been
a concerted effort to restore some of that dry gunpowder
around the world in Canada, No, I think to me,
the question becomes, if we keep saying we have to
spend this without making hard trade offs, I think we're

(18:33):
in trouble in the long run. And I think maybe
that's the fundamental point I want to make, Brian, and
for your listeners, I'm not here to tell people or
policy makers that you know, do X instead of why.
What I am suggesting is that life is about trade offs,

(18:54):
whether it is an individual, whether it's a company, or
whether it is a government. Doing A might mean that
you can't do B. And we have not been making
those trade offs, and certainly the politicians have not been
framing those trade offs to the electorate, et cetera. But

(19:14):
I think the key message I would say what history
has taught us is that prosperity is earned in every
generation and if we forget the past, we risk repeating it,
but with much less flexibility, and in a world, as
you rightly put out, that is increasingly uncertain.

Speaker 2 (19:35):
Wow, We're gonna take a break for some messages and
we come back. I'm gonna ask Sam what do we do?
What do we as individuals do to prepare ourselves for
this world that Sam is suggesting it's going to become
a little bit more challenging. To stay with us. Everyone
will be back in just two minutes.

Speaker 1 (19:53):
Stream us live at SAGA nine am dot CA.

Speaker 2 (20:08):
Welcome back everyone to the Brian Cromby Radio Or. We're
talking to Sam Severagent today. He's an author, he's a podcaster,
he's an economist, he's a behavioral economist, and he's an
author of some really interesting articles that I've read in
the newspaper. I've had the privilege of interviewing before and
uh and we're chatting tonight about what's going on in
the United States and Canada with increased deficits and increased
debt and what it has, what's the effect it has

(20:30):
on the nation, on the economy, et cetera. But Sam,
I want to turn a second, if I could a
couple of minutes, because you're a behavioral economist on how
this you think impacts people? And what and what?

Speaker 1 (20:45):
What can we do?

Speaker 3 (20:46):
What?

Speaker 2 (20:47):
What do you recommend people do about this world that
uh that you know, I think if if, if, if
You're right, it's going to lead to at some point
in time in the future, higher inflation. It's going to
lead to less flexibility to deal with some issues it's
going to deal it's going to lead to some market uncertainty.
How do you deal with all that?

Speaker 3 (21:06):
That's the million dollar question, Brian, and I guess it
gets to the core of the work that I'm currently doing.
Most people plan, most companies plan for the next quarter.
But what's unfolding now is I believe systemic So we
have decay of governance, we have aging demographics, we have
strained social systems. This isn't just risk, and I think

(21:28):
that's a critical distinction. Risk we can model, we can hedge.
This instead is structural uncertainty and it requires completely different thinking.
Let me just expand on that. So risk is manageable,
we have models for it. Uncertainty is not risk. Follows patterns.
Uncertainty requires us to adapt instead of trying to predict

(21:49):
or control. The people in organizations who survived major disruptions,
even like things like COVID, weren't the ones with perfect plans.
They were the ones who could adapt when their plans failed.
So this is exactly what I mean by the uncertainty Advantage,
which is the working title of my forthcoming book, and
it applies whether you're running a business, managing a portfolio,

(22:12):
or just trying to secure your family's future. It's about
building systems and practices that thrive when you can't predict
what's coming next. So in the book and what I
do a lot of speaking and consulting work on right now,
I use a framework that I developed called a case foundation.

(22:33):
It stands for control, ALIGNE span and establish, So when
you ask the question, control a lot of line span
and establish. So when you're facing this kind of uncertainty
that we're just talking about as individuals, we need to
focus on what we can control and let go of

(22:56):
things that are not in our control. So what the
market is going to do, what policies are going to
be impacted? And I'll come on to ways that we
can do that. We need to align your actions with
your priorities. You know, we can't just say that fiscal
prudence is important and then act like it doesn't matter.
I think the one key thing for all of us is,

(23:18):
and that's true for individuals, it's true for companies, and
that's true for governments, is that we have to span
the gap, balance the pressures, immediate pressures and future consequences. So, yes,
we can take decisions that make sense today, we have
to ask ourselves, well that makes sense in six months,
six years from now, or ten years from now, and

(23:40):
are we okay you know, with that consequence or is
that for somebody else in the future to deal with.
And finally established means that we need to set metrics
that actually matter for our long term prosperity. So it
isn't just things like you know, from a government perspective,
I don't think it can just be gd P growth.

(24:01):
When GDP may grow, but you know, I think there's
a very real situation, certainly in the US but also
in Canada, where inequality is rising, unaffordability is rising. So
the GDP may be rising, but if it's only accruing
to a certain a small segment of the population. Maybe

(24:21):
that's the wrong metrics that we're focusing on.

Speaker 2 (24:25):
So one of the things that's been talked about in Canada,
I'm given this dramatic increase in spending because of defenses,
increasing the GST tax Again, would that make sense in
today's environment? So, yes, we're going to have this increased expense,
but we should finance it not through debt. Is that

(24:46):
the kind of systemic adaptation that you think might make sense.

Speaker 3 (24:51):
It's one and I'm not suggesting, you know, and it's
obviously not popular. I'm not suggesting that a rising taxes,
a rising GST is the right answer. I am suggesting
that forces a conversation that I think we need to
have amongst electorate, amongst policy makers of what are the
trade offs that we're making. And it comes back to

(25:13):
that point that I said before. We've avoided I think
as the electorate but also as policy makers, having to
make some hard choices about what we know doing X
means that we can do Why. So raising debt without
thinking about it, without having to debate about it, has

(25:34):
avoided us having this hard conversation where if you actually
talk about raising taxes, I think there will be. It
will force us to have a conversation what do we
really want our money to be spent on and what
do we think is frivolous or not a good use
of our money.

Speaker 2 (25:54):
So you think we need to have that hard conversation.
We haven't had the hard conversation though. In the United States,
in this big beautiful bill, they did talk about reducing
some social security spendings. You know, some Democratic commentators have
called it the biggest reduction in the social safety net
in the American history, so that they have without really
having the conversation, but they have, you know, made those reductions,

(26:17):
not necessarily with popular support, but they have made those reductions.
In Canada, I don't think we've talked at all about
where this money is going to come from for this,
this increase in defense spending. If you're right that this
is sort of or I'm right putting it, this is
spiking the punch bowl and it's going to lead to

(26:37):
it should lead to increased inflation, both in Canada the
United States, because we're spending a lot more government money
even when the economy is doing well, even when unemployment
is low. What that should mean and what that what
what did happen during COVID. Is it led to inflation,
a massive surgeon inflation? You know, I think we all
got very upset with the massive surgeon inflation in twenty

(26:59):
twenty two, and we kick governments out around the world
because we reacted against inflation. Is that a risk today?
And what can we do as individuals if we think
there's a risk of inflation in the future.

Speaker 3 (27:16):
So, I think we're still dealing with the consequences of inflation.
It's whether it's the high prices at the grocery store,
et cetera. I mean, the rate of inflation hasn't It
may have been managed, but it still remains. The prices
are a lot higher than they were before, and there's
a very real affordability crisis for many Canadians. I think

(27:40):
you're right. I think very likely that it's going to
put pressure on governments around the world as these kind
of debt constraints and fiscal constraints become become more apparent.
And look, we see this in the UK. The UK's
in permanent austerity right now. I mean, whether it was
a conservative government under List Trust or a labor government

(28:02):
under Kekere Starmer, I think they're very handstringed about what
they can do and not do, where they can spend
and not spend, et cetera. I think for us as Canadians,
we have a perhaps a slightly bigger problem. We've been
bemoaning the fact that we have a productivity gap for years.
I think that, in my opinion, there's a very real

(28:24):
concern that rising government debt and government spending et cetera,
is crowding out private investment and private productivity issues. So,
I mean, we've seen this in the growth of the
publics versus the private sector over the last call it,
five to ten years, et cetera. So, again, without sounding

(28:44):
like a broken record, my concern, and again not dictating
policy or what our priority should be, it is that
we are seeming to act or make decisions implicitly without
explicitly considering what the consequences the trade offs are that
debate is not occurring, and if the debate occurs and

(29:06):
we as a electorate decide, you know what, We're okay
with a higher debt. We're okay with the implications for
our our our well being. We're okay for the implications
for future generation, et cetera, et cetera. That's one thing.
But I believe, and I suspect that you believe that

(29:27):
a lot of these decisions are being made implicitly and
we are just left to kind of fund it if
you will.

Speaker 2 (29:34):
You talked about, you know, we have to think about
those things that we can't control and and and don't
try to control them. Our Prime Minister Mark County has
talked about that a fair amount in regard to Donald
Trump and what he's doing on tariffs, and he's talking about,
you know, we we we can't control Donald Trump and
what threats we have on tariffs, and so therefore we
have to give thought to what we can do ourselves.

(29:56):
You use the word agility, that we need to have
a jill both personally and from an institutional standpoint. What
do you mean by that? What's agility in your mind?

Speaker 3 (30:07):
So to me, that's adapting, right, it's if the again
this goes back to the case foundation. You know, you
can't control CARET policy. You can try to influence it.
We're negotiating, we're having an impact, but you know, if
it happens, it happens, and so the question becomes what
do you do in response to it? And I think

(30:30):
that is The only thing that is really in our
control is what is our response. And being agile, in
my mind, means we don't throw up our hands and say, oh,
woe is me or woe is our country, et cetera.
We need to say, Okay, if this happens, what can
we do? From an agility point of view, So you
see companies already doing it. They're kind of rethinking their

(30:52):
supply chains, they're rethinking some of the growth markets or
export markets. You know, even Canada for after one hundred
and fifty odd years or almost one hundred and fifty
years since confederation, we're actually talking about removing inter provincial
trade barriers.

Speaker 2 (31:08):
Now.

Speaker 3 (31:08):
Whether that happens or not, we'll see. But that's being agile.
You know, I'd love for us to see us And
this has got nothing to do with the US. But
in a portfolio, in investor portfolio, you would never have
one stock that accounts for eighty percent of your portfolio.
As a company, you would never have one client account

(31:29):
for eighty percent of your business. That suicide, I think
as a country, like, we've relied too long for having
one trading partner that dominates our discussion. And look, we've
had in twenty eighteen, we renegotiated NAFTA. In twenty twenty five,
we look like we're doing it again, and who knows

(31:52):
what's going to happen, you know, down the road, even
if we agree to it. So to me, agility means,
whether it's an into individual, whether it's a company, whether
it's a government, it is focusing on the things that
you can control, but retaining the skills, the ability, and
the mindset that says that, Okay, just because we can't
control the outcome, doesn't mean that we can't adapt to it,

(32:16):
that we can't find a response that is going to
allow us to, you know, take a de tour if
you will, but still get to the end goal of
what we want to do.

Speaker 2 (32:27):
I interviewed ahead of a business school this past weekend
and him and a newstry company said to too many
people in Canada are thinking that our current situation is
going to change in either a year after the midterm
elections or in three years after the next federal elections
in the United States. And he said, but that's not
the right attitude. You got to think about what happens

(32:48):
if jd Vance wins. And he's there for eight years.
So it's not a one year or a three year
time period you got to live through, but it's an
eleven year time period that you got to live through.
And what would you do differently if you actually knew that?
Is that sort of what you're talking about in an
agility is that you've got to be you know, hoping
for one scenario maybe, but planning for and being able

(33:10):
to insulate yourself from the other scenario.

Speaker 3 (33:13):
Yeah. Look, I think there's a saying hope is not
a plan, right, So you hope for the best, but
you plan for the worst. And I think, to me,
I guess I would expand on that a little bit.
Planning I think suggests a degree of control that you
can't have. So you plan for possible outcomes, and I
think that's important, but you also don't get wedded to

(33:37):
any particular outcome coming. I think that even if you
think about three different scenarios that might occur, and I
think it's important to go through that exercise, I think
you still need to be ready that none of those
three materialize, because that's likely what is going to happen.
The world never exactly unfolds as we plan it or
predict it. Or hope for it. But if you have

(34:00):
done the groundwork, if you built the foundations, if you've
built I think the thinking, the mindset, the frameworks, And
this is what I talk about in my forthcoming book.
I think you're as well positioned as you can be
to be adgile, to be adaptable, to make decisions that
work no matter what is thrown your way. And I

(34:22):
think things are going to get thrown our way fast
and furious, you know, for the rest of twenty twenty five,
for the rest of this decade, and for the rest
of certainly I think your life and my life.

Speaker 2 (34:34):
You know, Sam, you're a behavioral economist. I talked to
a few people at a party I was at this
past weekend. They said, you know, they almost threw up
their hands and said, this is such a crazy world
that we're living in, with you know, the big beautiful bill,
with tariffs, with trade disputes, with wars going on. I
just want to go to a Coldplay concertor I just
want to go to a Taylor Swift cons I just
want to, you know, forget it all and have a

(34:55):
little bit of fun. Is that smart?

Speaker 3 (34:58):
There's nothing wrong with that? Look, I truly believe you
talked about me being in Austria. Look, I'm trying to
have a bit of fun as well. Like I'm not
here to rain on anybody's parade or the summer or party,
et cetera. I think we all need to enjoy our
lives because it is limited. We all need to enjoy
the day, et cetera. So none of what I'm saying

(35:22):
is trying to say to people. You know, you hang
your head, you know, wear the hair shirt as they say,
and you know, live like you're in a monastery. That's
not what I'm suggesting. But I'm saying prudence dictates that
you need to balance that fun and enjoyment and living
for the moment with also planning and preparing for what

(35:43):
may be down the road. And you know, each individual
is going to make decisions on that balance that suits them.
I'm just suggesting that pretending like this is going to
go away, or that it's not going to happen, or
that everything will work out, and not putting plans or
preparations or you know, foundations in place for it, it

(36:06):
may be a mistake.

Speaker 2 (36:08):
Sam, this is excellent. I really appreciate it. If people
want to follow you if they want to read your writing,
is there the best place to follow you?

Speaker 3 (36:17):
So I'm active on LinkedIn, relatively active on LinkedIn, so
they can find me there. I think I'm the only
Sam Civaragen there. And for my writings including downloads and
this case foundation and updates on my forthcoming book, they
can go to my website which is www dot Samciverrogen
all one word dot com.

Speaker 2 (36:40):
We're going to take a break for some messages and
come back with Sam Sibaragen in just two minutes. I
can ask him about you know, where Canada is versus
the United States and our institutions, and you know, can
we withstand whatever whatever threats and change. He is fearful
about our coming stay with us. Everyone back in just
two minutes.

Speaker 1 (37:02):
No Radio, No Problem stream is live on Sagay nine
six am dot c A.

Speaker 2 (37:18):
Welcome back everyone to the Brian Crumby Radio or Sam
suberag And of Behavioral Economics is my guest tonight. We're
talking about about the economy. We're talking about debt, We're
talking about deficit. We're talking about tariffs, we're talking about taxes,
we're talking about agility. We're talking about what was it control.
Can you remember now, what would they see? S control
A line and established control, ALIGNE span and established sounds fantastic.

(37:44):
We got to remember that. I'm not sure what the
current numbers are, Sam, but the numbers I looked at
just a couple of months ago was that the US
debt to GDP or sorry, deficit to GDP was something
over five percent and Canada was less than three percent.
Uh so we weren't half of but we're almost, you know,

(38:07):
less than half of the deficit to GDP that the
United States is in. And you know, it would appear
that we've been reasonably reasonable in controlling our spending. But
the United States has gone, you know, Bizerko, with this uh,
this big beautiful bill and and and the and the
expenses that they're going to be incurring, as you correctly

(38:29):
pointed out at the top of the show. So should
we feel good about that? Is Canada and Canadian institutions
in a far better, you know, situation, far better place
to withstand the uncertainty and the risks that you're that
you're fearful about and you're warning us about.

Speaker 3 (38:43):
That's a great question, Brian, and I think the answer
is both encouraging and slightly sobering. So Canada's institutions, our courts,
our public health regulatory systems are still relatively trusted. So
surveys consistently show higher institutional trust in Canada versus the
same in the US. And that's a genuine asset we

(39:06):
shouldn't underestimate. But here's where it gets concerning our debt trajectory,
our aging population. Our population is older than the US
and our housing affordability crisis suggests that we may be
facing similar pressures, maybe just a few years behind. And
the numbers are actually worse than I think most people realize.
So let me give you an example. Ontario's debt is

(39:30):
already over four hundred billion dollars in Canadian Now, that's
larger than most provinces, all provinces and US states. In fact,
we are the largest sub national borrower in the world. Now,
compare that to California, whose public dead is seventy five
billion US in New York which is about sixty five

(39:53):
billion US. And remember that they have roughly doubled our population.
So California has four twenty million people and New York
is almost New York State has almost twenty million people.
So the reality is that interest payments are already crowding
out essential investments. And we know in Ontario that we
need them. Whether it's transit, whether it's hospitals, whether it's

(40:15):
you know, other infrastructure, we need it. So I think
the big challenge for Canadians is that complacency is our
biggest risk. I don't think that being less bad than
the US is a strategy. It's a warning.

Speaker 2 (40:30):
You know.

Speaker 3 (40:31):
It's like saying your house foundation has fewer cracks than
your neighbors, but you're ignoring that both houses are shifting.
I think the real question is what can we control?
And I think what we can control is our fiscal discipline,
our planning horizon, our institutional strengthening. We need to bridge
the gap between where we are today and the advantages

(40:54):
that we still have and where we're headed. And I
think we desperately need better metrics and simply saying that
we're not as bad as somebody else.

Speaker 2 (41:06):
You know, you described what happened in the nineteen nineties,
and that was a really a unique environment. Jean Careccia
was Prime minister. Paul Martin was a Minister of Finance.
Probably in history, one of the best partnerships of a
prime minister and a finance minister that we've had in
Canadian history. And they had the benefit of the threat
of what the markets were doing from a bond standpoint

(41:28):
and stock market standpoint, and the press in regards to
you know, the Canadian PAESO crisis, and they did institute
massive changes some that frankly, today people comment negatively about
introduction of healthcare spending, affordable housing, social housing, et cetera,
et cetera. But they did put in fiscal discipline and

(41:49):
changed this from a big deficit to having a surplus.
What do we need in leadership today? What kind of
leaders do we need? What kind of traits do we
need in leaders today? Both from a government standpoint as
well as from a business standpoint and frankly even personal
to get us through the uncertainty that you're worried about.

Speaker 3 (42:08):
It's a great question, and maybe before I answered, I'll
add to the point I don't disagree that kret Chan
and Paul Martin were a great combination, but they also
followed Brian mulroney and Michael Wilson who were from the
other political party. But I think from a Canadian perspective.
Having that combination of conservatives and liberals actually was probably

(42:31):
one of the most I think prosperous times in our history,
even though when we had to make some tough choices.
So I don't think this comes down to party politics.
It comes down to doing what's right. And so to
get to your question, I think this is where everything
comes together. We need leaders who don't just manage risk,
that they really understand complexity and interconnection. And I think

(42:53):
that applies at every level, from CEOs to elected officials
to everyday citizens. The leaders who succeed in high stakes
environments move beyond headlines and the next election cycle to
long term strategy. They invest in people, rebuild trust, and
they embrace reform when it's still a choice rather than

(43:13):
a necessity. This is what I call the uncertainty advantage.
We need to learn to thrive even the world is
constantly changing, and I think that requires leaders who can
navigate complexity without losing their star. And frankly, it's about
everyday citizens demanding better from their leaders too. We don't

(43:34):
simply have to follow. We can influence the topics and
direction that our political or company leaders want to pursue
and I think whether you're a CEO dealing with supply
chain disruption, a municipal leader facing infrastructure challenges, or a
parent trying to secure your family's future, I think these
are the principles that give you a structure for better decisions.

(43:56):
And maybe I can give you an example. So I've
done some climbing in the past, and so the most
dangerous climbers aren't usually the inexperienced ones because they tend
to know their limits. It's the experienced ones who stop
respecting the mountain. And so I think to that analogy,

(44:16):
I think applies so good leaders in uncertain times maintain
that respect for complexity. The things won't necessarily unfold exactly
as we would like it too or want it to,
but we're going to build systems that can handle it
and adapt. And I think the last one I would
make is that you know, look, we're in a world
that is going to be increasingly uncertain, and leading or

(44:38):
making decisions in this environment doesn't mean having all the answers.
It simply means creating space for the better ones to emerge.
And I think that's how we shape the future instead
of just surviving it.

Speaker 2 (44:51):
Yeah, that's a really fascinating analogy about the mountain climber.
I've worked, as you probably have as well, doubtedly for
lots of different leaders, and some leaders, as they become
more and more successful, become more and more confident in
how brilliant they are, and whether it's ego or whether
it's that they have been successful, they tend to believe

(45:14):
their own sort of press clippings more than frankly they should.
And other leaders really continue to canvass other people for
their opinions, really want to hear what other people have
got to say. Really, you know, spend the time question
I had. I worked for Jim Pattison at one point
in time, a brilliant guy, you know, nine billion billionaire,

(45:37):
so he was, he was a billionaire, but he was
nine times over a billionaire, and that was when I
worked for him. That was a long time ago. And
whenever he would make a decision or we would make
a decision, he would say, you know, let's come back tomorrow,
let's sleep on it, think about it, and we're going
to come back tomorrow and debate it again to see
if we come to the same decision. He would never
sit at the head of the table. He would sit
at a round table or you know, in the middle
of the table, and he would always he would always

(46:00):
other people to speak first, because he really wanted to
hear what other people had to say before he had
all the votes and all the money on all the
shares and would ultimately make the decision, but he really
wanted the benefit of hearing from other people. And I
love your analogy about that. The sometimes the expert mountain
climber becomes too egotistical, too confident to realize and respect

(46:26):
them out and thank you. I appreciate that. Sam. This
has been a fantastic conversation. I really appreciate it. I
appreciate your writing. Thank you, please come back again.

Speaker 3 (46:34):
I'd like that. Thank you for having me talking about
something that I think is important and I'm passionate about,
so I appreciate the opportunity.

Speaker 2 (46:42):
We're going to take a final break, and when we
come back, I'm going to give just a few of
my thoughts on this topic and what Canada needs to do. Now,
stay with us, everyone back in two.

Speaker 1 (46:49):
Minutes stream us live at SAGA nine to six am
dot CA.

Speaker 2 (47:09):
Welcome back everyone to the Brian Crumby Radio Hour. We've
been chatting about the risk of increased deficits and debt
in the United States. I think we've got that problem
in Canada as well, and maybe for a good reason.
That we are going to be dramatically increasing our spending
on defense. And we need to do this for a
couple of reasons, you know. Number one, because we've committed
to do so because of the natal commitment to spend

(47:30):
two percent of GDP on defense, which we probably should
have done numerous years ago, but we certainly need to
do today, particularly as that two percent commitment is increasing
to three percent and potentially a five percent if you
add in defense infrastructure spending. So this massive increase in
spending in regards to military defense is something that we're

(47:53):
going to have to figure out how we fund it.
And I don't think we should be funding it through
increase deficits and debt. I think we got to figure
out a different way. I also think that, you know,
if there ever was a time to do this, now
is the time we've committed to do it. There's a
war in the in in Eastern Europe. There's a war
in the Middle East. People are worried about a war
in in uh In, in South Asia. You know, there

(48:17):
was an article this past week about, you know, we
may be in a third World war and we just
don't know it yet. I hope that, to God that's
not true. But I'd rather spend the money and get
ready before uh we have that risk than uh than
when it's too late and so and I guess at
the same time, I think that there's this opportunity to

(48:37):
spend this money in ways that really helped Canadian industry,
in Canadian manufacturing, Canadian innovation. You know, the United States
has done a great job of using their defense spending
to really, you know, invest in technology, invest in US manufacturing,
invest in in becoming leaders in uh, in in industrial development,
so much so that people called it the military and

(48:59):
industrial complex, which might be taking it too far. But
I think there is an opportunity to spend this money smartly,
but we're going to spending it. I think complicating this
issue right now is that with this big, beautiful build
United States, the United States has increased it's decreased its
tax rates fairly dramatically, both from a personal standpoint as
well as from a corporate standpoint. And while I disagree
with some of the things they've done, we cannot be

(49:21):
so dramatically different in Canada. And so my bet is
that provincial and federal governments need to change or at
least look at changing their tax rates so that we
don't have a huge brain drink to the United States
given this tax rate difference, which is going to lead
to more deficit end debt. So what do we do.
Should we be decreasing dramatically our funding of social services?

(49:44):
I don't think we can, and I don't think we should.
You know, we've all heard about and know about challenges
in regards to healthcare, you know, lots of other areas.
Do I think that there's opportunities for efficiency and cost cutting,
No question, there always is. But we're not going to
find the kind of money of one to two percent

(50:05):
of GDP that we've got to find to spend on defense.
I think the only answer, the only answer, is to
increase the GST. I don't know if Harper was the
was smart and reducing it the way he did back
in the two thousands. In two thousand and eight from
fifteen to thirteen percent, that two point to reduction. I
have complained about and commented about how I thought that

(50:26):
one percent reduction in two thousand and eight, right before
the Great Recession, may have led to a far deeper
decline in the Canadian economy at the time. So I
do think that when the economy is doing well, which
it is to a certain extent, can today is the
time to think about increasing the tax rate. And I
think it is a choice. We want a fund, we

(50:48):
need to fund. We've committed to fund this dramatic increase
in defense spending. We should all pay for it. We
shouldn't make the next generation pay for it by increasing
deficit and increasing debt and having our kids and our
grandchildren not paid for it. It's the wrong thing to do,
and I think that shows the kind of leadership internationally
that we need to show. I also think that, and

(51:10):
I've tormented about this, and I'm going to have a
whole program on it tomorrow. We are in a potential
housing tobacco, a structural issue that needs a rescue plan.
I think it's leading to a potential one and a
half percent decline in GDP because of a housing crash
that some people have described as an ice age, and

(51:32):
and and losses of employment layoffs, et cetera. That we
drastically need a plan. I think that includes reduction, if
not elimination, development fees, a state imposed zoning comparable what
Texas is doing right now, that makes it easier to
UH to get approvals, and and and simplifies the whole

(51:54):
zoning approval process. I think we need a rescue plan
in housing. I think the we need a tariff adjustment
plan because I don't believe we are going to get
the US and Donald Trump to agree to the free
trade agreement that we would like to see to the
non tariff agreement that we'd like to see, which is

(52:16):
going to be a dramatic adjustment for Canada, and no
company in the world I think would feel good about
having eighty percent of their products sold to one customer.
A bank would indicate it as the biggest risk that
the company had. Canada has been leading that kind of

(52:38):
a strategy for the last ever since the free trade
agreement was negotiated. For sure, we cannot continue. We need
to diversify our trade away from the United States, and
we need an adjustment process to do that, and that's
going to be something that the government is going to
have to help companies with. So we got to go
through some adjustments. Massive increase in defense spend, probably an

(53:01):
increase in taxes the GST because of that, a housing
crisis that we need to address, and a tariff crisis
that we're all well aware of that we just can't
fight because that fight's not going to win in the end.

Speaker 1 (53:14):
We got to adapt.

Speaker 2 (53:17):
That's a couple of thoughts for me. Brian Crombie, Brian
Cromby Radio ur, thanks for joining me. All my radio
shows go up on social media as soon as the
radio show goes to air. You can catch me at
Briancromby dot com, on my YouTube channel and on all
the different podcast servers. Thanks to Finish, everybody

Speaker 1 (53:36):
Stream us live at SAGA nine am dot CA.